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Handling a Small Estate for a Loved One

In Pennsylvania, if a person dies with assets in their individual name (regardless of whether or not they had a Will), those assets are subject to probate. However, in some cases, the amount is minimal. Pennsylvania offers two simplified options for these small estates based on the total of the assets. One option is for solely owned assets totaling less then $10,000 and the other is for solely owned assets totaling between $10,000-$50,000. If the total is over $50,000, probate is then required. Solely owned assets totaling less than $10,000 If the Decedent's assets total less than $10,000, Pennsylvania law allows a Small Estate Affidavit be prepared (often by an attorney) and provided to the financial institution/entity by the next-of-kin, along with a death certificate and funeral bill. The Affidavit includes the Decedent's information, bank account information, reason for using the Small Estate Affidavit, confirmation that the funeral bill has been paid, name(s) of the next of kin. The next-of-kin is then responsible for distributing the funds in accordance with the law (i.e. paying any inheritance tax or distributing the funds to the other next-of-kin). Solely owned assets totaling between $10,000-$50,000 If the Decedent's assets total more than $10,000, but less than $50,000, Pennsylvania law allows a Petition for Small Estate. The Petition generally includes the same information as the Small Estate Affidavit. The most significant difference is that this process requires a formal petition and a Decree must be issued by the Court before the bank can rely on it. It is still more expeditious and cost-effective than the traditional probate process. Determining if the small estate affidavit or petition is appropriate In order to determine if either of these options is appropriate, the most critical information to confirm is:

  • Title on the Decedent's assets shows Decedent's name only

  • Beneficiaries are not listed on the Decedent's assets

  • Total value falls within the one of the permissible thresholds

Seek counsel before you probate If the bank tells you that you need to probate, seek counsel first. As you can see, there may be ways to avoid unnecessary probate. While probate isn't something to avoid at all costs, we do want to choose the most efficient and cost-effective process. Avoidable mistakes during estate planning Estate planning isn't simply preparing documents. When I meet with clients to prepare their estate planning documents, I review their financial information and we confirm how accounts are set up. If they are not properly set up or are inconsistent with their estate planning wishes, I provide direction to my clients on how to modify their accounts to "clean up" their assets, name appropriate account owners or beneficiaries, and/or streamline their estate planning. It is then their responsibility to actually make the necessary changes. In fact, this blog was inspired by a common scenario that I see in my office - a grieving widow whose late spouse had one account in his (or her) individual name. Typically, they have estate planning documents, all other assets are either jointly-held or list the surviving spouse as the beneficiary, and then there is one account that is in the Decedent's name only with no beneficiary. The widow goes to close out the account and the bank tells her she needs to probate. She's frustrated and confused. Here's the most frustrating part for me - this was probably avoidable through good estate planning. If you do need to probate, we're here for you. Probate isn't as scary or intimidating as it seems. There is a lot of bad information out there and horror stories from friends and family members that have struggled through the process. We are here to be a resource and guide you step-by-step.


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