MSU Extension: How to Avoid Probate of Estates Valued at $100,000 or Less

When a person dies, the answers to the following questions will help a financial entity decide who is entitled to the funds in the account:

• Was the account jointly owned by the decedent with others, and if so, what are their names?

• Did the joint account say right of survivorship or without right of survivorship on the form?

• Did the joint account have a payable on death (POD) beneficiary designation or transfer on death (TOD) beneficiary registration?

• If the decedent was the sole owner, did they make a payable on death (POD) beneficiary designation or transfer on death (TOD) beneficiary registration?

• If the decedent was the sole owner and did not add a POD beneficiary designation or TOD registration, a signed account agreement with that financial institution may contain a default paragraph about who may collect on the account (e.g., spouse, if living, but if not, to the surviving children, etc.). That means the account is payable to the individuals listed in the account agreement.

Those individuals will want to take advantage of a Montana law that provides a simplified procedure without probate or appointing a personal representative. “If the decedent’s entire probate estate, minus liens and encumbrances, is $100,000 or less, all the heirs need to submit to financial entities is a form called Affidavit for Collection of Personal Property of the Decedent,” says Kaleena Miller, Madison-Jefferson County Extension Agent.

“Once completed and shown to each financial entity, the deceased funds can be released to a successor who presents proof of identification, the decedent’s certified death certificate, and the form, Affidavit for Collection of Personal Property of the Decedent,” said Marsha Goetting, MSU Extension Family Economics Specialist.

The Affidavit for Collection of Personal Property of the Decedent must be signed by the person claiming to be the successor and the signature must be notarized by a notary public, says Miller. After the affidavit, the successor’s proof of identification, and the deceased’s certified death certificate are presented, the financial institution can disburse the funds to the affiant (successor).

Some financial institutions may ask the successor to sign an indemnity agreement.

This agreement releases the financial institution from any liability about releasing funds to the affiant. “If more than one person signs the affidavit, a financial institution will typically make the check payable to all the successors jointly, so all would have to endorse the check for it to be cashed,” says Miller.

Financial institutions paying, delivering, transferring, or issuing personal property under the affidavit are discharged and released of liability to the same extent as if they had dealt with the personal representative of the decedent. A transfer agent of any security (such as stocks and bonds) is needed to change the registered ownership on the books of a corporation from the name of the decedent to the name(s) of the successor(s) upon presentation of the affidavit.

Readers who want a copy of the Affidavit for Collection of Personal Property of the Decedent form and MontGuide should contact the Madison-Jefferson County Extension office at 287-3282 or go to this website to order a free copy: http://www.montana.edu/estateplanning/affidavitforcollectionofpersonalpropertyforpdffillableform.pdf.