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Here we explore the various options available as California probate alternatives. First and foremost, understand that there are often alternatives to probate in every state across the US. It’s important to review your options with a probate law firm before taking action, as probate and probate procedures can often prove to be a maze to laypersons.
Employees at banks and financial institutions will often demand letters of administration or letters testamentary before they are willing to do anything. These are probate documents. They often make people feel like probate is a must. The reality is, these bank employees did not go to law school. They often receive minimal training on probate procedures and defer simply to what they were told by their supervisors.
It might make their job easier if you went through probate, but it does not make yours. If the decedent had life insurance, bank accounts, or other accounts on which beneficiaries were named, then probate may not be necessary as the named beneficiaries would have a claim to those items. It would be a simple matter of providing a death certificate to those financial institutions.
SMALL ESTATE PROBATE TRANSFER
If the value of the estate is not worth more than $184,500, and there is no real property in the estate, then a Probate Code 13100 affidavit may suffice. For example, if a loved one had $100,000 in a bank account on which no beneficiary is named, and that was the only asset in the estate, our firm could prepare and have the heirs sign an affidavit directing the bank to release the funds to the heirs. No probate case would need to be filed to get these funds.
When there is real property involved, but the estate is not worth more than $184,500, we can generally avoid probate by filing a petition to determine succession to real property. While a petition like this still requires a court hearing, it generally allows us to resolve the process and get the property transferred to the heirs much more quickly and cost-effectively than a standard probate case. For estates with real property not worth more than $61,500, a much simpler affidavit procedure may suffice which would require no court hearings.
Note that there are a lot of very specific intricacies to determining whether an estate qualifies for this procedure. First, the dollar figures mentioned here for small estate thresholds change over time, and the actual amount the court uses to determine whether a matter qualifies as a small estate is dependent on the date of death. This small estate figure was $150,000 for a long time for dates of death before January 1, 2020. For dates of death from January 1, 2020, through March 31, 2022, the figure is $166,250.
Beyond this, not all assets are counted towards calculating an estate value and determining if the estate is under the threshold to be able to do a small estate affidavit. Given this, we recommend you contact our office or a probate lawyer in general for a free consultation to help you navigate these situations.
CALIFORNIA PROBATE ALTERNATIVES AND HEGGSTAD PETITION FILING
Probate procedures are sometimes even required where a decedent created a trust. It is important, in creating a trust, to set it up and properly “fund” it by transferring property into the trust. If real property is not transferred into the trust's name, then the successor trustee will not control it. They will not sell it as it is likely still in the deceased individual’s name.
Sometimes, when property is not placed into the trust, we can file a Heggstad Petition (or California Probate Code 850 Petition), wherein we petition the court to recognize and put into the trust property that the decedent clearly intended to put into the trust. For example, the decedent may have listed a trust asset schedule in the back of the trust. Such a procedure is often much easier, quicker, and more cost-effective than going through probate.
For more information about California probate alternatives, schedule a free initial consultation with Werner Law Firm today.
SPOUSAL PROPERTY PETITION
Oftentimes, a Husband and Wife will own real property as joint tenants or tenants in common. If property is held in joint tenancy, the surviving party can file an affidavit death of joint tenant with the county recorder’s office in order to transfer title into their name alone. However, if your spouse passes away and real property is held as tenants in common, then technically you only hold one half of the property in your name, and you will be unable to sell the property or refinance without first putting it entirely in your own name.
As California is a Community Property state, real property acquired during the marriage with community property funds is typically considered community property. If the deceased spouse did not name an alternate beneficiary by way of will or trust for their share of the community property, then their share of the community property will pass naturally to the spouse by intestate succession. It would be tedious to have to go through a full blown probate case simply to transfer such property into a spouse’s name, so a procedure was established (a spousal property petition) through which a spouse could petition the Court to transfer such property into their name. Such a petition is much quicker and easier than probate.
It is typically easier to be successful in a Spousal Property Petition if the deceased spouse had a will leaving everything to their surviving spouse. If there is no will, we will have to demonstrate to the court that the asset we’re addressing is, in fact, community property.
The court may inquire as to facts regarding how the asset was purchased, if there was a down payment, where the down payment came from, etc. These are important issues, because if the property was acquired by the deceased spouse by gift, or inheritance, or purchased with funds the deceased spouse had prior to the marriage, then the property may be consider the spouse’s separate property.
Without a will, under California’s intestate succession laws, separate property is split between the surviving spouse and the deceased spouse’s blood relatives (children, or parents, or siblings, etc.), and in such cases a spousal property petition would not be viable to deal with the asset.
As demonstrated, these situations can get tricky to navigate, especially if a home was purchased years ago. It may be hard to track down information on where a down payment came from back when a property was purchased years ago. With all that said, it is important to contact our office or a probate lawyer in general for a free consultation to help you navigate these situations.