Depending upon the size and composition of the estate and the marital status of the decedent, different methods exist in California for the summary passing of title to estate property to the decedent's successors or surviving spouse and children without administration.
In addition to methods of transferring property without probate that apply only to a surviving spouse, registered domestic partner, minor child, or other dependent (see below) there are three distinct procedures, often referred to as "transfers under California small estate statutes," for collecting a decedent's assets without a formal probate proceeding as follows:
- Collection of personal property in small estates by affidavit or declaration under Prob C §§13100–13116. See explanation below under "PERSONAL PROPERTY."
- Succession to real property within California by one of the following two methods (see detailed explanation below) depending on the gross value of all California real property in the estate. See explanation below under "REAL PROPERTY.
- If the real property's gross fair market value does not exceed $50,000 (regardless of the total value of the estate), one can use the affidavit procedure of Prob C §§13200–13210 (Prob C §13200(a)(5));
- If the gross fair market value of the real property is more than $50,000 and the gross value of the total estate, real and personal, does not exceed $150,000, less excluded property, a summary court proceeding (Prob C §§13150–13158 (Prob C §13151)) can be used to determine the succession to real property and additional personal property.
A very common non-probate transfer is the use of affidavits to transfer personal property if the gross value of the decedent's real and personal property in California does not exceed one hundred fifty thousand dollars ($150,000) and if 40 days have elapsed since the death of the decedent, the successor of the decedent may, without procuring letters of administration or awaiting probate of the will. This is a cumulative $150,000 of qualifying assets even if at different financial institutions. The valuation date is not the date of death but rather the date of the affidavit signing. This only works for personal property and does not work for real estate. Also, a Prob C §13100 declaration can often be used to get the items out of a safe deposit box.
There is no appraisal required. Also, no bond is required. There is no publication. The Court does not issue Letters. In fact, Prob C §13100 generally has absolutely no Court involvement whatsoever and is not filed in Court, unless someone commits fraud or in some other rare situations. It is simply a signed affidavit, under the penalty of perjury, declaring a number of items required by the probate code. Some financial institutions have their own small estate forms which they may ask you to use. The affidavit form for Riverside County can be found at http://www.riverside.courts.ca.gov/localfrms/ri-pr012.pdf. The affidavit form for San Bernardino County can be found at http://www.sb-court.org/Portals/0/Documents/PDF/Forms/SB-13100.pdf.
A key point with using Prob C §13100 small estate affidavits is that not all assets count toward the $150,000. Prob C §13050 specifically excludes items from the calculation, including:
- Joint tenancy;
- Multiple-party accounts;
- Assets passing to a surviving spouse or domestic partner;
- Life estate assets;
- Property in trust;
- POD and TOD Accounts;
- Vehicles, boats, mobile homes/RVs;
- Moneys from service in Armed Forces; and
- Up to $5,000 in salary/compensation from employment.
There are a number of potential disadvantages in using the summary procedure.
- Possible Disagreement Among Decedent's Successors in Interest. If the decedent died intestate and the assets are separate property, the successors could be a spouse or registered domestic partner and children from another marriage or relationship. All of the successors to the assets being transferred would be required to sign the affidavit. Serious problems could arise if these parties do not get along and cannot agree on who is entitled to what portion of the property and whether the property is community or separate property.
- Decedent's Liabilities. You must know the extent of the decedent's liabilities, e.g., whether there is credit card debt or last illness expenses far in excess of the assets to be collected. A further consideration is that if all the assets collected are used to pay the decedent's debts, the successor in interest may be paying more than the proportional share attributable to the asset than would have been assessed in a probate. In sum, when there are issues concerning substantial or unknown liabilities, use of probate administration may be more appropriate. If the decedent has significant debt issues, you should weigh the "benefit" of giving formal notice in a probate administration, and the time bar built into a Notice to Creditors, versus using the informal, summary procedure. .
- Refusal to Accept. In addition, some property holders initially refuse to accept a Prob C §13100 affidavit or declaration. Sometimes transfer agents of small non-publicly traded securities, as well as small independent banks or brokerage houses, need to be persuaded to act in accordance with the law.
