April 5, 2012
Small Estates involving Real Property
If a homeowner passes away, it is often the case that the beneficiaries will have to go through probate in order to pass title unless the property is held in joint tenancy or in trust. An exception to this general rule is where the gross value of the decedent’s real and personal property in California does not exceed $150,000. Prob C § 13151. The valuation limit used to be $100,000 but this was increased to $150,000 on January 1, 2012. Thank you California legislature.
The petition is usually filed in the county where the decedent owned real property and may be filed once 40 days have elapsed since the decedent's death. Prob C §13151. The form for this procedure is Judicial Council Form DE-310. The petition will need to include a completed Inventory and Appraisal (Judicial Council Forms DE-160, DE-161), verifying the value of the property. Prob C §13152(a)(2), (b). Once filed, the petitioner needs to serve notice on the heirs, executors and/or trustees. Prob C § 13153. If the petition is appropriately completed and notice is served on the correct parties, the probate court judge will sign the form and this form should be recorded with the county recorder's office. This order is conclusive for passing title. Prob C § 13155.
One key aspect of this procedure is that it relates to real property, as opposed to personal property. If the decedent had only personal property in their estate, e.g. a bank account and some stocks, this procedure would not be needed. Instead, the beneficiaries could utilize the small estate affidavit to collect the asset(s). Still, if the decedent had a mixture of real and personal property, the petition to determine succession to real property could be used to collect both types of property.
If the beneficiary is the decedent's spouse, the spouse should not use this procedure because there is a valuation limit of $150,000. Instead, the spouse should use the spousal property petition.
The following examples illustrate when the petition to determine succession to real property is used and not used.
Lionel Ozil's estate consisted of a bank account, stocks and bonds worth $125,000. Since his estate is worth less than $150,000, the small estate affidavit could be used to collect these assets.
Thierry Van Persie's estate consisted of a home in Campbell, CA worth $500,000, held in joint tenancy with his brother Arjen, and a bank account worth $50,000. Since the home was held in joint tenancy, the beneficiaries do not have to use the petition to determine succession to real property for the Campbell home. As for the bank account, since it is under $150,000, the small estate affidavit can be used.
Theo Chamberlain's estate consisted of a home in Campbell, CA worth $250,000, held as a tenant in common with his brother Alex and a 2,000 shares of ATT stock worth $8,000. Since the home was held as a tenant in common by Theo, probate would be required albeit formal probate would not be required because the value of the estate was less than $150,000. That is, the petition to determine succession to real property could be used to transfer Theo's interest in the property to his beneficiaries.