In the third episode of their probate alternatives series on Absolute Trust Talk, host Kirsten Howe and associate attorney Jessica Colbert delve into two streamlined legal procedures that help families avoid the costly and time-consuming probate process when transferring small real estate estates in California. They explain an affidavit procedure for properties valued under $61,500 and a petition for determining succession to property for estates under $184,500. The discussion covers the requirements for each method, including waiting periods, the role of a probate referee, and when each procedure is applicable. This episode offers essential insights into navigating these simplified legal paths. Plus, stay tuned for a sneak peek into significant probate law changes coming in 2025.
Time-stamped Show Notes:
0:00 Introduction
0:55 A small estate affidavit only covers personal property. However, there is another way to bypass probate, even with property—listen in!
2:15 A small estate affidavit requires the appraised value of the property to be less than $61,500. Learn more about the requirements here.
2:52 What is a probate referee, why do you need to know, and who can be one?
4:22 Looking for a non-probate alternative that allows for an estate worth over the $61,500 threshold? Consider a succession petition.
7:24 We’re expecting legal changes next year concerning probate and personal residence.
Transcript:
Hello, and welcome back to Absolute Trust Talk. I’m Jessica Colbert, an associate attorney at Absolute Trust Counsel. I’m joined by our managing attorney, Kirsten Howe.
Today, we are doing our third part in a series on alternative procedures for probate. We’re always trying to avoid the long, complicated process of probate, and there are situations when a decedent has property titled in their name alone without beneficiary designations, where we can do some alternative procedures to avoid that.
We previously discussed a procedure called a small estate affidavit, which can be used to access a decedent’s personal property. We are now going to discuss a procedure similar to this that can be used for real property.
So, Kirsten, would you please let us know a little bit about that?
Sure. Just so everybody’s clear, personal property is anything that’s not real estate. So, it could be cash, stock, or a couch—whatever it is, that’s all considered personal property. It could even be your cat. Everything else is what we call real property, which is real estate.
This mini procedure for real estate of small value is available without having to do a full-on probate. To qualify, the real estate in question has to be worth less than $65,500. Now, that doesn’t apply very much in California, but you can imagine that some people have vacant lots that have never been developed.
Similar to the small estate affidavit that we talked about last time for personal property, it’s not a court process; it’s a declaration. It’s basically an affidavit, which is a declaration under penalty of perjury in which the person who is entitled to that real estate says certain things. They submit these facts according to the law.
Jessica is going to walk us through what some of the particular requirements for this procedure are.
Yes, this procedure does require a little bit more than the small estate affidavit that we talked about before. For this one, you do need to wait six months after the date of death. It was only forty days for personal property, so that’s a significantly longer waiting period. There also needs to be an inventory and appraisal completed by a probate referee, which means that the probate referee is saying that the appraised value of the property is less than $61,500.
And just for you fans at home, a probate referee is an appraiser who’s been approved by the probate court. The court has a list of people who are approved to be probate referees. You don’t just randomly hire an appraiser; you have to use a court-approved probate referee.
Yes, good point, thank you. If there is a will, a copy must also be attached to this affidavit. All of that together is filed with the court. Once the clerk receives, reviews, and ensures it’s complete, they return a certified copy of the affidavit. That needs to be recorded with the county recorder.
It’s kind of like when we’re saying that the trustee has changed in terms of ownership of a piece of real estate. We record an affidavit by the new trustee that says, “Now I’m the trustee, and I own this property.” It’s very similar. Once the clerk approves it, you record it. Now, all the world knows that the next in line owns this property.
That’s for property—again, to reiterate—when the property in question is worth less than $61,500.
There’s a second procedure that is similar but a little more complicated—when the property in question is worth more than $61,500. However, we are still limited to the probate limit, which is $184,500.
As you can imagine, you could have a piece of real estate worth $184,500, and you still qualify for this second procedure we’re going to talk about as long as there’s nothing else in the probate estate.
But if you have a bank account, an investment account, jewelry, or whatever you have—a car—and all those things add up to more than $184,500, we can’t use this second procedure.
If you’re under that limit but still above the $61,500 real estate limit, you can use the next procedure that Jessica will describe.
This second procedure is called a petition determining succession to property. It’s a bit more complicated than we just discussed because it is an actual petition. The affidavit ended with the court clerk saying this petition would actually go before a judge.
You’re filing a petition saying that you have this property worth more than $61,500, but everything in the estate is less than the probate threshold of $184,500 and the person filing it must be entitled to that property.
This also requires an inventory and appraisal by the probate referee. It also requires notice to potential heirs and beneficiaries and an actual hearing. If everything looks right at that hearing, the judge will sign an order saying this property is going to this person or these people.
It’s only one petition, so it is much quicker than a probate. But it is a court process.
Jessica, in this petition, we are only talking about real estate. If there happens to be a bank account or some other personal property, would we get that through a small estate affidavit?
Yes, that’s correct.
So, those are a couple of quicker, easier processes that we can go through, even if there’s real estate in the decedent’s estate, as long as it’s of small value. Of course, it’s not that common, and it probably won’t cover our personal residence.
I can’t imagine anywhere in California where you can have a home to live in for $61,500. But there are many clients who have undeveloped land in more remote rural areas, and this would be nice—this would be a good process for them.
Hopefully, you got a lot out of that. Our next episode— and we’re excited to talk about this—is coming next year in 2025, and there will be a change in the law concerning probate and our personal residence. There will be a big carve-out, and we will talk about it because it’s exciting and interesting, and I’m looking forward to seeing how it works.
Thank you, Jessica, and thank you all for watching. We hope you got a lot out of this, and we look forward to connecting with you next time.
Resources Related to This Episode:
- Absolute Trust Talk Episode 155: Spousal Property Petitions: An Easier Alternative to Probate https://absolutetrustcounsel.com/155-spousal-property-petitions-an-easier-alternative-to-probate/
- Absolute Trust Talk Episode 154: Unlocking Assets Without Probate: The Benefits of Using a Small Estate Affidavit https://absolutetrustcounsel.com/154-unlocking-assets-without-probate-the-benefits-of-using-a-small-estate-affidavit/
- Absolute Trust Talk Episode 143: Can You Avoid Probate without a Trust? https://absolutetrustcounsel.com/143-can-you-avoid-probate-without-a-trust/
- A Will is Not Enough – Securing Your Legacy with Estate Planning Life can change in an instant. A will is not enough to be prepared. Get free access to our actionable E-book Guidebook #1 and start protecting your legacy today. https://absolutetrustcounsel.com/guidebooks/
- Learn how to comfortably define gray areas and assess your own unique needs to effortlessly build a secure future now. Check out Guidebook #2, Estate Planning Beyond the Basics, here > https://absolutetrustcounsel.com/guidebooks/
- Get our free introductory guide to the most used estate planning tool, family trusts, and understand how we plan to help protect your family. Guidebook #3: https://absolutetrustcounsel.com/guidebooks/
- Absolute Trust Counsel would love to offer access to our Incapacity Planning resource page: https://AbsoluteTrustCounsel.com/Incapacity-Planning/. We’ve collected our top planning information all in one place so listeners can find videos, guidebooks, blog posts, and a host of information with tips and strategies on implementing, planning, and protecting themselves and their loved ones.
- We’re pleased to provide a library of e-books to address common estate planning questions and concerns in practical, easy-to-understand language. https://AbsoluteTrustCounsel.com/Resources/.
- ASK KIRSTEN: If you’d like Kirsten to answer your question on the air, please email her at Info@AbsoluteTrustCounsel.com.
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