Why Your Small Estate Should Have an Estate Plan

Having an estate plan protects your assets from someone terrible at managing money. Shutterstock

Estates come in all sizes, and you might think that your estate is too small for this classification, but you might be surprised. The definition of a small estate varies with each state. All states exempt some types of property from being included in an estate, which may enable you to avoid the probate issues of a more significant estate.

Small estates have advantages when being settled that larger estates do not have. Sometimes, your estate does not need to go through probate at all. Some states do not count the value of real estate, real estate you own in another state, cars, assets in a trust, or jointly owned property. The holdings in estates that are considered small get distributed faster than those that must go through probate court.

Small Estate Affidavits

Some states will let you avoid probate by signing small estate affidavits. Nolo says that these are sworn documents that enable an estate to be considered small and escape the probate process. Along with a death certificate, they allow you to claim the property in the estate.

Benefits of an Estate Plan

An estate plan offers several advantages over not having one. When you die intestate—that is, without a will—the court decides what happens to your children and your assets. Most likely, there will be some decisions made that you and your beneficiaries will not approve of if you were still alive.