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Wills & Estates: Is a Small Estate Administration An Option For You?
By: Arnett, Draper & Hagood, LLP

If you have determined that an estate administration is required, an option exists in Tennessee to address estates of a modest size. This option can be found in Tennessee Code Annotated ("T.C.A") Section ("§") 30-4-101 et seq. and is known as The Small Estates Act. It is often desirable to consider whether a small estate administration is a viable option.

A small estate is defined in T.C.A. §30-4-102 as an estate "in which the value of the property does not exceed $25,000.00." Under the Small Estates Act, the term "property" is comprised of personal property which is held individually by the decedent on the date of death. Please note that only personal property, and not real property, is included in the definition of property under The Small Estates Act. Also, any personal property held jointly with right of survivorship is not includeable as property when determining the total value of a small estate. The restricted definition of property adopted by The Small Estates Act can significantly narrow the aggregate amount of property in an estate and thereby render the opportunity to use the small estate administration process.

A small estate administration is begun when the affiant makes application with the appropriate court. Usually, the affiant is the person nominated in the will, or, if there is no will, any competent adult heir. Next of kin or the largest creditor also frequently serve as the affiant. It should be noted that the affiant can be an individual or a legal entity. The appropriate court is one which exercises probate jurisdiction in the county in which the decedent had legal residence on the date of death.

The small estate procedure is commenced after 45 days have passed from the date of death. It is possible for the court to waive the 45 day waiting period for good cause shown. However, it is vitally important to remember that a small estate affidavit can be filed only if no application has been made for letters testamentary or letters of administration.

The affidavit, as filed with the court, must contain the information necessary and appropriate to the administration process. Although there is some flexibility on how an affidavit can be drafted, the following information must be contained in the affidavit:

  • Whether the decedent left a will or not
  • A list of unpaid debts of the decedent, along with the name and address of each debtor, as well as the amount due to the creditor
  • An itemized description of the decedent's property, which should have a schedule of all insurance payable to the estate on the decedent's life
  • Any individuals holding property must be specified by name and address
  • Each devisee, legatee or heir entitled to receive any property of the decedent must be specified by name, age, address and relationship
  • Wether notice to creditors will be given in conformity with the provisions of T.C.A. as required for a regular administration
  • That the affiant acknowledges by signature the understanding that, subject to the penalty for perjury, the affidavit is not false or misleading and that the affiant is mindful of all duties imposed upon the affiant by The Small Estates Act

If the decedent has left a will, the original of the same shall be filed with the court along with the affidavit. When the affidavit is filed, the court issues an index number as if it were a regular administration. The clerk of the court is authorized to receive fees for a small estate administration. Such fees are currently $30.00, however, they are subject to change and can be verified in T.C.A. §8-21-401.

Bond may be required by the court. However, T.C.A. provides guidance to the court as to when it is appropriate to waive the requirement of bond. If bond is to be waived, the affidavit must clearly state as much.

Once the affidavit is filed, barring any reservations by the court, the clerk will issue as many copies of the affidavit, in certified form, as is necessary to retrieve the decedent's property. Although T.C.A. clearly states that a certified copy of the affidavit is sufficient to retrieve the decedent's property, it is advisable to draft an order, suitable for a judge's signature, acknowledging the opening of the small estate. The order should attach the affidavit as an exhibit thereto and note that the affiant acts with all powers granted under The Small Estates Act. Once again, an order at this point is not required, but is often useful in the practical application of The Small Estates Act.

Once the affiant has the certified copy of the affidavit, the affiant takes the same to all persons possessing property of the decedent. Upon receipt of the affidavit, any person with property of the decedent is to transfer or deliver the property to the affiant. The Small Estates Act waives any liability of the transferor of the property, acting in good faith, under direction of the certified affidavit. The costs of a proceeding can be taxed against a person wrongfully refusing to pay, transfer or deliver the property to the affiant in conformity with the certified affidavit. The affiant is a fiduciary and is responsible for the management, distribution, and care of the property once they have taken possession of it.

After the affiant has received all of the property of the decedent, it is the affiant's responsibility to ensure that all debts of the decedent are paid in accordance with the applicable provisions of T.C.A. The affiant is also responsible for court costs, and any other costs, as prioritized by the laws of the state of Tennessee. Once the affiant has satisfied the requisite payments of the estate, distributions are to be made to those parties rightfully owed the property in accordance with either the Will or the laws of intestacy.

At the end of the administration, the affiant may obtain discharge from liability in one of two ways. The first method involves the passage of time. At the second anniversary of the filing of the affidavit, assuming no notice to creditors was given and certain petitions were not filed, the affiant is discharged. The second approach involves the court. By way of an order, the court may discharge the affiant and its sureties after the affiant files a tax receipt or tax certificate issued by the Tennessee Department of Revenue and an affidavit affirming that each debt of the decedent is paid.

The Small Estates Act is a subset of the general probate laws. It is intended to provide an optional alternative method for administering small estates. However, in numerous areas, The Small Estates Act relies on the rules of a full administration and those rules should be carefully reviewed before commencing a small estate.