Dear Mr. Premack: I am in my second marriage. My husband had two
children and I had two children from our previous marriages. We
maintain several separate accounts with funds we had before we got
married. My husband’s intent was to leave one of his accounts to his
son, but the account itself just listed my husband as owner without
further instructions. He intended for that account to go to his son,
and I’d like to see that it does, since my husband died last month.
His Will leaves all assets to me, but I don’t want to probate his Will
if I can avoid the time and expense. The bank won’t release the
account to me, and won’t release it to his son. The bank suggested a
“small estate affidavit”. What is it? Will it work to get this account
to his son? Thank you. – J.N.
When someone dies, that person’s
unfinished business must be handled. Bank accounts and other financial
investments must be distributed to the proper heirs. The institutions
that hold those deposits desire very strongly to pay the parties who
are legally entitled to receive the funds. If funds are paid to
someone, and shortly later someone else arrives with a “better” legal
claim, the institution has an expensive legal problem. Thus, they only
pay when the identity of the legally entitled party is very clear.
When a person dies, there are four ways the bank can legally
establish to whom they should pay the funds. First, the bank may have
a contract with the parties that tells them who to pay. This contract
is usually part of the “signature card”. If the agreement specifies a
pay-on-death beneficiary, or has a right of survivorship, the bank can
safely and legally distribute the funds to the identified individuals.
Your husband did not utilize this approach.
Second, if there
is no such contract, the bank looks to the decedent’s Last Will and
Testament. If the Will is admitted to probate, there will either be a
court-appointed Executor to whom the bank can safely and legally
distribute the funds, or a court order identifying the specific
individuals to whom the funds must be delivered. Your husband did have
a Will leaving all assets to you. As such, the Executor could probate
it, claim the assets, and gift the balance of that account to his son
(taking into consideration any gift taxes that may be due).
Third, if there is no such contract and there is no Will and the
estate is smaller than $50,000, then bank may be able to rely on a
“Small Estate Affidavit.” Note: if there is a Will, the law does not
allow you to use a Small Estate Affidavit. This solution is
unavailable to you, and is also undesirable, and the bank should not
have mentioned it to you. But so that you understand that conclusion,
here is how a Small Estate Affidavit works:
1) Your attorney
creates court pleadings in the form of an Affidavit which complies
with state law.
2) All the heirs join together to sign the
Affidavit. Remember, this can be used only if there is no Will, so the
state’s laws of descent and distribution determine the identity of the
heirs. In a second marriage situation dealing with separate property,
the surviving spouse and the decedent’s children are all legal heirs
(not just the child he intended to receive the funds).
Affidavit is signed by two people who knew the decedent but who are
4) The Affidavit is filed with the county clerk and is
presented to the probate Judge. If it receives the Judge’s approval,
the heirs buy certified copies of the Affidavit and approving Order
from the clerk, which identifies the heirs and authorizes banks and
other persons who hold estate assets to deliver those assets to those
Finally, if there is no Will and the estate is larger
than $50,000 (so that a Small Estate Affidavit cannot be used) the
estate may have to go through a Determination of Heirship proceeding
and a Dependent Administration.
Overall, the first two
approaches (a contract or a Will) are the best. The contract or Will
allow his instructions to be followed. The third and fourth approaches
(Small Estate Affidavit or Administration) are not legally available
to you since your husband had a Will, and are undesirable since state
law then decides who receives the funds.