In 2019, the Oregon legislature modified the rules for administering “small estates” of persons who die on or after January 1, 2020.
By way of introduction, an estate is a “small estate” if the total value of the assets that need to be administered does not exceed the following values: $200,000 for real property and $75,000 for personal property.
Small estates can be administered through a formal probate proceeding, just like larger estates. But if the estate is a small estate, instead of filing for formal probate, certain people—such as the Decedent’s spouse, child or other heir or a creditor of the Decedent—can instead file a Small Estate Affidavit (“Affidavit”).
Although the small estate process is less formal than probate, there are important rules that the person filing the Affidavit (known as the “Affiant”) must follow in order to avoid personal liability and other problems.
An Affidavit may be filed only if the estate meets the small estate limits described above and if no petition for probate has been filed. If a probate is later filed, or if the Affiant later discovers additional assets that take the estate over the limits, the Affiant must turn over any estate property to the Personal Representative appointed by the probate court.
Some people, (such as convicted felons and persons who could not qualify for appointment as a Personal Representative), cannot file an Affidavit.
The 2019 legislation revised the list of what must be included in the Affidavit, which means that printed forms that may be found on-line or in bookstores may not be current.
The Affidavit must contain a notice telling persons who owe debts to the Decedent or hold the Decedent’s property to pay the debt or turn over the property to the Affiant. If such a person fails to pay the debt or turn over the property, the Affiant, after making a 30-day demand, may go to court to compel payment or delivery, and may be able to recover attorney fees.
The Affidavit must also contain additional information if the Decedent was incarcerated within the 15 years prior to the Decedent’s death.
The Affidavit must list all unpaid, undisputed claims against the estate, and provide a mailing address for presentation of claims. The Affiant may elect to receive claims via email or fax.
The Affidavit must also list estimates of administrative expenses and attorney fees that the Affiant anticipates incurring.
The new law includes rules guiding the sale or other transfer of estate property during the administration of the estate.
The new law makes the Affiant a “fiduciary,” under a duty to administer, preserve, settle, and distribute the estate as expeditiously and with as little sacrifice to value as reasonably possible. The Affiant is chargeable for estate assets in the Affiant’s possession, and for neglect, failure to pay taxes, embezzlement, commingling of assets, unauthorized self-dealing, and other willful or negligent acts.
Conclusion: The small estate process, if properly followed, can be a good alternative to probate, but the new law raises the bar for Affiants in terms of complexity and potential liability. Persons who seek to serve as Affiants are well advised to seek qualified legal counsel to assist them in this increasingly complex process.