When is probate not necessary and how does a California small estate affidavit help?
The answer depends primarily on the value of the estate.
Generally, everyone should ask the question; “when is probate not necessary?” when they are considering their estate planning.
Estate is worth less than $150,000
If the decedent’s estate is worth less than $150,000, probate is not necessary.
In some instances, probate might be good idea if there are issues with creditors’ disputes or disagreement between beneficiaries’ regarding the property division.
Formal transfers of a deceased persons property to their heirs and devises in California may require probate administration supervised by a California superior court.
Estate is worth more than $150,000
Probate is not necessary in the following circumstances (independent of the value of the estate).
- Property held in a trust revocable by the decedent;
- Assets held in joint tenancy and multiple-party accounts;
- A surviving spouse’s or registered domestic partner’s interest in property held by a decedent and his or her surviving spouse or registered domestic partner as community property;
- Life insurance or retirement plan assets that are to be paid to designated beneficiaries
- Registered vehicle worth less than $15,00
- Car, truck or boat
- Manufactured or mobile home
- Commercial coach truck, camper, or floating home;
- Any amounts owed to the decedent for services in the U.S. armed forces
- Any compensation under $15,000 in value (including compensation for unused vacation time).
How are assets transferred without probate?
If probate is not necessary, it does not mean that assets are automatically transfer of to the successor.
It is necessary to follow specific procedures to have title transferred to the beneficiary and to collect the asset.
Completion of the transfer may involve a court proceeding and estate taxes or creditors’ claims will have to be paid.
Is there an alternative to probate?
California small estate affidavit is an instrument that is used as a substitution of probate.
Authority for Transfer by California Small estate affidavit
When the gross fair market value of a decedent’s personal and real property assets in California, excluding property described in Probate Code 13050, does not exceed $150,000, the decedent’s successors may collect the decedent’s tangible personal property, money, debts owed the decedent, and other intangible personal property by the affidavit or declaration procedure described in Probate Code 13100 -13116 This procedure may be used to collect property, such as life insurance and retirement plan benefits, that becomes part of the decedent’s estate on the decedent’s death. Probate Code 13005.
The California Small estate affidavit must be executed under penalty of perjury. Although notarization is not required, it is a good idea to use a notary acknowledgment because often the document will be submitted to a legal department outside California.
Important tip: You should ask the holder of the property whether the property holder has a pre-printed form for California Small estate affidavit or declaration. Often, banks and brokerage firms prefer (or require) use of their own form, which has already been reviewed and approved by their legal department. Use of the institution’s form can speed up the collection time considerably.
It is usually more efficient and cost-effective to prepare a California Small estate affidavit for each asset, although individual affidavits or declarations are not required. Doing so eliminates complication and entanglement arising from questions from property holders about the other assets and proof of the fair market value of each asset.
You must attach a certified copy of the decedent’s death certificate to the California Small estate affidavit. In the rare case when there is no death certificate, a petition to establish the fact of death must be brought, and the California Small estate affidavit must be modified to reflect this fact.
Authority and Use of Small estate affidavit Procedure for real property
If the gross value of all of a decedent’s California real property, excluding property described in Probate Code 13050, does not exceed $50,000 on the date of the decedent’s death, the successor to that property can use an affidavit procedure to transfer it. The Small estate affidavit procedure is relatively simple and requires minimal processing time.
The Small estate affidavit cannot be filed, however, until at least 6 months have passed since the date of the decedent’s death and all illness expenses, funeral expenses, and unsecured debts of the decedent have been paid. Estate administration does not bar the availability of this procedure. If an estate proceeding is pending or has been conducted, the Small estate affidavit procedure can be used if the personal representative consents.