Probate Versus The Heirship Affidavit
When a loved one passes on, their final arrangements need to be taken care of, their debts paid and their remaining assets distributed. Assets can be life insurance proceeds, real estate, bank accounts, retirement accounts, stocks, bonds, collectibles, and personal property.
This process of allocation and disbursement is handled through a person’s estate – the total net worth of a person.
The procedure to settle an estate is determined by whether or not a person had a legal will (died testate, or had no will (died intestate).
An executor, also called a personal representative, is someone named in the will, or appointed by the court, who is given legal responsibility to take care of the remaining financial obligations of the deceased loved one. If the estate has many types of property, significant tax liability or potential inheritor disputes, an executor may want to seek legal assistance. BIG RESPONSIBILITY: taking care of property, handling bills and taxes and making sure assets are transferred to their new rightful owners.
So, when do you use probate versus the heirship affidavit?
Reason for Use
Sometimes it becomes necessary for courts to oversee the distribution of assets upon a loved one’s death. That’s where probate comes in. Probate is a court supervised process to finalize personal and financial affairs after a loved one’s death. However, the process subjects an estate to public scrutiny and additional costs of probate.
Having a will does not prevent the probate process. If there are significant assets to be distributed or creditors to be paid outside of what is legally stated in the will, and, in some cases, if there is no will at all, probate is necessary. Consult an attorney.
Five reasons why probate court may be necessary either to make a claim on the deceased’s assets or to prove that a person is a legal beneficiary –
1. If the will is deemed invalid.
2. If the deceased didn’t have a Last Will and Testament.
3. If the assets were owned solely by the deceased.
4. If the assets were owned as a Tenant in Common or Joint Tenancy.
5. If there are no designated beneficiaries or if all the beneficiaries have predeceased the decedent.
Some assets do not go through probate, no matter what the will or trust directs – retirement assets, life insurance and savings bonds, as well as jointly owned assets like bank accounts, brokerage accounts and real estate titled as tenancy in the entirety with joint rights of survivorship (A tenancy by the entirety can be created only by married persons). The named beneficiary on these accounts supersedes any directive of the will.
(handled outside court)
Reason for Use
In the case of someone dying intestate, or without a will, the affidavit can be used in its place provided there is no complexity to the estate with property being transferred without encumbrance to the identified heir(s). The purpose of the affidavit in an intestacy case (no will) is to describe family history and circumstances and identify the likely heirs.
Also, the Affidavit can be used when there is a Will. The heirs must agree to the disbursement of the deceased’s property. The document can also be used to gain ownership of funds in bank accounts and other personal property.
Less formal. Less expensive.
An affidavit of heirship is a simple, legal method of transferring ownership in real estate from the deceased to a living heir when there are no encumbrances, all heirs agree about what to do, and continue to cooperate.
To be effective, the affidavit must be signed by a notary public and two disinterested witnesses who know the deceased or the family but do not stand to gain financially. However, it cannot take effect if there are debts secured by the real estate.
Witnesses for an affidavit of heirship must specifically know the following:
– The decedent.
– The decedent’s date of death.
– Names of the family members and heirs.
– Whether there are outstanding debts at the time of death.
– They will not benefit financially from the estate themselves.
The affidavit itself is filed by the heir(s) and recorded in the deed record in the county where the real estate exists and becomes part of the chain of title.
State law may require a waiting period after the death before the affidavit can be used. For example, it may be possible to use this affidavit one year after the decedent’s death and if no will has been probated. (A probated will instantly disqualifies the use of an heirship affidavit.) As soon as the affidavit has been recorded, the heir(s) may sell the property if desired.
Disclamer: This article summarizes various internet sources on this topic and is not intended to be used as legal counsel. Please consult an attorney for specific information.
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