California Probate Code Section 13100 states in part, ”…If the gross value of the decedent’s real and personal property in this state does not exceed one hundred thousand dollars ($150,000),…the successor of the decedent may, without…awaiting probate of a will [or probate without a will]…collect any particular item of property that is…due to the decedent, [or] receive any…tangible personal property of the decedent. Translated into English, that means that the California Probate process is not interested in “small” estates (estates with a fair market value of less than $150,000).
- When calculating the “fair market value” of the gross estate, the numbers need to be based on the actual fair market value of the assetregardless of any debt on the property. The first-time homebuyers upside down on their humble little condo will likely be excluded from the benefits of §13100. (That is why I always say, “If you own any real estate in Southern California, you need a Trust”).
- When determining what property is considered part of the estate (to calculate the value), you only need to consider property that is in the name of the individual decedent. For example, life insurance death benefits, if paid to the children transfer per the terms of the insurance contract, and would be exempt from this calculation. Furthermore, property in a trust would also not be counted since it is technically not part of the estate; so if there is a trust, if property outside of the trust totals less than $100,000, then §13100 would apply.
- Unlike valuing an estate to determine the amount of estate taxes due to the IRS, there is no 6-month after-date-of-death alternate valuation date. The value of the estate is value calculated on the very date of death of the decedent. There is a whole industry of “forensic” appraisal which can come up with these numbers.
Once you have the estate valued, and it is certain that the date-of-death value of the estate is under $100,000, we look to §13101 for the requirements on how to actually effectuate the transfer. This is principally accomplished by preparing an “Affidavit of Small Estate,” which is created by following the very specific instructions and language laid out in §13101. This “affidavit” is just that–an affidavit. Which means that the one who signs the document (typically a surviving child) is swearing (or affirming) under penalty of perjury, that the items contained in the affidavit are true. Among those items are statements that . . .
- . . . At least 40 days have elapsed since the death of the decedent.
- . . . A copy of the death certificate is attached.
- . . . No probate proceeding or case has been conducted.
- . . . The current gross fair market value of the estate is less than $100,000.
- . . . and more.
With a properly prepared, signed, and notarized Affidavit of Small Estate (and an attached death certificate), the decedents of a deceased individual are then legally entitled to access, transfer, and dispose of the deceased individual’s property per the terms of the law, without having to go through the costly and lengthy probate process.
Attorneys can help with the valuation process, but such can be done without an attorney to save money, but regardless, the §13101 affidavit needs to be prepared by an attorney, and at just a little more than a couple hundred dollars, it is extremely affordable.
Since most individuals don’t hope and plan for having a “small” estate when they die (and since nearly all family members are unaware of §13100), it is a pleasant surprise when this extremely simple and inexpensive option pops up during a consultation with the surviving family. Although there is nothing pleasant about losing a loved one, or having to wind up their affairs, sometimes there is a silver lining.