Transferring real property without going through a full probate process in California is frequently impossible. This is often because much of the real estate in populated areas of California has a high market value. That being said, there are a couple of methods to transfer real property when the dollar thresholds under California law are met.

Petition to Determine Succession to Real Property

The first method involves a special petition to the court requesting that the court issue an order determining who the new owner of the property is. The Judicial Council of California has created a special form for this purpose. Use of this form involves a couple of requirements:

1. There is no probate proceeding in California of the deceased person's estate, or the personal representative may consent to using this method; and
2. The gross estate is valued at no more than $150,000.

The value of the gross estate is determined by preparing a special form called an "Inventory and Appraisal", which lists the assets that would've been subject to probate. This form is then sent to special court-appointed "probate referees" (appraisers) who then provide the market values of those assets as of the date of death. The relevant law is found in California Probate Code Sections 13150-13158.

Affidavit re Real Property of Small Value

The second method involves an affidavit that is filed with superior court and requires that the value of all of the deceased person's California real estate not exceed $50,000. Again, the value of the real estate is determined by a probate referee on an Inventory and Appraisal. This procedure can only be used after 6 months have passed since the date of death. Once the affidavit is filed with the superior court, a certified copy is then recorded in the county where the real estate is located. The relevant law is found in California Probate Code Sections 13200-13210.

As you can imagine, one major hurdle is that real property of any consequence in California is rarely less than $150,000 or $50,000, which is why it is especially important for owners of real estate in California to engage an estate planning lawyer.

The California probate process is expensive and time-consuming. It also involves documents to be filed with the Court, which are public. As a result, revocable living trusts are generally considered the most ideal estate planning tool rather than solely a Will, which is always subject to probate.

That being said, even where only a Will is used, there may be some instances where the probate process may be avoided. Generally, speaking, these methods are usually employed by heirs or beneficiaries of people who have relatively little wealth. In other words, if you have a substantial amount of assets, you, your family, and your beneficiaries will most likely be better off, from an economic perspective, setting up a revocable living trust.

Small Estate Affidavit

If your real property and personal property does not exceed $150,000, then your beneficiaries or heirs may utilize a "Small Estate Affidavit" to collect your assets after you pass away. California Probate Code Section 13100 provides the relevant law:

Excluding the property described in Section 13050, if the gross value of the decedent’s real and personal property in this state does not exceed one hundred fifty thousand dollars ($150,000) and if 40 days have elapsed since the death of the decedent, the successor of the decedent may, without procuring letters of administration or awaiting probate of the will, do any of the following with respect to one or more particular items of property:

(a) Collect any particular item of property that is money due the decedent.

(b) Receive any particular item of property that is tangible personal property of the decedent.

(c) Have any particular item of property that is evidence of a debt, obligation, interest, right, security, or chose in action belonging to the decedent transferred, whether or not secured by a lien on real property.

It's important to realize that your beneficiaries or heirs must first wait 40 days after you death. In addition, this process cannot be used to transfer your real estate (even though the value of your real estate is used in determining whether you may avail yourself of the Small Estate Affidavit procedure). 

People occasionally have questions about what is included in the $150,000 calculation. First of all, it does not include real or personal property outside the state of California. California Probate Code Sections 13050 and 13500 provide some exclusions:

California Probate Code Section 13050:

(a) For the purposes of this part:

(1) Any property or interest or lien thereon which, at the time of the decedent’s death, was held by the decedent as a joint tenant, or in which the decedent had a life or other interest terminable upon the decedent’s death, or which was held by the decedent and passed to the decedent’s surviving spouse pursuant to Section 13500, shall be excluded in determining the property or estate of the decedent or its value. This excluded property shall include, but not be limited to, property in a trust revocable by the decedent during his or her lifetime.

(2) A multiple-party account to which the decedent was a party at the time of the decedent’s death shall be excluded in determining the property or estate of the decedent or its value, whether or not all or a portion of the sums on deposit are community property, to the extent that the sums on deposit belong after the death of the decedent to a surviving party, P.O.D. payee, or beneficiary. For the purposes of this paragraph, the terms “multiple-party account,” “party,” “P.O.D. payee,” and “beneficiary” are defined in Article 2 (commencing with Section 5120) of Chapter 1 of Part 2 of Division 5.

(b) For the purposes of this part, all of the following property shall be excluded in determining the property or estate of the decedent or its value:

(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.

(c) For the purposes of this part, 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 fifteen thousand dollars ($15,000), of salary or other compensation, including compensation for unused vacation, owing to the decedent for personal services from any employment.

California Probate Code Section 13500:

Except as provided in this chapter, when a spouse dies intestate leaving property that passes to the surviving spouse under Section 6401, or dies testate and by his or her will devises all or a part of his or her property to the surviving spouse, the property passes to the survivor subject to the provisions of Chapter 2 (commencing with Section 13540) and Chapter 3 (commencing with Section 13550), and no administration is necessary.

The Small Estate Affidavit procedure can be very useful for collecting smaller assets, such as lingering bank accounts that a person forgot to re-title in the name of his or her trust. Often, the successor Trustee of the deceased person's trust will rely on this to collect assets that are rightfully considered part of the trust estate for ultimate distribution to the trust beneficiaries. 

The Statutory Will is essentially a form with a number of blanks for the Testator to fill in. The methods by which your assets will be transferred at the time of your death are somewhat limited, but may be more than adequate for individuals with small estates. It is important to note, however, that relying upon a Will, statutory or otherwise, may require your estate to be probated.

The California Statutory Will and the laws that give rise to it are provided in California Probate Code Sections 6200-6243. Under Probate Code Section 6220, any individual of sound mind and over the age of 18 may execute a California Statutory Will. A Statutory Will must also be witnessed by at least 2 people who both observe the Testator's signing and who both sign their names in the presence of the Testator, as described in Probate Code Section 6221(b).

If you are in a situation where you do not have time to consult with an estate planning lawyer, you may want to establish a Statutory Will as a stop-gap measure until you are able to meet with a lawyer to discuss the specifics of your estate plan. Often, this might be before a vacation or a major medical procedure. By having a Statutory Will in place, you will have a plan, even if imperfect, for how your assets will be distributed.

For a complimentary consultation to determine whether a Statutory Will is appropriate for your situation, you may click here to schedule an appointment with us.

In California, a probate homestead allows a surviving spouse and children to remain in the deceased spouses home after he or she pass away. It may also have the effect of superseding the deceased spouse's wish to have his or her home be distributed to a non-family member upon death.

This could be invoked by a surviving spouse or children if the deceased spouse willed the home to another person to their exclusion. Although this may ultimately frustrate the deceased spouse's wishes, it may be used by a surviving spouse and minor children to protect the home from creditors, the beneficiaries of the deceased spouse's Will or his or her heirs at law.

Waivers

Like a family allowance, it's possible to obtain a waiver from a spouse of his or her right to request a probate homestead. In addition, provisions in your Will or Trust of your intent to leave the home to someone other than your surviving spouse may help prevent the court from ordering a probate homestead for the benefit of your surviving spouse.

Often, it is best to deal with waivers prior to, or at the beginning stages of marriage, as that is when future spouses are most amenable to such agreements. Once spouses have been married for a while, a request for a waiver may raise suspicions in cause partners to lose faith in one another.

The vast majority of clients we encounter never have concerns about a probate homestead. However, where the strength of a marriage has weakened, or where the parties are contemplating distributing property in a non-traditional way (i.e., leaving property for the benefit of someone other than the surviving spouse or children), it would be wise to consider the possibility of a probate homestead.