There are two separate summary administration procedures that a decedent's successor in interest (as defined in Prob C §13006) may use to transfer a decedent's interest in California real property, depending on the value of the property:
- Prob C §13150 Petition Procedure. A petition under Prob C §§13150–13158 is the most commonly used procedure for transferring a decedent's interest in real property or real and personal property in California with a gross value not exceeding $150,000 as of the date of death. If the basis for petitioner's claim is the decedent's will, a copy of the will must be attached to the petition. Prob C §13152(c). A completed Inventory and Appraisal (Judicial Council Forms DE-160, DE-161) must be attached to the petition, verifying the value of the property. Prob C §13152(a)(2), (b). The petitioner may select any currently appointed probate referee located in the county where the property is situated. Prob C §13152(b).
The petition requesting a court order may be filed on the 41st day after decedent's death (Prob C §13151) rather than after 6 months when using the Prob C §13200 affidavit procedure (Prob C §13200(a)) (see paragraph 2. below). If California probate proceedings for administration of the decedent's estate are pending or have been conducted, the petition cannot be filed without the personal representative's written consent. Prob C §13152(a)(5), (d). See Prob C §13150.
The person who receives the property under the court order is personally liable for the unsecured debts of the decedent.
- Affidavit Under Prob C §§13200–13210 For Transfer of Real Property. An affidavit procedure is available under Prob C §§13200–13210 for transfer of real property when the gross value of all of decedent's real property in California does not exceed $50,000, regardless of the total value of the estate (Prob C §13200(a)(5). If the gross value of all of the decedent's real property located in California does not exceed $50,000, an affidavit to transfer the real property can be filed with the probate court under Prob C §§13200–13210. The value must be shown by an inventory and appraisal by a probate referee. Prob C §13200(a)(5).
There are few times when the affidavit procedure can be used, because of the extremely low value of real property ($50,000) that can be transferred in this way. When it can be used, it is generally less expensive than the petition procedure because it does not involve a court proceeding. It also requires an inventory and appraisal only of the decedent's California real property (Prob C §13200(c)), whereas the court proceeding requires an inventory and appraisal of the decedent's California real and personal property (Prob C §13152(b)).
Before the affidavit can be filed, more than 6 months must have passed since the date of death (Prob C §13200(a)(6)), and all last illness expenses, funeral expenses, and unsecured debts of the decedent must have been paid (Prob C §13200(a)(8)). If California probate proceedings for administration of the decedent's estate are pending or have been conducted, the procedure cannot be used without the personal representative's written consent. Prob C §13210. See Prob C §13200(a)(7), (e).
There are several methods of transferring property without probate that apply only to a surviving spouse, registered domestic partner, minor child, or other dependent. These methods include the following:
- "Set-Aside Petition" under Prob C §§6600-6615; Fam C §297.5(c). The Set-Aside Petition can be used if the net value of decedent's estate does not exceed $20,000 at the date of death, including all real and personal property, but excluding all non-probate property, liens, and other encumbrances (such as a mortgage on a house), that would reduce the net value of the estate. Prob C §§6600-6615; Fam C §297.5(c). The Set-Aside Petition allows for a simplified procedure, instead of a full probate, if the following requirements are met:
- Only the surviving spouse (or domestic partner) or the decedent's minor children can request that the estate be "set aside" under this procedure.
- The petition can only be filed by the executor in the will, if there is one, the surviving spouse, a guardian of a minor child, the personal representative, or a child of the decedent who has since become of legal age to do so.
- Passing property to a surviving spouse or registered domestic partner without administration under Prob C §§13500–13554 allows transfer between spouses regardless of dollar value of estate without full-blown probate. This procedure is intended to permit a surviving spouse to obtain a judicial determination of property to which that spouse is entitled and to obtain a judicial confirmation of that property to that spouse without other proceedings.
- Determining and confirming by court order property passing to a surviving spouse or registered domestic partner under Prob C §§13650–13660 is voluntary. It is helpful because although property may automatically pass to a surviving spouse without administration under Prob C §13500, some title companies and others may not clear or transfer title without a court order. Through a Prob C §13650 spousal property petition, surviving spouses request a judicial determination and confirmation of their rights to all or a portion of the property to which they are entitled upon the death of their spouse and obtain a court order verifying the same.
To learn more about California small estate procedures in Riverside County, San Bernardino County or elsewhere, please contact me, William Sweeney by calling 800-575-9610 or locally at 760-989-4820. If you prefer to reach me via email, take a moment to complete an online contact form, and I will respond promptly.