DOES A RELATIVELY SMALL CALIFORNIA ESTATE HAVE TO BE PROBATED?
In California, estates with probate assets (see below for excluded assets) that are valued at more than $150,000 have to be probated.
However, there are various ways to avoid probate in California. A small estates law affidavit procedure is one that may be used if the “probate estate” is $150,000 or less. No documents are required to be filed with the Superior Court.
Figuring Out If The Estate Is Worth $150,000 Or LessTo calculate the value of the estate include:
(1) All real and personal property.
(2) All life insurance or retirement benefits that will be paid to the estate (but not any insurance or retirement benefits designated to be paid to some other person).
Exclusions From The $150,000 Limit Calculation.In determining the total gross value of the estate, certain statutory exclusions are required, i.e., the $150,000 gross fair market value limit is calculated after subtracting the following items:
(1) Vehicles registered with the State under the Vehicle Code including 'non-motor' vehicles, such as trailers--do not count against the $150,000estate value limit.
(2) Also excluded are state-registered mobile homes, manufactured homes, commercial coaches, truck campers and floating homes.
(3) Any amounts due decedent for services in the armed forces.
(4) Up to $5,000 in unpaid salary or other compensation (including compensation for unused vacation) owing to decedent for personal services from any employment.
(5) Also excluded is all property (including real estate) in which decedent held a joint tenancy interest, or a life estate or other interest terminable at death (e.g., employee retirement or death benefits), and property passing outright to the surviving spouse.
(6) Likewise disregarded is any 'multiple-party account' to which decedent was a party at death, regardless of whether the account contained community property, but only to the extent the funds pass to a surviving party, P.O.D. payee or beneficiary.
What Assets Can Be Transferred by Affidavit?(1) Except as set forth above, real property valued up to $50,000 that the decedent owned in his or her name only. Although California Probate Code *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.
(2) Except as set forth above, personal property that the decedent owned in his or her name only valued at $150,000 or less.
(3) All life insurance or retirement benefits that will be paid to the estate (but not any insurance or retirement benefits designated to be paid to some other person).
Note: If the Decedent dies with real property over $50,000 OR a combination of personal property and real property (real property over $50,000) but collectively under the value of $150,000, then the heirs can collect the property with a Petition to Determine Succession to Real And Personal Property pursuant to California Probate Code * 13150 et seq.
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 California*s Small Estates Law Be Used?The affidavit must be signed upon the expiration of 40 days from the date of death.
Who Can Use The Small Estates Affidavit?Only a successor or successors of the decedent can use the affidavit procedure. Successor or successors mean those persons who to succeed to the property under the decedent's Will or by intestate succession. Those persons include beneficiaries and heirs of the estate and trustees of a decedent's trust.
What Has To Be Done To Collect The Personal Property?The affidavit or declaration must be signed under penalty of perjury and include the information required by applicable law. The affidavit or declaration is then given to the institution that holds the personal property.
Do Decedent*s Creditors Have To Be Paid?Yes. Decedent*s creditors cannot be avoided by the affidavit or declaration process. It may be advisable regarding estates that are insolvent or close to insolvency to be probated. That way the California Probate Code dictates which creditors will be paid from the estate, and how much.