David J Collier

Transferring Deceased Person’s Property in California without Probate through Summary Procedures

So dear old eccentric Uncle Jim has gone to his reward and you learn to your shock that he actually owned more than that ancient, beat-up Chevy. Even more shocking, he left it all to you. How do you go about transferring Uncle Jim’s assets to your name? And is it going to cost more than the value of the estate to do so?

The first thing to look at is whether Uncle Jim had placed his assets into a trust. No. Didn’t think so. He mistakenly thought that trusts were for the “fancy people.” Too bad. A trust would have saved you time and money. Nor did he hold assets in joint tenancy or use a transfer-on-death form. Ah, well.

So transferring the assets will probably require the time consuming, complicated, and expensive court process known as Probate. Wait. There may still be hope. If the value of the estate is small, you can get title to the assets much more quickly and inexpensively through the summary procedures set forth in the California Probate Code.

Most of the summary procedures are limited to estates with small values. For example, estates with values of $150,000 or less can be transferred through summary procedures to any successor. In contrast, estates of any size can be transferred through summary procedures to a spouse entitled to the property. If Uncle Jim had left his worldly goods to his spouse, she could have used a cheaper and quicker summary process. But Aunt Maude passed on years ago.

To determine whether an estate meets the $150,000 value threshold, the gross values of each of the decedent’s non-trust and non-transfer on death assets are counted. There is no offset for mortgages or other debts. So, if Uncle Jim left a residence valued at $300,000 with a mortgage of $200,000 to his favorite niece (that would be you), then you would not be able to use a summary procedure to obtain title to the residence, even though the net value of the residence is only $100,000. But, if the residence was valued at $150,000 at the time of Jim’s death and there were no other assets in Jim’s estate, you would be able to use a summary procedure.

There are three summary procedures in which only an affidavit (sworn statement under penalty of perjury) rather than a court order is required to transfer the decedent’s property. First, successors can collect the decedent’s personal property by affidavit if 40 days have elapsed since the death and the value of his estate is $150,000 or less. Personal property would in your case be Uncle Jim’s gun collection, his old baseball cards (probably valuable), some lovely antique rings of Aunt Maude’s, a small savings account, and a wad of cash under the mattress. Oh, and the Chevy.

Of particular use to many estates is the ability to collect by affidavit a beneficial interest in a mortgage—which in a weird quirk of the law is considered personal property—as long as the decedent’s estate meets the $150,000 value threshold. This means that if Uncle Jim left you the $100,000 mortgage he held on Cousin Jimmy’s ranch, then you can probably get title to the mortgage by recording the appropriate affidavit. For more information on small estate affidavits for personal property click here.

The second affidavit-based summary procedure involves only real property, which is land and anything permanently attached to it, but not movable things like Uncle Jim’s mobile home. A beneficiary can collect a decedent’s California real property by affidavit if the value is $50,000 or less and 6 months have elapsed from the death. So, you can probably collect Uncle Jim’s 1/150,000th interest in the mineral rights to that lot in Palm Desert by affidavit if you wait a few months. Here is a link to the correct form: click_here.

The third affidavit-based summary procedures applies only to a surviving spouse, who can collect the deceased spouse’s real property by affidavit 40 days after the decedent’s death for any size estate. This comes in handy when a surviving spouse wants to sell the family residence, for example. In that case, the title company will probably take care of preparing the affidavit.

Two of the summary procedures require a court hearing, notice to certain relatives, heirs, and beneficiaries, and a court order. One of these court-based summary procedures allows any successor to collect any of the decedent’s real or personal property as long as the value of the decedent’s non-transfer on death real and personal property in California is $150,000 or less. The other applies only to a spouse.

Both the affidavit-based and court-based summary procedures require an appraisal by a probate referee. A list of probate referees can be found at this link. All summary procedures are relatively private, because with summary procedures, unlike full probate, there is no requirement to publish notice of the proceedings in the local newspaper. But, summary procedures carry some risk, because the persons who collect property under any of the summary procedures are liable to the decedent’s creditors up to the amount collected. Luckily, Uncle Jim didn’t believe in debt, so he had no creditors. If he had, and if they knew about the rings, guns, cash, and baseball cards, they could claim the value of those items from you.

