Small Estates in California
There are many ways to avoid probate in California,
and using the small estates law is one of them. This web page
explains that law and how to use it.
Estates of decedents that do not
exceed $150,000 do not need to be probated in California. An
affidavit or declaration signed under penalty of perjury at least 40
days after the death can be used to collect the assets for the
beneficiaries or heirs of the estate. No documents are required to
be filed with the Superior Court if the small estates law (California
Probate Code Sections 13100 to 13116) is used.
What assets are included in
the $150,000 limit? Bank accounts, brokerage accounts,
stock, bonds, mutual funds, other investments, real property valued at
up to $50,000, and similar assets that the
decedent owned in his or her name only, except for the following:
1. Joint tenancy assets.
2. Trust assets.
3. IRAs, 401K accounts, and similar pension accounts.
4. Life insurance.
5. Death benefits.
6. Registered vehicles.
7. Pay from service with the armed forces.
8. Salary from any source not paid before date of death up to $15,000.
9. Pay on death (POD) accounts.
10. Accounts with a named beneficiary.
When is the value of the
assets determined? At the date of death, even if the
affidavit or declaration is signed years later.
When can the small estates
law be used? When at least 40 days have elapsed since the
date of death. The affidavit or declaration cannot be signed
before the 40-day period ends. The new limit of $150,000 applies
to all estates, regardless when the decedent died, provided the
affidavit was signed after Jan. 1, 2012.
Who can use the small
estates law? Beneficiaries and heirs of the estate,
trustees of the decedent's trust, and fiduciaries, among others.
What has to be done to
collect the assets? An affidavit or declaration must be
signed under penalty of perjury. The affidavit or declaration must
include the information described in California Probate Code section
13101. The affidavit or declaration is then given to the
institution that holds the assets, and the assets are transferred to the
person who signed the affidavit or declaration. Creditors of the
decedent are paid from the assets, and the remaining assets are
transferred to the beneficiaries or heirs.
When should the small
estates law not be used? This law should not be used for
estates with substantial indebtedness that might exceed the value of the
assets. Estates that are insolvent or close to insolvency should
be probated instead to take advantage of Probate Code provisions that
determine which creditors will be paid from the estate, and how much.
Probate should also be used in situations in which the beneficiaries or
heirs do not agree on how the assets should be distributed.
Although Probate Code section 13200 allows real property valued up to
$50,000 to be transferred with a small estates affidavit, title
companies might be reluctant to accept the affidavit when determining
whether to issue title insurance. A probate might be necessary to
avoid this problem.