Jun 5

Small Estates


On occasion we will receive a client who has had a parent or other family member pass leaving behind assets not worth a lot. There will be enough there to worry about but the idea of the expense and time needed to handle a full on estate administration seems daunting taking into consideration the amount the estate is worth. The primary question is always “Can’t we do this quickly and inexpensively.” The answer as in most areas of the law is “It depends.”

For example, recently a surviving spouse came to us shortly after the death of the spouse. There was a nice little house in a good neighborhood and a rather substantial investment account involved along with all the personal effects of the spouse that had died. The deceased spouse had left a will passing all assets to the surviving spouse upon meeting a survival period of 10 days, which was satisfied. On first glance, because there was real estate involved exceeding $20,000 in value and an investment account exceeding $300.000 we thought a standard probate would be involved with all the other procedures that go along with a probate matter such as accountings and the issuance of letters and so on. But as we dug in deeper we saw that the spouse that had died had actually transferred the title in the house to the other spouse some years before and the investment account was a transfer on death (TOD) account naming the surviving spouse as the death beneficiary. Those two assets, because of how they were titled, were not part of the decedent’s estate. In fact all that remained in the estate was the decedent’s personal effects, some clothing, art work, and other collections. They appraised at under $100,000 which allowed us to proceed under California’s Summary Administration rules.

Most, if not all states, California included, provide a quick and inexpensive way to handle estates below a certain value. Each state will have its own limits or definition as to what constitutes a small estate and each will set its own special requirements for administering the small estate. In California, if the estate is deemed to be small, less than $100,000 with other limits as to any real property involved, the estate can be administered through the use of affidavits as long as they meet the requirements stated in the Probate code. They have to be made under oath, identify who is getting the asset, why that person is entitled to it and how much it is worth, be made more than 40 days after death, but after all the legal requirements are met, then the procedure is very simple, direct and fast. The thing the person claiming the asset through this procedure has to remember is that there are penalties for fraudulently claiming the asset, they are personally liable for the value of the asset to creditors if it turns out that the asset they took should have been used to pay creditor claims and if a formal probate proceeding is opened up at a later time, the asset they took or its value can be pulled back into the estate for formal probate proceedings.

It is good to know that these inexpensive and quick methods are available to administer small estates. As with anything quick and easy, there are potential drawbacks, but as long as creditors are taken care of before estate assets are distributed to heirs then these methods of summary administration can be very helpful and beneficial.

This blog contains thoughts and ruminations on certain subjects. These thoughts are not intended to be given or taken as legal advice. If anything in this entry piques your interest or seems to apply to your situation please do not hesitate to contact us through our website at http://www.schinzelaw.com/
or directly by telephone at (760) 510-4900.

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