Though different in form, like many of our western neighbor states Oregon offers a simpler, more streamlined alternative process for settling the more modest estates of some decedents. Oregon’s “small estate affidavit” allows for the transfer of property of a decedent to the heirs if intestate (where there is no will) or devisees if testate (where there is a will), when the property subject to probate totals no more than $275,000 in value, $200,000 of which can be Oregon real property, and $75,000 of which can be Oregon personal property (including cash and bank accounts).
Each year, the vast majority of small estate affidavits filed in Oregon courts are submitted by self-represented parties. This is understandable, given that the fewer assets an estate has to transfer, the less interested a party will be to pay an attorney to provide the necessary services. However, stories abound of both intentional abuse of and honest confusion by unrepresented parties regarding the small estate process. To address these concerns, the Oregon legislature enacted HB3007, making the following key changes to Oregon’s small estate process, as well as many others, all of which are effective this coming January 1, 2020.
- Because the small estate process is only available to estates that fall below a value ceiling (two ceilings actually, one for real property and another for personal property) and it is common for some estates to go unaddressed for long periods of time following death, the question of a valuation date is important. On what date are the assets valued to determine whether the estate qualifies as a small estate? HB3007 clarifies this issue by requiring a valuation either on the date of death or, if it has been more than one year since the death, a date within 45 days before the date the small estate affidavit is filed with the court. Also clarified is that it is the gross value, and not the value net of any liens or other debts, that is to be used.
- Convicted felons and persons who would be disqualified from acting as a personal representative in a full probate by ORS 113.095 now may not file a small estate affidavit. This includes incapacitated persons, minors, suspended and disbarred attorneys, and, with some exceptions, funeral service practitioners.
- The “affiant” (the person who files the small estate affidavit) now has an affirmative duty to file an amended small estate affidavit to correct material errors or to include property omitted from a previous affidavit.
- The law contains several changes to the information that the small estate affidavit is required to contain, including (among others):
- The mailing address to which creditors of the estate may present claims to the affiant;
- Anticipated administrative expenses and attorney fees;
- A new “Notice of Obligation to Pay Debt or Turn Over Property” to alert parties receiving the small estate affidavit that they must respond to an affiant’s request to deliver decedent’s property and explaining that an affiant can use the courts to force the delivery of such property and including a possible award of attorney fees. This seems largely in response to countless stories of banks and other institutions flatly refusing to turn over property except to a personal representative appointed in a full probate.
- When the original will has already been filed in another state, a certified copy may now be filed with the small estate affidavit. This is the lone exception to the now explicit rule that a copy of a will cannot be filed in a small estate proceeding.
- There are a number of changes to the language in ORS 114.525, describing the process the affiant uses to gain control of and transfer property, in hopes of making it more understandable.
- When denying claims of creditors against the estate, the affiant must now affirmatively state a reason for the disallowance. Stating a reason will not be considered an admission nor will it restrict the affiant from raising other legitimate reasons against or defenses to the claim later.
- A new section was added to clarify the processes available to creditors who wish to challenge disallowed claims.
- The rules for selling and transferring estate property during the administration of a small estate were revised for much needed clarity.
To see all of the changes coming as a result of HB3007’s passage, view the enrolled text of the bill on the Oregon legislature’s website by following the link below. And, if you happen to be someone that purchases legal forms, make sure that you stop using any old small estate affidavit forms at the new year.
https://olis.leg.state.or.us/liz/2019R1/Downloads/MeasureDocument/HB3007/Enrolled
For informational purposes only and not to be relied upon as legal advice or for the formation of an attorney-client relationship.
- Brook D. Wood