When an Estate is Unnecessary

February 17, 2015 § Leave a comment

The children and widow shuffle into your office. The father and husband has passed on, and they want you to open his estate.

The only assets are a bank account in his sole name with a balance of $6,000, and stock certificates with a value of around $10,000. They’d like you to get the estate opened up so that they can divvy things up and get on with their lives.

Is an estate necessary to get them the money in the bank account and to transfer the stock?

Don’t forget that this property is most likely exempt so that an estate would not be necessary. You can read a prior post about that subject here. But even so, how can you get the funds into the hands of the family without probate?

MCA 81-5-63 provides that any “banking institution” in Mississippi may pay to the “successor” of the decedent any sum to the credit of the decedent up to $12,500, without any court order and free of any liability. The term “successor” includes: (1) the surviving spouse; or, (2) if no surviving spouse, the adult with whom the minor children are residing; or (3) if there is no surviving spouse or no minor children, then either parent of the decedent; or (4) if none of the above, then any adult sibling of the decedent.

MCA 91-7-322 allows any person indebted to a decedent, or having personal property of the decedent, or having negotiable instruments, including stock certificates, of the decedent, to deliver, transfer, or issue the item to the decedent’s successor (as defined above). There are several conditions attached to this code section. They must be incorporated into an affidavit presented to the holder that provides as follows:

  1. The value of the decedent’s entire estate, excluding liens and encumbrances, can not exceed $50,000; and
  2. At least 30 days have elapsed since the death of the decedent; and
  3. No application for appointment of an executor or administrator is pending, nor has one been appointed by a court; and
  4. The facts of the relationship to the decedent that establish the status of “successor.”

You should read these statutes carefully before advising your clients. The language above is merely a summary. Both statutes give the successor(s) power of disposition over the funds or assets.

These are tools you can use to avoid getting entangled in one of those estates that you can’t ever seem to wind up, and to which you devote many thankless and uncompensated hours. Only last week I commiserated with an attorney about one of those cases, and we agreed that it would be advantageous if lawyers had a crystal ball to divine the future of estates before taking them on. Alas, there is no such prophetical device. One has to rely on one’s own judgment without benefit of foresight.

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