Affidavit or Probate

Should I Sign an Affidavit?

A common question I receive in my probate practice is whether inherited property can be transferred with an affidavit. I often get this question from potential clients who have either been approached by a family member about signing one, or who scoured the Internet for advice on “how to avoid probate“. In Texas, we have two types of affidavits authorized by law, the “Affidavit of Heirship” and the “Small Estate Affidavit”. Before explaining these affidavits, it’s important to first understand what is an Affidavit.

What is an Affidavit?

An Affidavit is a recital of statements and facts about a person, place, and events. An “Affiant” is a person who signs an Affidavit. When an Affiant signs an Affidavit, they are swearing to all the facts and statements in the Affidavit. This sworn signature is generally done in the presence of a notary after the notary has administered the Affiant an “oath”, for example: “do you swear under penalty of perjury that the statements you are making and the documents you are signing are true and within your personal knowledge?”

Should I Swear to an Affidavit If I’m Not Sure?

The oath the notary administers, and before an Affiant signs, asks whether the individual has personal knowledge of the facts stated or knows it to be true. That means first-hand knowledge, i.e. information known by direct means and not by second-hand reports from someone else. For example, if the Affidavit states that a person was married three times, but the potential Affiant only knew about one marriage, then they lack personal knowledge of all facts stated and should not sign the Affidavit.

Can I Transfer Property With an Affidavit?

The short answer is “No”. An Affidavit is merely a sworn statement of facts. When discussing Affidavits in the context of inheritance and probate avoidance in Texas, we are referring to the “Affidavit of Heirship” and the “Small Estate Affidavit”. But these Affidavits are no more than a sworn statement of facts concerning a deceased person’s property and family tree. The Affidavit does not actually transfer property, but is a document that a third party may rely on to transfer or convey property to the heirs listed in the Affidavit.

Therefore, whether a third party will rely on the Affidavit determines its usefulness. For example, many title companies are willing to rely on an Affidavit of Heirship to transfer title in a home sales transaction. Likewise, the Texas DMV recognizes Affidavits of Heirship as a means for transferring title to a vehicle. However, banks and other financial institutions are very reluctant to accept an affidavit as a basis for transferring account balances. Generally, banks prefer court orders that specifically direct who can receive the money in the account.

In Texas, a Small Estate Affidavit is filed with the court, and if the Small Estate Affidavit meets certain legal requirements, a judge will sign a court order on the Small Estate Affidavit. Some banks, recognizing the legal authority in the court’s signed order, may accept this form of Affidavit to transfer account balances to the heirs named in the affidavit. But most financial institutions are uncomfortable with this and generally prefer dealing with an authorized estate representative, instead. This is a person who has “Letters Testamentary” or “Letters of Administration“; documents that can only be obtained through formal probate proceedings.

Consequences of Transferring Property Without Probate

Not all decisional “consequences” are bad. If a third party is willing to accept an affidavit, then great! It’s simple and cost-effective. But, caveat emptor (buyer, beware!). Once property is transferred without probate, estate creditors may sue the heirs directly. Additionally, omitted heirs could sue for their share. Therefore, when a person dies with debt, or complex family situations, a formal Probate is a better solution for shielding heirs from creditor claims and delivering finality from family dynamics.

Adriane S. Grace is an attorney in Frisco, Texas. If you have questions about the probate process or an inheritance Affidavit you have been asked to sign in the Frisco, Prosper, Allen, McKinney, Richardson, Dallas, Carrollton, The Colony, or Denton area, please complete the contact form to request a meeting.

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