California Small Estate Procedure

SUMMARY

Depending upon the size and composition of the estate and the marital status of the decedent, different methods exist in California for the summary passing of title to estate property to the decedent’s successors or surviving spouse and children without administration.

In addition to methods of transferring property without probate that apply only to a surviving spouse, registered domestic partner, minor child, or other dependent (see below)

There are three distinct procedures, often referred to as “transfers under California small estate statutes,” for collecting a decedent’s assets without a formal probate proceeding as follows:

Probate Code section 890, enacted in 2019 by AB 473, requires the Judicial Council to adjust the dollar amounts to qualify for the various small estate procedures under Division 8 of the Probate Code (Probate Code sections 13000 et seq.) based on changes to the CPI for “All Urban Consumers” published by the United States Bureau of Labor Statistics. Those inflation adjustments are to occur every three years, and the first such adjustment took effect on April 1, 2022. As part of its “Spring Cycle” of proposals, the Judicial Council recently published SPR 22-16 setting forth the amount of those inflation adjustments as follows:

Deaths before April 1, 2022:

• $166,250 for Affidavit for Collection, Receipt, or Transfer of Personal Property (Prob. Code § 13100)
• $166,250 for Court Order Determining Succession to Property (Prob. Code § 13150)
• $55,425 for Affidavit for Succession to Real Property of Small Value (Prob. Code § 13200)
• $16,625 for Affidavit for Collection of Compensation Owed to Deceased Spouse (Prob. Code § 13600)

Deaths on or after April 1, 2022:

• $184,500 for Affidavit for Collection, Receipt, or Transfer of Personal Property (Prob. Code § 13100)
• $184,500 for Court Order Determining Succession to Property (Prob. Code § 13150)
• $61,500 for Affidavit for Succession to Real Property of Small Value (Prob. Code § 13200)
• $18,450 for Affidavit for Collection of Compensation Owed to Deceased Spouse (Prob. Code § 13600)

Subdivision (c) of Probate Code section 890 requires the Judicial Council to publish the inflation-adjusted dollar amounts, together with the date of the next scheduled adjustment. In accordance with that statutory mandate, SPR 22-16 introduces a new Judicial Council form – DE 300 – which lists the dollar limitations for the various small estate procedures both before and after April 1, 2022, and notes that the next scheduled adjustment will occur on April 1, 2025.

Of particular note, for deaths occurring on or after April 1, 2022, Judicial Council form DE-300 must be attached to any affidavit, declaration or petition under any of the small estate procedures under Division 8, including an affidavit under Probate Code section 13100. (See Prob. Code §§ 13101(f), 13152(e), 13200(f), and 13601(e)(2).)

PERSONAL PROPERTY

A key point with using personal property Prob C §13100 small estate affidavits is that not all assets count toward the applicalble $166,250 or $184,500. Prob C §13050 specifically excludes items from the calculation, including:

1. Any vehicle registered under Division 3 (commencing with Section 4000) of the Vehicle Code or titled under Division 16.5 (commencing with Section 38000) of the Vehicle Code.
2. Any vessel numbered under Division 3.5 (commencing with Section 9840) of the Vehicle Code.
3. Any manufactured home, mobilehome, commercial coach, truck camper, or floating home registered under Part 2 (commencing with Section 18000) of Division 13 of the Health and Safety Code.
4. The value of the following property shall be excluded in determining the value of the decedent’s property in this state:(1) Any amounts due to the decedent for services in the Armed Forces of the United States.(2) The amount, not exceeding sixteen thousand six hundred twenty-five dollars ($16,625), as adjusted periodically in accordance with Section 890, of salary or other compensation, including compensation for unused vacation, owing to the decedent for personal services from any employment.

There are a number of potential disadvantages in using the summary procedure.

