PERSONAL PROPERTY

A very common non-probate transfer is the use of affidavits to transfer personal property if the gross value of the decedent’s real and personal property in California does not exceed the $150,000 or $166,250 threshold amount and if 40 days have elapsed since the death of the decedent, the successor of the decedent may, without procuring letters of administration or awaiting probate of the will. This is a cumulative $150,000 or $166,250 of qualifying assets even if at different financial institutions. The valuation date is not the date of death but rather the date of the affidavit signing. This only works for personal property and does not work for real estate. Also, a Prob C §13100 declaration can often be used to get the items out of a safe deposit box.

There is no appraisal required. Also, no bond is required. There is no publication. The Court does not issue Letters. In fact, Prob C §13100 generally has absolutely no Court involvement whatsoever and is not filed in Court, unless someone commits fraud or in some other rare situations. It is simply a signed affidavit, under the penalty of perjury, declaring a number of items required by the probate code. Some financial institutions have their own small estate forms which they may ask you to use. The affidavit form for Riverside County can be found at http://www.riverside.courts.ca.gov/localfrms/ri-pr012.pdf. The affidavit form for San Bernardino County can be found at http://www.sb-court.org/Portals/0/Documents/PDF/Forms/SB-13100.pdf.

A key point with using Prob C §13100 small estate affidavits is that not all assets count toward the applicalble $150,000 or $166,250. Prob C §13050 specifically excludes items from the calculation, including:

1. Any vehicle registered under Division 3 (commencing with Section 4000) of the Vehicle Code or titled under Division 16.5 (commencing with Section 38000) of the Vehicle Code.
2. Any vessel numbered under Division 3.5 (commencing with Section 9840) of the Vehicle Code.
3. Any manufactured home, mobilehome, commercial coach, truck camper, or floating home registered under Part 2 (commencing with Section 18000) of Division 13 of the Health and Safety Code.
4. The value of the following property shall be excluded in determining the value of the decedent’s property in this state:

(1) Any amounts due to the decedent for services in the Armed Forces of the United States.

(2) The amount, not exceeding sixteen thousand six hundred twenty-five dollars ($16,625), as adjusted periodically in accordance with Section 890, of salary or other compensation, including compensation for unused vacation, owing to the decedent for personal services from any employment.

There are a number of potential disadvantages in using the summary procedure.

1. Possible Disagreement Among Decedent’s Successors in Interest. If the decedent died intestate and the assets are separate property, the successors could be a spouse or registered domestic partner and children from another marriage or relationship. All of the successors to the assets being transferred would be required to sign the affidavit. Serious problems could arise if these parties do not get along and cannot agree on who is entitled to what portion of the property and whether the property is community or separate property.
2. Decedent’s Liabilities. You must know the extent of the decedent’s liabilities, e.g., whether there is credit card debt or last illness expenses far in excess of the assets to be collected. A further consideration is that if all the assets collected are used to pay the decedent’s debts, the successor in interest may be paying more than the proportional share attributable to the asset than would have been assessed in a probate. In sum, when there are issues concerning substantial or unknown liabilities, use of probate administration may be more appropriate. If the decedent has significant debt issues, you should weigh the “benefit” of giving formal notice in a probate administration, and the time bar built into a Notice to Creditors, versus using the informal, summary procedure. .
3. Refusal to Accept. In addition, some property holders initially refuse to accept a Prob C §13100 affidavit or declaration. Sometimes transfer agents of small non-publicly traded securities, as well as small independent banks or brokerage houses, need to be persuaded to act in accordance with the law.