My relative recently passed away, do I need to go through probate?
Fortunately, California has a simplified probate procedure when the value of the decedent's personal property estate does not exceed, subject to certain exceptions, $100,000. This process is commonly referred to as "small estate affidavit" or "small estate declaration." Collection via small estate affidavit allows a person to receive an inheritance by presenting an affidavit or declaration to the holder of the decedent's personal property, a bank for example. It is one of the three methods for collecting small estates without a formal probate proceeding. The other two pertain to obtaining real property and are infrequently used.
AUTHOR'S UPDATE: The valuation threshold has changed. The bill discussed in this subsequent post became law in 2012.
Small estate affidavit may be used be either the beneficiaries named in a will or a trust, or the decedent's intestate heirs if the decedent had no will. Prob C § 13100; Prob C §§ 6401 - 6402. For example, if you were named in your late relative's will as a beneficiary and their estate was quite modest, then you could take advantage of the small estate affidavit process.
In order to qualify, (1) the gross fair market value of the decedent's personal and real property assets in California must be less than $100,000, subject to exclusions found in Prob C § 13050, and (2) 40 days have elapsed since the decedent's passing. Prob C § 13100.
The exclusions found in Prob C § 13050 include real property held in joint tenancy, multiple party bank accounts, payable on death bank accounts, assets held in a revocable trust, life insurance contracts, etc. Thus, if the decedent owned a home in joint tenancy, took out a substantial life insurance policy which named a beneficiary or left their favorite cousin as the pay on death beneficiary of their bank account, none of these assets would count towards the $100,000 limitation.
The 40 day waiting period provides the beneficiaries the opportunity to collect the decedent's bills: television, Internet, phone, credit card, utilities, etc., since the billing cycle is often 30 days. This is particularly important because the beneficiary of the decedent's estate is liable for the decedent's outstanding debts, but only up to the value of the transferred property. Prob C §§ 13109, 13112. For instance, if Danny Decedent left Bobby Beneficiary with a $50,000 inheritance and $90,000 in credit card debt, Bobby would not be liable for the unpaid balance of $40,000.
The required contents of the affidavit are found in Prob C §§ 13110-13116.
Below is an explanation of the the small estate affidavit process:
(1) The beneficiary needs to provide evidence that the decedent actually owned the property the beneficiary is inheriting. Prob C § 13102(a).
For example, if the decedent had a Wells Fargo savings account, the beneficiary could provide the bank with a recent bank statement of the decedent.
(2) The beneficiary needs to provide a certified copy of the decedent's death certificate. Prob C § 13101(d).
The fee for a certified death certificate is nominal. For example, in Santa Clara County, the fee is $12.
(3) The beneficiary needs to provide proof of identity. Prob C § 13104.
This can most easily be accomplished if the beneficiary has the declaration notarized by a notary public.
(4) If the decedent owned real property in California, an inventory and appraisal by a referee of that real property. Prob C § 13103.
For example, the decedent owned open space in Willits, that was not valued over $100,000.
(5) If the decedent's probate is pending and the decedent's personal representative has consented to payment, transfer or delivery of the property to the declarant or affiant, a copy of the consent and of the personal representative's letters, attached to the affidavit or declaration Prob C § 13101(e).
Unlike attorney fees for a formal probate proceeding, attorney fees for summary procedures are not set by statute but rather by private agreement between the client and attorney.
If you have any questions please call my office (408) 866-8382 for a complimentary consultation or email me, s.miri@mirilaw.com.
How long do banks have to process such an affidavit?
ReplyDeleteThere is no time limit.
DeleteI am the child and sole survivor of a deceased parent who left no will. I am reasonably sure this is a small estate but my mother had substantial debt and a IRS lien. Will I have to sell what little furniture she had to pay some amount of this debt?
ReplyDeleteYou first need to figure out all the facts, i.e. how much your mom's estate was worth and the exact amount of her debts, before any competent attorney could give you specific advice.
DeleteI should mention that you are under no obligation to act. You are free to refuse to act. Conversely, if you assume possession of her assets, you have to pay all her debts. You cannot get all the benefits of inheritance without the burdens.
My father died in Contra Costa County and he had no real property. All he had was his personal belongings and a car. He lived in public housing as a disabled veteran. After paying for the funeral and selling his car, his estate will be worth less than $4000. He had a will where his ex-wife is named executor (old will). His children are equal beneficiaries. However, he had about $15K in debt. Do we have to try and sell his cat puked on couch and twenty year old camping gear to pay off creditors? Do we fill out an affidavit of small estate to have it on file (since there are no assets to claim as we have the car title)? Is it okay for the executor just to notify the creditors and see if they respond? Or would it be better to put it through probate to deal with the creditors? He also had a 1099C Cancellation of Debt from two HELOC's he had for about $75K. If we pay off the other creditors, can the banks who cancelled his debt come back at the estate? It's a bit of pain since he lived in CA and the executor lives out of state, as do most of his children.
ReplyDeleteNobody is required to administer his estate. Involuntary servitude is obviously barred in this country. Still, if you wish to administer his estate, please contact my office.
DeleteMy dad passed in February 2013. He had a revocable trust with me named as successor. He has 2 properties that he put into the trust. My question is he had an IRA (under 15,000) that he did not add to the trust. I believe he thought he had changed the beneficary from his ex-wife to me but did not. What claim does the estate have to this? Would I use the small estate claim form for this purpose? Thanks!
ReplyDeleteYou have a tricky situation given his divorce and the possible application of ERISA. I would need to know more facts before I could render an opinion.
DeletePlease contact my office if you would like to retain my services.
My father passed away in January 2013 and left no "real" will. He left a piece of paper back in 2005 that says everything that he owns goes to me. I am trying to get the money out of his bank account (Its Direct Express - he was receiving Social Security benefits and he had some money in the account before his death), but they are telling me to get a notarized small estate affidavit. I have printed off the forms and will get it notarized by a notary person (my friends mother does it)... do I need to do anything with the courts for it to be "legal"? He told me that I need to get signatues by the court but Im wondering if those signatures were for the notary? Also, by completing this form, will I also be accepting any debt that he had before his death?
ReplyDeleteAny help is appreciated!
Thanks!
A small estate affidavit typically takes a few hours of an attorney's time to handle from start to finish and you are best served to retain one for this matter. These matters do not cost thousands of dollars in attorney fees.
DeleteOf note, if you inherit your father's estate, you inherit his debts as well.
Please call my office if you would like to retain my services.