What are Small Estate Affidavits and When Are They Used?

It is possible to avoid probate entirely in small estates by the use of affidavits to collect the property and assets of the deceased person (the “decedent”). This explains how to use small estate affidavits to avoid probate.

Hypothetical Case

Let us use a hypothetical case to explore the process. Our hypothetical case involves a decedent who was married shortly before his untimely death. The decedent owned a modest home, a car, a few shares of stock in his employer’s company, and a bank account.

Because our decedent was recently married, he had not yet updated his estate plan to allow his estate to pass outside of probate to his wife by survivorship in joint tenancy and community property, or by beneficiary designations on his accounts. All of his property was titled solely in his name at the time of his death. He did not leave a will. (The decedent in this hypothetical case is not unlike many people who put off estate planning until it is too late.)

Affidavit to Collect Wages

Fortunately, probate may still be avoided in this case. Wages or salary due the decedent may be collected by his wife by furnishing to his employer an affidavit that meets a few simple requirements. The affidavit must state that the affiant (the person making the affidavit) is the surviving spouse of the decedent, or is authorized to act on behalf of the spouse, and that no application for the appointment of a personal representative is pending or has been granted (if one was granted, the personal representative must have been discharged, or more than one year must have passed since the filing of a closing statement).

This affidavit may be used any time after the death of the decedent. There is no waiting period. However, payment is limited to $5,000 by the use of this affidavit (not a problem in our hypothetical case).

Affidavit to Collect Personal Property

A separate affidavit must be used to collect the decedent’s personal property, such as the money in his bank account, his company stock, and his car. The requirements for this affidavit are different from those for the affidavit to collect wages discussed in the preceding section, but no more difficult. The decedent’s spouse must wait 30 days after the decedent’s death to use this affidavit.

The affidavit must contain the following statements:

1. 30 days have elapsed since the death of the decedent
2. either:
   •  an application for the appointment of a personal representative is not pending and a personal representative has not been appointed, and the value of all personal property in the decedent’s estate does not exceed $75,000 (as valued as of the date of death),
   • the personal representative has been discharged or more than one year has passed since the filing of a closing statement, and the value of all property in the decedent’s estate does not exceed $75,000 (as valued as of the date of the affidavit)
3. the person presenting the affidavit (or on whose behalf the affidavit is presented) is entitled to the property.

Note that all of the decedent’s property, wherever located, must be included in the valuation determination, less liens and encumbrances. When the personal property affidavit is presented by the decedent’s wife to the bank, the bank will close the decedent’s account and issue a cashier’s check to the widow.

Similarly, when the affidavit is presented to the company’s stock transfer agent, together with the stock certificate, the stock will be reissued in the widow’s name. (It may be more convenient to have a stockbroker handle the stock transfer for a small fee.)

The motor vehicle division will transfer title of the decedent’s vehicle to the widow upon presentation of the affidavit and on payment of the necessary fees.

Because the value of the decedent’s personal property in our hypothetical case does not exceed $75,000, the decedent’s spouse is able to collect all of it by affidavit.

Affidavit to Collect Real Estate

The sole remaining asset in our hypothetical case is the decedent’s house. The assessment for the year in which the decedent died showed the full cash value of the property to be $400,000. The decedent owed $325,000 to the mortgage company at the time of his death.

The decedent’s spouse can again use an affidavit to acquire title to the property, but she must wait six months to do so. Once the six-month waiting period is over, the decedent’s spouse may file in the superior court in the county in which the decedent was domiciled at the time of his death, an affidavit describing the real property and the interest of the decedent in the property. The affidavit must contain specific statements required by the statute, and must have certain documents attached to it. Any false statement in the affidavit may subject the person to penalties for perjury. The real property affidavit does have certain limitations:

1. the value of all real property located in Arizona, less all liens and encumbrances, cannot exceed $100,000
2. the affidavit cannot be used if an application for the appointment of a personal representative is pending or if one has been appointed
3. the affidavit cannot be filed sooner than six months after the decedent’s death
4. the decedent’s funeral expenses and unsecured debts must have been be paid
5. no other person may have an interest in the property
6. no federal estate tax can be due on the decedent’s estate.

The requirements for the affidavit are set forth more specif­ically in A.R.S. Section 14-3971(E), the text of which can be downloaded from the Arizona State Legislature’s website, www.azleg.gov.

On receipt of the properly completed affidavit (and any necessary attachments), the probate registrar will issue a certified copy of the affidavit to the filer. The certified copy must then be recorded in the office of the recorder in the county where the real property is located.

As the above hypothetical case illustrates, affidavits can be used in Arizona to collect wages and salaries up to $5,000, to collect personal property up to $75,000, and to transfer title to real property having a net value of not more than $100,000. When affidavits are used in lieu of probate, the cost savings can be considerable.