Many states don't count certain property when they set out small estates limits. There are three common kinds of property that is excluded in this way. The amounts each states' laws set for each kind of excluded property differs, but the concept is similar.
A "homestead" is the name for legal protections that states offer to a certain amount of equity in a person's primary residence. This differs from state to state, but the basic idea is that a person's homestead property is protected for their spouse and children and, in some states, safe from creditors.
Exempt property refers to property that is set aside to be safe from creditors.
A Family Allowance, like it sounds, is property (cash and belongings) that are set aside to be available to a surviving spouse and minor children so that they have resources to live on before the probate is completed.