1. Possible Disagreement Among Decedent’s Successors in Interest. If the decedent died intestate and the assets are separate property, the successors could be a spouse or registered domestic partner and children from another marriage or relationship. All of the successors to the assets being transferred would be required to sign the affidavit. Serious problems could arise if these parties do not get along and cannot agree on who is entitled to what portion of the property and whether the property is community or separate property.
2. Decedent’s Liabilities. You must know the extent of the decedent’s liabilities, e.g., whether there is credit card debt or last illness expenses far in excess of the assets to be collected. A further consideration is that if all the assets collected are used to pay the decedent’s debts, the successor in interest may be paying more than the proportional share attributable to the asset than would have been assessed in a probate. In sum, when there are issues concerning substantial or unknown liabilities, use of probate administration may be more appropriate. If the decedent has significant debt issues, you should weigh the “benefit” of giving formal notice in a probate administration, and the time bar built into a Notice to Creditors, versus using the informal, summary procedure. .
3. Refusal to Accept. In addition, some property holders initially refuse to accept a Prob C §13100 affidavit or declaration. Sometimes transfer agents of small non-publicly traded securities, as well as small independent banks or brokerage houses, need to be persuaded to act in accordance with the law.

REAL PROPERTY

There are two separate summary administration procedures that a decedent’s successor in interest (as defined in Prob C §13006) may use to transfer a decedent’s interest in California real property, depending on the value of the property:

1. Prob C §13150Petition Procedure. A petition under Prob C §§13150–13158 is the most commonly used procedure for transferring a decedent’s interest in real property or real and personal property in California with a gross value not exceeding $166,250 or $184,500, as applicable, as of the date of death. If the basis for petitioner’s claim is the decedent’s will, a copy of the will must be attached to the petition. Prob C §13152(c). A completed Inventory and Appraisal (Judicial Council Forms DE-160, DE-161) must be attached to the petition, verifying the value of the property. Prob C §13152(a)(2), (b). The petitioner may select any currently appointed probate referee located in the county where the property is situated. Prob C §13152(b).
   The petition requesting a court order may be filed on the 41st day after decedent’s death (Prob C §13151) rather than after 6 months when using the Prob C §13200 affidavit procedure (Prob C §13200(a)) (see paragraph 2. below). If California probate proceedings for administration of the decedent’s estate are pending or have been conducted, the petition cannot be filed without the personal representative’s written consent. Prob C §13152(a)(5), (d). See Prob C §13150.
   The person who receives the property under the court order is personally liable for the unsecured debts of the decedent.
2. Affidavit Under Prob C §§13200–13210For Transfer of Real Property. If the decedent died on or before April 1, 2022, an affidavit procedure is available under Prob C §§13200–13210 for transfer of real property when the gross value of all of decedent’s real property in California does not exceed $55,245, regardless of the total value of the estate (Prob C §13200(a)(5). On or after April 1, 2022 the amount is $61,500. If the gross value of all of the decedent’s real property located in California does not exceed the applicable threshold amount, an affidavit to transfer the real property can be filed with the probate court under Prob C §§13200–13210. The value must be shown by an inventory and appraisal by a probate referee. Prob C §13200(a)(5).
   There are few times when the affidavit procedure can be used, because of the extremely low value of real property that can be transferred in this way. When it can be used, it is generally less expensive than the petition procedure because it does not involve a court proceeding. It also requires an inventory and appraisal only of the decedent’s California real property (Prob C §13200(c)), whereas the court proceeding requires an inventory and appraisal of the decedent’s California real and personal property (Prob C §13152(b)).
   Before the affidavit can be filed, more than 6 months must have passed since the date of death (Prob C §13200(a)(6)), and all last illness expenses, funeral expenses, and unsecured debts of the decedent must have been paid (Prob C §13200(a)(8)). If California probate proceedings for administration of the decedent’s estate are pending or have been conducted, the procedure cannot be used without the personal representative’s written consent. Prob C §13210. See Prob C §13200(a)(7), (e).

CONTACT Quinn & Dworakowski, LLP FOR AN INITIAL CONSULTATION

Understanding the issues discussed in this article requires the assistance of a qualified probate attorney who can better assess the appropriate course of action. If you are the executor or other nominated person in a Will and you wish to gain more information please contact Quinn & Dworakowski, LLP for a free consultation. We will spend time with you to answer your questions.

From our office in Southern California, we represent families in all California counties, including Southern California Counties such as Imperial County, Los Angeles County, San Bernardino County, and San Diego County. We also represent parties residing outside of California, including foreign countries, that have probate matters affecting real and/or personal property in California.

Call us at 949-660-1400.

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