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Can a Small Estate be Handled Without Probate?

By Brad N. Baker

Not all estates without a Trust or Will have to be probated even if the decedent did no planning whatsoever; however, the larger the dollar sums in the estate, the less likely that probate can be avoided. California has a statute on the books that allows up to $150,000 to be transferred without probate after a person dies.

How do I know if my estate qualifies to transfer assets without probate?

In computing the dollar amount to see if you qualify for this statute, there are certain assets that are NOT, counted.  California Probate Code Section 13050 sets forth the exhaustive list, but they are basically as follows:

1.  Any assets that are held in joint tenancy with a person who survived the Decedent even if the surviving joint tenant did not contribute to the jointly held asset.

2.  Any vehicles with title in the name of the Decedent.

3.  Any boats held in the name of the Decedent (yes even multi-million-dollar yachts are not counted towards the $150,000 limit!) .

4.  Any mobile home, manufactured home, truck camper, and, drummmm rolllll, any floating home held in the Decedent’s name.

5.  Any payable on death accounts (POD accounts), assets held “as trustee for” (ATF accounts), or assets that have a named beneficiary, such as life insurance, annuities, IRAs, and 401(k)s.

If you are under the $150,000 limit after excluding all of the above items from the computation, then a couple of hurdles must still be cleared to be able to use the affidavit/declaration process that is set forth in Probate Code Section 13101.

What are the steps to transferring assets without probate, if I qualify?

1.  At least 40 days must have elapsed since the Decedent died.

2.  No probate proceeding is open or has been opened for the Decedent.

3.  Oh yeah, you have to be entitled to the asset being transferred by way of the 13101 Affidavit.  (Sometimes this is a little tricky, so check with a lawyer to make sure that the correct people are signing the declaration to get the transferred property.)  California Probate Code Section 13006 (just Google it!) sets forth who are the “Successors” of the Decedent.

4.  You will need a certified copy of the Decedent’s death certificate for each transfer requested. All individual(s) or trustee(s) entitled to the asset must sign the declaration and have the signature(s) notarized.  (Yes, the trustee named in a Pour-Over Will would be the Successor, not the ultimate beneficiaries of the Trust.)

Can I transfer assets by myself?

Many people find that although the above can be accomplished on their own, the 13101 declarations seem to work better in the world of finance when an attorney’s letter attaches the declaration when it is mailed or delivered to the institution holding the Decedent’s asset.  (I believe that the holder of the asset has a better level of comfort that they are turning over the asset to the correct person(s) when an attorney’s letter goes with the declaration.)

Should I get Durable Powers of Attorney even if I don’t have a Will?

So, do we really need to plan if this nifty procedure exists?  If you promise to die quickly once you lose capacity, then you are pretty safe if you are within the statutory limits. However, if no planning whatsoever is done, and you don’t die quickly, then we could be in a conservatorship situation because no one has access to the accounts until 40 days after the Decedent “dies”.  See the gap?  It doesn’t work for incapacitated situations.  So it is recommended that you still get Durable Powers of Attorney in place, one for Asset Management, and another for Medical Decisions, even if you don’t do a Living Trust or a Will.

Please Note: This document does not constitute legal advice. Please consult an attorney for legal advice on what to do in a particular situation.

Albro Lundy III attorney
Brad N. Baker

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