Explaining Small Estates in Probate

Small House in handsAn estate is classified as ‘small’ if the total valuation of all the assets is less than an amount prescribed by law. If the estate does not have much property in it, you may be able to use a small estate process where the probate court is minimally involved.

For individuals whose assets consist of a car, personal property, or wages from a job, formal probate or court estate administration hearings may not be practical if there are very few assets to be distributed.

Small estates usually qualify for a simplified proceeding for distribution upon your death. These streamlined proceedings typically require much less paperwork, take less time, and cost less than a full probate proceeding. Instead, the small estate will be distributed according to a small estate affidavit prepared beforehand by you or your estate planning attorney.

In Vermont, in order to determine if your estate’s value is below the small estates’ limit of $10,000, you should first make a list of your assets. Include only the things that pass to heirs and beneficiaries by will or, if there’s no will, by Vermont intestacy laws.

The use of a Small Estate Affidavit for Vermont is limited to situations where the deceased dies owning assets in their own name without a designated beneficiary. To qualify in Vermont, the small estate in question must be valued at or below $10,000.

Assets that are not counted towards the small estate limit, because they do not require probate and pass to named beneficiaries regardless of what your will or state intestacy laws delineate, are:

  • Assets held in joint tenancy
  • Retirement plans with named beneficiaries
  • Payable-on-death (POD) bank accounts with named beneficiaries
  • Real estate transferred by a life estate deed which transfers on death to named beneficiaries
  • Transfer-on-death (TOD) bank or brokerage accounts to named beneficiaries
  • In trust for (ITF) bank accounts
  • A life insurance policy with named beneficiaries

The function of the Vermont Small Estate Affidavit is:

  • To inform the court that the estate in question meets the requirements of a small estate; and
  • That the simplified summary probate administration should be utilized.

The Small Estate Administration process in Vermont starts when the petition is filed at the appropriate local court in Vermont where the death occurred. In Vermont, this is the Probate Court Unit of the County Superior court.

The petition to open a small estate in Vermont includes:

  • Your name and address as petitioner.
  • Whether or not the decedent has a will and enclosing the original will if there is one.
  • A list of all the assets in the small estate, with specific information on all of them, including all (abridged) account numbers. The assets may include bank accounts, insurance policies, investment accounts, cars, and boats.
  • A list of everyone holding property due to the estate, with the particular property stated, as well as the name and address of the individual.
  • A list of everyone entitled to receive property from the estate, stating their name, age, address and relationship to the decedent.
  • A copy of the funeral bill.
  • Certified copy of the death certificate.

After the Vermont Small Estate Affidavit has been filed, the normal court process for Small Estate Administration can take place, with the person filing the petition receiving the court’s permission to administer the estate. After all prior claims are satisfied, the estate’s assets can then be distributed, either in accordance with the will, or with the laws of intestacy, if there is no will. The probate court needs to issue a Decree of Distribution to the beneficiaries under the will, or under the laws of intestate succession.

Small estates administration is generally accomplished through a streamlined process that does not require a formal court hearing. In many instances, such summary estate administration hearings do not require a lawyer. If a dispute arises over the administration of a small estate, and a lawsuit becomes necessary, an estate planning attorney can best represent your interests.

To begin your estate planning process, please contact us at Aaron J. Goldberg, PLC.

 

 

“Used with permission 2016”

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Attorneys with Aaron J. Goldberg, PLC are members of the Vermont Bar Association and the National Academy of Elder Law Attorneys.