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

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.