Avoiding Probate: Small Estates Member Legal Services Copyright (c) 1997, CALIFORNIA ASSOCIATION OF REALTORS(R) (C.A.R.) Member Legal Services. All rights reserved. Permission is granted to reprint this material for non-commercial purposes provided this notice appears in all such copies. Q 1. What is probate? A "Probate" is the court-supervised administration of a decedent's estate. The procedure begins with the filing of a petition with a probate court for the probate of a decedent's will or for letters of administration if there is no will. The probate proceeding involves "proving the will" (if there is a will), appointing the personal representative, determining the decedent's assets which are subject to probate, determining and paying the decedent's debts and taxes, and transferring title to the beneficiaries (if there is a will) or to the heirs at law (if there is no will). For more detailed information about probate, please see our Legal Q&A entitled, "Probate." Q 2. What property is subject to probate? A The probate proceeding, generally, is required only for property to which the decedent directly held title at his/her death, and not property which is indirectly held, property owned by contract, or which passes by operation of law to another at the decedent's death. The following property is not subject to probate administration:
Q 3. When is probate administration not necessary? A First, if the decedent leaves everything in the will to the surviving spouse or the surviving spouse is the heir under intestate succession (when there is no will), the property may be transferred without a probate proceeding and qualifies for the spousal set-aside proceeding. Second, in addition to the spousal set-aside proceeding, there is a set aside to a surviving spouse or minor children of estates not exceeding $20,000. This property may be set aside to the surviving spouse even if he or she has remarried, and whether or not the surviving spouse or minor children have the right to inherit the decedent's estate. Third, under limited circumstances where probate would ordinarily be necessary, it is possible to avoid probate administration for an unmarried decedent's estate if the estate is a "small estate." The remainder of this Legal Q&A will deal with these small estates which are not subject to probate administration. Q 4. What is the procedure other than probate for transferring California personal property of a "small estate"? A When the gross fair market value of the decedent's California estate (at the time of the decedent's death), including both real and personal property, does not exceed $100,000 (Probate Code Section 13100), the successor of the decedent may collect the decedent's tangible personal property, money, debts owed the decedent, and other intangible personal property by furnishing an affidavit or declaration to the person holding the decedent's personal property. If the personal property consists of a note secured by a lien on real property and the instrument creating the lien has been recorded in the office of the county recorder of the county where the real property is located, the affidavit or declaration must be recorded in the same county. A certified copy of the decedent's death certificate must be attached to the affidavit or declaration. In addition, if the decedent's personal representative has consented to this transfer of personal property, a copy of this consent and of the personal representative's letters of administration must be attached to the affidavit or declaration. This procedure may be used only for personal property in the estate and cannot be used until at least 40 days after the date of the decedent's death. The DMV requires a special form be used for the transfer of vehicles or vessels. See the attachment entitled, "Affidavit For Transfer Without Probate California Titled Vehicle or Vessels Only." This form is needed only if title to the vehicle or vessel is not held in joint tenancy (and, therefore, would otherwise be subject to probate). Q 5. What property is not counted in determining the gross fair market value of the decedent's estate for the purposes of determining whether it is a "small estate"? A All items not subject to probate mentioned in QUESTION 2 and all property passing to a surviving spouse or child pursuant to any set-aside proceeding as mentioned in Question 3, are not counted in determining the gross fair market value of the decedent's estate for the purposes of determining whether it is a "small estate." Any vehicle registered with the DMV, off-highway vehicle, vessel (e.g., boat, ship), manufactured home, mobilehome, commercial coach, truck camper, or floating home is also excluded in determining the value of the estate. Any money due the decedent for service in the armed forces of the United States is excluded. Up to $5,000 of compensation for personal services from any employment is also excluded. Only the decedent's half interest in community and quasi-community property is included in determining the gross fair market value of the decedent's estate. Q 6. What is the procedure other than probate for transferring California real property of a "small estate"? A TRANSFERRING CALIFORNIA REAL PROPERTY When the gross fair market value of the decedent's California estate (at the time of the decedent's death), including both real and personal property, does not exceed $100,000 and 40 days have elapsed since the death of the decedent, the successor of the decedent may use a simple petition procedure rather than probate to transfer the decedent's interest in real property to the successor. See Question 9 for a description of the petition procedure. The petition procedure may also be used for the transfer of the decedent's personal as well as real property. TRANSFERRING CALIFORNIA REAL PROPERTY WORTH $10,000 OR LESS If the gross fair market value of the decedent's California real property is $20,000 (Probate Code Section 13200) or less on the date of death, the