The lack of court supervision makes summary procedures relatively quick and cheap. As long as the decedent’s creditors are not lurking, you should consider a summary procedure if possible. For a quick layout of the various summary procedures, please check out this link.

For more information or advice on probate or trust administration, please call me at 707-636-4806.

David J. Collier practices law in Sonoma County in the areas of Real Estate, Wills, Trusts, and Probate. David is responsible for the content of this ADVERTISEMENT. The information in this article is not legal advice. To obtain legal advice you must discuss your unique circumstances with an attorney.

 

David J Collier

Top Five Reasons You Should Have a Comprehensive Estate Plan Now

An estate plan is a set of legal actions you take now to provide for yourself and loved-ones upon your incapacity or death. If you have been putting off writing your estate plan, here are five reasons you should put a comprehensive estate plan in place now:

  1. Control. It is your money. You have worked hard to accumulate your nest egg. If there is some left over at the end, shouldn’t you be the one to direct who gets it? Without the proper documents in place, complex and often counter-intuitive rules from the State of California and your investment plan documents control who inherits your estate. With a properly written estate plan in place, you are in charge.
  2. Unintended consequences. Say you put your property in joint tenancy with your friend so that she gets your property when you die instead of your heirs. But what if your friend dies first or transfers her interest out of joint tenancy? Then without planning, your property would go to your heirs anyway. With a properly written estate plan in place, you can minimize or eliminate unintended consequences.
  3. Incapacity. Most of us will lose the ability to make financial and health care decisions for a period of time before we die. If you become incapacitated, then without a plan in place, your financial and physical care would likely require expensive and time-consuming court involvement that would only further burden your family. With a properly written estate plan in place, loved-ones of your choosing could seamlessly provide for your care.
  4. Family. A cohesive and caring family is one of the proudest achievements of any parent. A carefully drafted estate plan eases your loved-ones’ administrative burden and fosters family unity after your death. With a properly written estate plan in place, you can keep your kids out of court, because your plan documents will dictate who is in charge of distributing your estate and the rules under which your estate gets distributed.
  5. Probate. Probate means money and delay when you die. With a properly written estate plan in place, you can spare your family the trials of probate.

As you can see, there are at least five reasons you should start your comprehensive estate plan today. For more information or to get started on your estate plan, please call me at 707-636-4806. David J. Collier practices law in Sonoma County in the areas of Real Estate, Wills, Trusts, and Probate. David is responsible for the content of this ADVERTISEMENT. The information in this article is not legal advice. To obtain legal advice you must discuss your unique circumstances with an attorney.

David J Collier

The Importance of Advanced Health Care Directives

You should have an Advanced Health Care Directive (AHCD), because it keeps you in control of your end-of-life medical care. An AHCD —sometimes called a “living will,” “power of attorney for health care,” or “health care proxy”—has two primary purposes. First, an AHCD allows you to appoint a person (called your “agent”) to make health care decisions for you. Second, an AHCD instructs your agent about the type of health care you would like to have. For example, with an AHCD, you can:

  • Limit when your agent’s authority becomes effective—immediately, or when you become unable to make decisions for yourself.
  • Enable your agent to make post-death decisions for you, like how to dispose of your remains, what kind of memorial you want, whether you want to donate organs or tissue.
  • Authorize your agent to prolong your life as long as possible or withdraw treatment according to your wishes.

Without an AHCD in place, troubles may arise if you become incapacitated or disabled to the point that you cannot make health care decisions for yourself. In that case, health care professionals generally look to family members to determine what type of care you would receive. But:

  • What if family members are unavailable? With an AHCD in place, your named successor agent steps if your agent is unavailable.
  • What if family members don’t agree? With an AHCD in place, your agent is in charge and will act according to your wishes.
  • What if family members are overwhelmed by the gravity of the end-of-life choices? With an AHCD in place, your family members are comforted knowing that you have already made the end of life choices.

