We have been told that in order to avoid any risk against unknown creditors, the legal notice to creditors, is published. However, if we do this then the probate for the estate is no longer eligible for small estate probate. Is that correct?
Estate Planning Attorney
Both of the attorneys are correct, you won't cause any problems by doing the additional publication, however the law that allows you to do this and get relief from unknown creditors this way is part of the full probate process statutes. So while you do this, and it might be helpful, it won't result in a court order that a full probate would have which states that creditors that didn't respond to the notice in a timely fashion are barred (with some exceptions but they have to fight to prove that you didn't try hard enough to find them and just the cost of doing this can hold them at bay).
Keep in mind that nearly all claims die out anyone due to the statute of limitations. All you are accomplishing by doing a full probate is taking steps to cut of creditors sooner.
I do recommend that clients who have a fear of creditor issues or issues with other family members don't try to save money and do a small estate affidavit but rather do the full probate even though it will cost more - it will cost less in the long run to put these problems to rest and know that you won't face costly litigation in the future, when often you have spent all the money you inherited so you can't use it to cover your costs.
But the best thing to do is sit down with an attorney and discuss this, weighing the benefits and risks based on the specific facts of your situation, the reason for your concerns, the amount of property involved and the value, and the dynamics of the family members and heirs. You are looking at the cost of maybe one hour, two max, to do this. This is so much cheaper then dealing with a problem later I can't recommend it enough and may even be cheaper if it helps you decide not to spend money on the publication process you are thinking of doing.
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It would appear that this is not the case. A copy of the Affidavit form and the statutes can be found, here: http://courts.oregon.gov/Washington/docs/probate/SmallEstatepriortojan106.pdf
Having read all of the above, it does not appear that the additional publication would create any additional obligations for you. By statute, you need to send a copy of the Affidavit to all known creditors and you hold the funds subject to their claims for a period of four months.
If you have questions or concerns, you can always run these by a probate attorney. There should be no charge or a very nominal charge for this information. If you have the attorney handle the paperwork, it might be a little more expensive. But you would then be certain that everything is handled properly.
*** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state.
Family Law Attorney
The important thing is to provide the notices required under the Oregon small estate statutes. So long as you meet those requirements, you can provide as much additional notice as you like. However, you want to make sure that your notices do not contain conflicting information. If you sent out a notice, creditors and other folks are entitled to rely on it. The initiatiation of a "full" probate has certain distinct requirements, like the filing of a petition requesting that kind of probate for the estate. You should meet with an attorney experienced in Oregon probate law to make sure what you are doing accomplishes what you need to do.