• Shawna Murray, Attorney

When Can an Heir Use California’s Summary Probate laws?

The California Probate Code has some special rules that provide for heirs to avoid probate when their loved one died with a small estate. Because the small size of the estate, even when there is no will, the law allows for the transfer of the decedent’s assets without filing a full-blown probate petition. I will describe some of the methods here:

When the Decedent's Personal Property is Worth Less Than $166,250

Probate Code 13100 allows for the transfer of the personal property of the decedent when the assets add up to a maximum of $166,250. The assets can get transferred to the heirs (and/or beneficiaries named in a will) via the preparation of an “Affidavit to Transfer Personal Property worth less than $166,250.” If all of the decedent’s personal property when added up exceeds the maximum, then a formal probate is required. Please note that real property, such as a home, is not personal property so it may have to go through probate (more on this below).

Typically, personal property is going to include bank accounts, stocks and bonds, and promissory notes held by the decedent. When determining which of the bank accounts and other personal property are applicable to this law, you can eliminate from the calculation of $166,250 any bank accounts or other financial accounts that have a “payable on death” beneficiary listed with the bank. Those account proceeds would be payable directly to the beneficiary.

You can also exclude from the $166,250 limit some other assets, such as vehicles, manufactured homes, vessels, mobile homes, community property, and joint tenancy property. You can also exclude up to $16,625 of salary and other money owed to the decedent from his/her employer.

It is important to note that if you use the affidavit route, you are personally liable for any unpaid, unsecured debts of the decedent for up to the amount of money that you receive. If you want to ensure that you will not be liable for debts on that money, then you need to open a probate case in the county where your relative resided.

If you decide to use this affidavit to transfer the personal property of the decedent, first, you will need to wait for 40 days after the death and have the death certificate. Second, you will need identification for the heirs. Third, you need to use exact wording per the probate code in your affidavit and all heirs and/or beneficiaries must sign it in front of a notary. Fourth, a copy of the will if there is one. Fifth, you may need to be ready to meet with some resistance from some bank and financial institution employees that are unfamiliar with this law. Feel free to reach out to this office if you meet with such resistance.

When Your Spouse's Estates Has a Net Value Less Than $85,900

A Small Estate Set Aside Petition can be filed by the decedent’s spouse and/or minor children if the decedent’s estate has a net value of less than $85,900. Probate Code 6602 is unique because it is looking at the net value. This is the value over and above the liens and mortgages.

The Small Estate Set Aside Petition can be filed alone or as part of a formal probate. It can be filed right away if necessary to protect from creditors. The property needs to be appraised by a probate referee prior to the hearing and the petition must include a list of the liens on the property.

This petition is filed with the court because it is asking the court to set aside the estate of the decedent for the benefit of the spouse and/or minor children. The Court must consider the needs of the surviving spouse and/or minor children versus the liens and encumbrances on the property, creditor’s claims, the decedent’s estate plan, and any other relevant issues. If the petition is granted, the person(s) taking title is going to be personally liable for the unsecured debts of the decedent.

When the Decedent’s Real Estate is Valued Under $166,250

Probate Code Section 13151 permits an informal probate to transfer the property if the decedent owned real property with a gross value under $166,250. The gross value does not take into account the liens or mortgages, so there are probably very few properties left in California that will even fit into this law. A probate referee’s appraisal will be required and should probably be ordered before you get too excited about using this short cut.

If you are able to move forward under this informal procedure, you need to file a petition with the court. A Petition to Determine Succession to Real Property can be used to get a hearing. First, you will need to wait 40 days from the date of death to file. Along with the petition, the probate referee’s appraisal (that needs to be signed off by all heirs/beneficiaries) is required.

If the judge grants your petition, you will be personally liable for all of the unsecured debts of the decedent, up to the value of the property, less liens. Again, the only way to avoid personal liability for the unsecured debts is to open a formal probate.

There are a couple more miscellaneous codes that help a small estate avoid probate. If you would like to discuss them or any of the small estate probate methods above, please reach out to Shawna Murray Law at 949-416-3575.

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