As you can see, having an AHCD would keep you in control of your end-of-life care and foster certainty and peace of mind for all involved at the end of your life. To get started, I recommend visiting agingwithdignity.org to check out their “Five Wishes” AHCD form. It is a very simple and straight forward form. If the choices on the Five Wishes form do not meet your wishes, then please call me at 707-636-4806 to discuss a detailed attorney drafted form.

David J. Collier practices law in Sonoma County in the areas of Real Estate, Wills, Trusts, and Probate. David is responsible for the content of this advertisement. The information in this article is not legal advice. To obtain legal advice you must discuss your unique circumstances with an attorney.

David J Collier

Five Tips for Executors and Successor Trustees of Decedent Estates

Both executors and successor trustees are estate “fiduciaries.” So, if you have been appointed executor of a will or successor trustee of a trust, usually at the death of a loved-one, you can be held personally liable for any losses caused by your failing to follow the rules.  Here are five tips to get you started and keep you out of trouble:

  • Take a deep breath. Usually there is nothing major that needs to be done within the first few weeks after the death. To start, locate the original estate planning documents, including any wills, trusts, and amendments. Then, obtain at least seven certified copies of the death certificate.
  • Gather the account statements. You will need identifying and titling information for all estate assets. Gather any bank or brokerage statements that are lying around the decedent’s house and start listing all the accounts by type, institution, and account number. Statements and refunds will keep arriving, so have the mail forwarded to you. For real estate, get copies of the deed, mortgage, and any title policies from a title company or online title information service.
  • Diligently track expenses. Relatives or creditors may challenge your actions as fiduciary. Keeping thorough records will aid your defense. List each expense by date, account, check number, payer, and payee. Include detailed information about the purpose. Your initial attention to detail here will pay off later when you prepare statutorily required financial reports and individual and estate income tax returns.
  • Heed the cardinal rule. Though shalt not mix estate money with your money! This goes both ways: don’t put estate money in your accounts and don’t put your money in estate accounts—even temporarily. While you may pay for funeral and other “last expenses” out-of-pocket and get reimbursed later, you should pay all other estate bills out of estate accounts.
  • Get competent advice before you act. Although you may be able to handle most aspects of a simple estate yourself, you should at least consult with an Estate Attorney and a CPA shortly after the death. Distributing assets, making death benefit claims, or paying creditors, without thoughtfully considering the consequences, might irrevocably harm the estate and make you personally liable.

As you can see, attention to detail and competent advice will help you meet your fiduciary responsibilities as executor or successor trustee. For more information or advice on probate or trust administration, please call me at 707-636-4806.

David J. Collier practices law in Sonoma County in the areas of Real Estate, Wills, Trusts, and Probate. David is responsible for the content of this advertisement. The information in this article is not legal advice. To obtain legal advice you must discuss your unique circumstances with an attorney.

David J Collier

Joint Tenancy Is No Substitute for an Estate Plan

You and your partner finally find the perfect real estate. At closing, your escrow officer asks how you would like to hold title. Without knowing why, you simultaneously blurt out, “JOINT TENANTS!”

Joint tenancy is a popular form of co-ownership, primarily because of its built-in “RIGHT OF SURVIVORSHIP.” This means that if one of the owners dies, the property automatically passes, despite any will, to the surviving owners, without the need for an expensive and time-consuming probate action.

But, joint tenancy does not eliminate your need for a will or other estate planning. Without estate planning, even property you acquire as joint tenants would pass at your death according to the state’s rules of INTESTACY in the following situations:

  • You are the last joint tenant to die.
  • You and the other joint tenants die simultaneously.
  • Your co-owner’s creditors attach his or her interest.
  • Your co-owner transfers, deeds, or borrows against the property, even if done without your consent or knowledge.

In addition, joint tenancy is often inappropriate for MARRIED COUPLES, because:

  • Property held by a married couple as joint tenants won’t get a full “step up in basis” at the death of the first spouse to die. This means that the surviving spouse may pay higher capital gains taxes when the property is sold.
  • Married couples holding title as joint tenants may not be able to sell, transfer, or mortgage the property while one or both are mentally incapacitated.
  • A divorce court may award the joint tenancy property of a divorcing couple to the surviving spouse if one spouse dies during divorce proceedings.

