Small Estates in California

Estates of decedents that do not exceed $166,250 do not need to be probated in California.  An affidavit or declaration signed under penalty of perjury at least 40 days after the death can be used to collect the assets for the beneficiaries or heirs of the estate.  No documents are required to be filed with the Superior Court if the small estates law (California Probate Code Sections 13100 to 13116) is used.  

What assets are included in the $166,250 limit? Bank accounts, brokerage accounts, stock, bonds, mutual funds, other investments, real property valued at up to $50,000, and similar assets that the decedent owned in his or her name only, except for the following:

1.  Joint tenancy assets.
2.  Trust assets.
3.  IRAs, 401K accounts, and similar pension accounts.
4.  Life insurance.
5.  Death benefits.
6.  Registered vehicles.
7.  Pay from service with the armed forces.
8.  Salary from any source not paid before date of death up to $15,000.
9.  Pay on death (POD) accounts.
10.  Accounts with a named beneficiary.

When is the value of the assets determined? At the date of death, even if the affidavit or declaration is signed years later. 

Who can use the small estates law? Beneficiaries and heirs of the estate, trustees of the decedent's trust, and fiduciaries, among others.

What has to be done to collect the assets?  An affidavit or declaration must be signed under penalty of perjury.  The affidavit or declaration must include the information described in California Probate Code section 13101.  The affidavit or declaration is then given to the institution that holds the assets, and the assets are transferred to the person who signed the affidavit or declaration.  Creditors of the decedent are paid from the assets, and the remaining assets are transferred to the beneficiaries or heirs.

When should the small estates law not be used? This law should not be used for estates with substantial indebtedness that might exceed the value of the assets.  Estates that are insolvent or close to insolvency should be probated instead to take advantage of Probate Code provisions that determine which creditors will be paid from the estate, and how much.  Probate should also be used in situations in which the beneficiaries or heirs do not agree on how the assets should be distributed. 

Although Probate Code section 13200 allows real property valued up to $55,425 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.