successor to the property may use an affidavit procedure rather than the petition procedure to transfer title. Even if there is a probate proceeding being conducted on the estate, the successor may use the affidavit procedure to transfer real property of small value ($20,000 or less) provided the personal representative consents. Q 7. What is the "affidavit procedure"? A The affidavit procedure for transferring real property worth $20,000 or less consists of filing a form prescribed by law in the superior court of the county where the real property is located. The affidavit cannot be filed until at least six months after the decedent's death. An affidavit form can be purchased at your local superior court. An inventory and appraisal of the decedent's California real property must be attached to the affidavit. The appraisal must be made by a probate referee. See Questions 11 and 12. If there is a will, it must also be attached to the affidavit. Furthermore, a certified copy of the decedent's death certificate must be attached to the affidavit. If there is a probate proceeding pending, the decedent's personal representative must consent in writing to this procedure. This written consent must be attached to the affidavit. Finally, the affiant must mail a copy of the affidavit and all the attached documents to any person serving as guardian or conservator of the estate of the decedent at the time of the decedent's death. Q 8. How is the affidavit filed with the superior court? A The affidavit, all the attached documents, and a $35 filing fee is presented to the court clerk of the superior court. The court clerk files the affidavit and issues a certified copy of the affidavit. This certified copy must be recorded in the office of the county recorder of the county where the real property is located. Q 9. What is the "petition procedure"? A The petition procedure is a method of transferring California real property (or both real and personal property) not exceeding $100,000. See Question 6. The procedure involves several steps:
A form prescribed by the law must See attachment number DE-310 for a sample form to be used to petition the court for the transfer of real property for small estates of $100,000 or less. Attachment number DE-315 is a sample court order for use by the court in ordering the transfer of the property to the petitioners. This court order should be prepared by the petitioners to be used by the court. The petition for the transfer of real property in California must be accompanied by an inventory and an appraisal conducted by a probate referee. See Questions 11 and 12. If the decedent left a will, a copy of the will also must be attached to the petition. Q 10. When may the petition procedure be used? A The petition procedure may be used for "small estates" described in Question 6 only if there is no probate proceeding being conducted in California or, if there is a probate proceeding, the decedent's personal representative consents in writing to the use of the petition procedure to transfer the real property to the petitioners. This consent must be attached to the petition. Q 11. How do I hire a probate referee? A Contact a clerk at the local probate court for a list of probate referees. See the attachment entitled, "Directory of Leading Probate Departments" for addresses and phone numbers. Q 12. What does a probate referee get paid? A A probate referee gets paid 1/10 of one percent of the total value of the property in the probate estate, but not less than $75 and not more than $10,000 (unless there is court approval). Q 13. What is the disadvantage of avoiding probate administration? A When an estate goes through probate administration special notification must be given to creditors of the estate of the decedent. When the probate administration is completed and the estate is closed, creditors can no longer pursue any remedies against the beneficiaries or heirs. Without probate administration, the beneficiaries or heirs may still be subject to the decedent's debts. For example, a person to whom payment, delivery, or transfer of the decedent's personal property is made by affidavit or declaration may be personally liable for the unsecured debts of the decedent (but only to the extent of the value of the personal property.) Similarly, a person who receives real property pursuant to the petition procedure is personally liable for the unsecured debts of the decedent. The personal liability, however, cannot exceed the fair market value at the date of the decedent's death (less the amount of any liens and encumbrances on the property). In addition, a person who receives real property valued at $10,000 or less pursuant to the affidavit process is also personally liable for the unsecured debts of the decedent (but only to the extent of the value of the personal property less any liens). Q 14. Where can I obtain additional information? A The full text of this and other Legal Briefs, Q&As, and memoranda are available without charge to REALTORS(R) on CARNET and are distributed automatically to LEaDeR (Legal Edge for Designated REALTORS(R) subscribers. A copy may also be obtained through the Member Legal Hotline. Readers who require specific advice should review the facts with an attorney. C.A.R. members with questions may contact the Member Legal Hotline at (213) 739-8282, Monday through Friday, 10:00 A.M. to 6:00 P.M., or write a letter to: Due to the unique nature of CompuServe, the following Appendices are not available via on-line services. If you are interested in obtaining them, please refer to QUESTION 14, or call your local Association/Board of REALTORS(R). 1. PETITION TO DETERMINE SUCCESSION TO REAL PROPERTY (DE 310) 2. ORDER DETERMINING SUCCESSION TO REAL PROPERTY (DE 315) 3. AFFIDAVIT RE REAL PROPERTY OF SMALL VALUE 4. DMV AFFIDAVIT FOR TRANSFER WITHOUT PROBATE CALIFORNIA TITLED VEHICLE OR VESSELS ONLY 5. DIRECTORY OF SELECTED COUNTY PROBATE DEPARTMENTS
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