As you can see, joint tenancy does not eliminate the need for estate planning and may be an inappropriate method for you to take title. To discuss how you should take title or get started on an estate plan that fits your needs, please call me at 707-636-4806.

David J. Collier practices law in Sonoma County in the areas of Real Estate, Wills, Trusts, and Probate. David is responsible for the content of this advertisement. The information in this article is not legal advice. To obtain legal advice you must discuss your unique circumstances with an attorney.

David J Collier

Will or Trust… Which is Best for Your Estate Plan?

An estate plan is a set of legal actions you take now to provide for yourself and your loved-ones upon your incapacity or death. Although most of my clients choose a trust as the core document in their estate plan, a will has many benefits. With a will, you can:

  • Plan for contingencies, like an intended beneficiary dying before you
  • “Set it and forget it”—no retitling of assets is required
  • Nominate guardians for your minor children
  • Choose the person that will administer your estate when you die
  • Make specific gifts at your death, like “my purple clock, serial number 11041999, goes to my cousin Wendy”
  • Change your mind at any time during life (if competent).

With a will you can control who gets your assets when you die. If you die without a will or another mechanism for passing your assets, then your assets pass to your “INTESTATE successors.” These people include your spouse, children and descendants, but also could include your parents, cousins, and even in some cases, your spouse’s relatives. You might not even know some of these people! A will solves the problem of intestacy.

But, most clients use a trust as their main estate planning document. Although trusts usually require retitling of assets, a properly written trust has all the benefits of a will, with added benefits of privacy and cheaper and easier post-death administration. For example:

  • Trusts are usually administered privately, but wills are usually administered in probate court.
  • Private administration of a trust is generally much cheaper and easier than probate administration of a will.
  • A properly written trust allows your chosen successor to administer your assets if you become incapacitated before you die.

As you can see, wills and trusts are both important estate planning tools. For more information or to discuss whether a will or trust is appropriate for your estate plan, please call me at 707-636-4806.

David J. Collier practices law in Sonoma County in the areas of Real Estate, Wills, Trusts, and Probate.  David J. Collier is responsible for this content of this advertisement. The information above is not legal advice. To obtain legal advice you must discuss your unique circumstances with an attorney.

David J Collier

Estate Plans are for Peace of Mind

An estate plan is a set of legal actions you take now to provide for yourself and your loved-ones upon your incapacity or death. You may need an estate plan if any of the following apply:

  • You care about who will receive your assets when you die
  • You are remarried and want your children from a prior marriage to inherit some of your assets
  • You have minor children and care about who would take care of them if you die before they become adults
  • Much your property is in 401k, IRA, life insurance, joint tenancy, or other forms that are not controlled by your will or trust
  • You care about who would manage your assets, healthcare, and personal care if you become unable to make decisions for yourself
  • You want your end of life care instructions, like whether to “prolong life” or “not to prolong life,” respected.

One of the biggest reasons you might need an estate plan is to spare your loved-ones the hassle and expense of PROBATE or CONSEVATORSHIP. Probate would be necessary if you die leaving more than $150,000 in directly owned assets. Conservatorship would be necessary if you become unable to take care of yourself and have not already appointed a person to manage your affairs. In both Probate and Conservatorship, a judge appoints someone to handle your personal care or assets. That “someone” must regularly “account” to the court and often must obtain prior court approval for actions necessary to properly handle your affairs. The court’s involvement can cause expense and delay. But, you can avoid Probate and Conservatorship with proper estate planning.

As you can see, an estate plan has many benefits. For more information or to get started on your estate plan, please call me at 707-636-4806.

David J. Collier practices law in Sonoma County in the areas of Real Estate, Wills, Trusts, and Probate. David is responsible for the content of this advertisement. The information in this article is not legal advice. To obtain legal advice you must discuss your unique circumstances with an attorney.