Not everyone has significant assets when they die. Some of us die owning just a bank account, a no-so-expensive home, some personal effects, or a combination of these assets.
While the value of these assets may be nominal, they still have value and, likely, there are heirs that would like to have the assets.
This begs the question, how does one go about handling a small estate in Texas in a way that keeps in mind the limited budget to handle the estate.
What is a Small Estate in Texas?
Let’s start with an understanding of what counts as a small estate.
In Texas, a small estate is defined as an estate that has less than $75,000 of assets. These assets can include anything, from cash in bank accounts to cryptocurrency, to real estate and personal effects.
The $75,000 amount is measured by the fair market value on the date of death.
This amount is the threshold for filing a small estate affidavit, which is one of the options we’ll address below.
Is a Probate Necessary?
The first step in considering an estate with limited assets is trying to determine whether a probate is necessary. Probate is not always necessary in Texas.
The first out is if there are no assets that the survivors cannot access and no debts that will go unpaid. By and large, this means bank accounts or other financial accounts that the decedent owned that the survivors cannot access. It may also mean a life insurance policy that does not include a valid beneficiary designation.
With this estate, if the only asset is a vehicle, the survivors may use the motor vehicle affidavit in lieu of probate. If the only asset is real estate, the survivors may use an affidavit of heirship filed in the real property records in lieu of probate.
If there is no will and a bank or other account that cannot be accessed and it is less than $75,000 in value (when combined with all other assets) and there is no non-homestead real estate passing to anyone other than a spouse, the survivors may use the small estate affidavit.
If there are no debts and the decedent had a will and there are bank accounts one needs to access, the parties may file for a muniment of title. This is a streamlined probate.
If there are debts (other than Medicaid repayment or IRS debts), the order of no administration may provide a remedy. This can be particularly helpful if there is a surviving spouse or minor children, as they may be able to use this to cut off any would-be creditors.
With each of the options above, they may not be available if there is a probate dispute with the beneficiaries or heirs or minor beneficiaries or heirs. These are two factors that can throw a wrench in most alternatives to probate.
Let’s go through some of these options in more detail.
Small Estate Affidavit
A Small Estate Affidavit is a legal document that allows an executor or administrator to bypass the traditional probate process for small estates in Texas. It can be used if the value of the estate does not exceed a certain threshold (currently $75,000) and there are no complex legal issues to resolve. The affidavit must be signed under oath and presented to the court to transfer the decedent’s property to their heirs or beneficiaries.
Affidavit of Heirship
An Affidavit of Heirship is a legal document used to establish the identity and heirs of a deceased person when there is no will. It is typically used in cases where the value of the estate is small, and the heirs can agree on how to distribute the assets. The affidavit must be signed by two disinterested witnesses who can attest to the identity of the deceased, their marital status, and the identity of their heirs.
Motor Vehicle Affidavit
A Motor Vehicle Affidavit is a legal document used to transfer ownership of a vehicle after the owner has died. It can be used if the value of the vehicle does not exceed a certain threshold (currently $75,000) and there are no complex legal issues to resolve. The affidavit must be signed by the executor or administrator of the estate and presented to the Texas Department of Motor Vehicles along with any necessary supporting documents to transfer the vehicle’s title to the decedent’s heirs or beneficiaries.
Order of No Administration
An Order of No Administration is a court order used to transfer personal property from a deceased person’s estate to their heirs or beneficiaries without going through the formal probate process. It can be used if the value of the estate is small, and there are no debts or other legal issues to resolve. The order must be signed by a judge and presented to banks, financial institutions, or other entities holding the decedent’s assets to release them to their heirs or beneficiaries.
Probate as Muniment of Title
Probate as Muniment of Title is a legal process used in Texas to transfer assets from a deceased person’s estate to their heirs or beneficiaries without having to go through the full probate process. It can be used if the decedent had a valid will, and there are no debts or other legal issues to resolve. The process involves presenting the will to the court for filing, along with any necessary supporting documents, and obtaining an order from the court declaring the will to be a valid muniment of title. This allows the assets to be transferred to the heirs or beneficiaries without the need for an executor or administrator to be appointed.
If you find yourself in the position of having to handle a small estate in Texas with limited assets, don’t despair. There are a few options available to you, and with some careful planning, you should be able to get through the process without too much trouble. Remember to consult with an attorney if you have any questions, and always err on the side of caution when it comes to handling someone else’s money.
Hire an Experienced Houston Probate Attorney for a Small Estate
If you have a small estate in Texas with limited assets, you might be wondering if you need to hire an experienced Houston Probate attorney. The answer is maybe. If the value of your estate is less than $75,000, you may not need an attorney, but if the value of your estate is more than that, it’s a good idea to at least consult with one. There are a few things to keep in mind when deciding whether or not to hire an attorney for a small estate.
If you need help with your Texas probate matter, call us today for a FREE attorney consultation at (281) 219-9090.
Our Houston Probate Attorneys provide a full range of probate services to our clients, including helping with small estates. Affordable rates, fixed fees, and payment plans are available. We provide step-by-step instructions, guidance, checklists, and more for completing the probate process. We have years of combined experience we can use to support and guide you with probate and estate matters. Call us today for a FREE attorney consultation.
The content of this website is for informational purposes only and should not be construed as legal advice. The information presented may not apply to your situation and should not be acted upon without consulting a qualified probate attorney. We encourage you to seek the advice of a competent attorney with any legal questions you may have.