In “Closing a Loved One’s Bank Accounts” we explored ways an executor or authorized member of a loved one’s estate would close single-holder and jointly-held bank accounts, and the benefits of using “small estates” to avoid probate. As an estate’s executor, you’ll be tasked with closing a loved one’s bank accounts. If no will or estate plan exists, a court-appointed administrator, such as a spouse, partner, family member, or significant beneficiary of the estate could be required to close the deceased’s accounts. In some states, such as California, a “small estate” provides beneficiaries with the option of using a simplified probate procedure.
The definition of a small estate depends on each state’s law. In some states, a small estate consists of a few thousand dollars; whereas in California, a small estate is considered less than $166,250. In these instances, a beneficiary can prepare a sworn statement asserting they’re entitled to funds in a bank account under the deceased’s will or state law. A bank should release applicable funds upon receipt of the out-of-court affidavit.
- Contact the local probate court to determine if your situation qualifies as a small estate.
- Before speaking with your loved one’s banks, you’ll need to validate your authority to manage the deceased’s assets.
- Notarization of the small estate affidavit is often required to ensure its validity.
California’s Small Estate Affidavit Procedure
The California small estate affidavit procedure can provide a streamlined way to inherit property. While the typical process of probating a will is time consuming and expensive, the California Probate Code 13050 enables a beneficiary to inherit a small estate without going through the formal probate process.
To qualify for the California Small Estate Affidavit, the estate’s total value cannot exceed $166,250. Of note, the process is not used for transferring the title of real property; however, the value of real and personal property of your loved one is included in the estate’s value calculation.
Per the California Judicial Branch, use the simplified process for transferring personal property. First, figure out if the value of all the decedent’s property (the estate) is $166,250 or less. The below “Include” and “Do not include” lists are sourced from the California Courts.
- All real and personal property.
- All life insurance or retirement benefits that will be paid to the estate (but not any insurance or retirement benefits designated to be paid to some other person).
Do not include:
- Cars, boats or mobile homes.
- All real property outside of California.
- Property held in trust, including a living trust.
- Real or personal property that the person who died owned with someone else (joint tenancy).
- Property (community, quasi-community, or separate) that passed directly to the surviving spouse or domestic partner.
- Life insurance, death benefits or other assets not subject to probate that pass directly to the beneficiaries.
- Unpaid salary or other compensation up to $16,625 owed to the person who died.
- The debts or mortgages of the person who died. (You are not allowed to subtract the debts of the person who died.)
- Bank accounts that are owned by multiple persons, including the person who died.
The final total must not exceed $166,250 in order to qualify for the California small estate affidavit form.
How to Use the Affidavit Process
Steps 1-5 outlined below are from the California Courts.
1. Fill out the Affidavit.
- Many banks and other institutions have their own affidavit. So, check with them first and ask for one. Your court’s self-help center may also have this form or click for a sample form you may be able to use.
- You can list all assets in one affidavit. Or you can do one affidavit for each asset.
2. Attach (to the affidavit):
- A certified copy of the death certificate of the person who died.
- Proof that the person who died owned the property (like a bank passbook, storage receipt, stock certificate).
- Proof of your identity (like a driver’s license or passport)
- An Inventory and Appraisal (form DE-160) of all real property owned by the deceased in California. This form must be signed by a probate referee. If there is no real property, then you do not need this form.
3. Have the affidavit notarized. Legally, you are not required to have the affidavit notarized BUT many institutions will ask you to, so it is a good idea to notarize it before you try to use it to transfer the property.
4. If there are other people entitled to inherit the property, they MUST also sign the affidavit. This shows you all agree that the property listed on your affidavit can be transferred to you.
5. To have the property transferred to you, give the affidavit to the person, company, or bank that currently has the property.
NOTE: Make sure the case is not already in probate court. If it is, you cannot use the affidavit process unless the personal representative of the estate agrees in writing to let you do so.
The small estate affidavit provides a simplified probate procedure that enables you to obtain access to your loved one’s property quickly. Regardless if an estate is large or small, HereToday always recommends you have an estate plan in place.
Disclaimer. HereToday is not a legal service. This content should not be taken as legal advice. Before drafting any legal document, please consult an attorney.