Wednesday, July 23, 2014

Decedents' Estates

In some cases, the Probate Court may oversee the division of property of someone who has died. This property is called a decedent's estate. The court supervises the assets and liabilities of people who die while they are residents of California or who leave property inside the state. This includes payment of the dead person's debts and the distribution of property to beneficiaries.

A dead person's estate will not be handled in probate court if there is a surviving spouse and the estate consists entirely of community property, or the dead person's property is held in joint tenancy with another person. Property transferred by gift before death, or placed into certain types of living trusts, also is not subject to probate. Whether the court must be involved depends on a number of things. These can include whether the person was married at the time of death, the type and value of the property the person owned and other things.

The estate can include personal property, such as money in the bank, jewelry or a car. It can also include real property, like the person's home. Often, the estate has both personal and real property, like the person's home. If the person has written a Will at the time of death, s/he is said to have died testate. If there was no Will, the person is said to have died intestate. The probate court watches over cases whether the person was testate or intestate.

If no Will exists, the property (estate) is divided among the person's heirs. In California, if the person has a spouse and/or children, the property first goes to them. If there is no spouse or children, the property goes to the person's next nearest relatives. In these cases, the court will appoint an administrator to manage and distribute the assets. This person is known as the executor.

If there was a Will, the court will make sure it is valid. The property is then distributed as directed by the Will. The person who oversees the estate under the terms of the Will is usually the person who is named to be the executor in the Will. If the Will does not name an executor or the person named in the Will does not want to serve in that way, the court will appoint someone to manage and distribute the assets.

The court may not need to be involved in the distribution of some property. Money in a bank account that names two people in joint tenancy will go directly to the other person. Money to be paid under an insurance policy is not usually part of an estate.

Sometimes a full probate proceeding is not needed. This would be true if the estate is not worth more than $150,000. Another example would be if everything goes to the person's spouse.

Within 30 days after a person dies, the person who has the decedent's will must file it with the superior court of the county in which the decedent lived.

There are several types of legal documents which can be filed with the court to start a probate estate court. These include:

  • A Petition for Probate of Will and for Letters Testamentary:

    This is used when the person died with a Will and the person that the decedent named to be the executor files the paperwork.

  • A Petition for Probate of Will and for Letters of Administration with Will Annexed:

    This is what is filed if the person had a Will but did not name an executor. It is also used when the person named in the Will is either deceased or does not want to act as the executor.

  • A Petition for Letters of Administration:

    This is filed if the person died without a Will. The person filing it is asking the court to have an administrator appointed to act as personal representative of the estate.

  • A Petition for Letters of Special Administration:

    A petition to authorize limited acts on behalf of the estate pending issuance of permanent letters, or to authorize permanent powers pending a will contest. This petition can be heard and granted ex parte if it is not contested.

The Probate Court issues Letters Testamentary or Letters of Administration naming the executor or administrator. During the administration of the estate, certified copies of these letters may be needed by banks, title companies, tax authorities, and others.

The law requires publication of a Notice of Petition to Administer Estate. This is a Notice to all creditors to file their claims against the estate. Creditors usually have four months to file their claims.

Probate cases tend to move slowly. Many detailed steps are required to ensure that all creditors are paid, all property is identified, all taxes are paid, and title to each asset is properly transferred. Typically, it takes four to six weeks after the decedent's death to appoint an executor or administrator. Even in the most routine probates, the law requires a minimum four-month wait after the Notice to Creditors has been issued before any action can be taken to distribute or close the estate. If the case requires the preparation and filing of a federal estate tax return, the process can be expected to take even longer. The financial circumstances of each decedent vary widely, so some estates may require much more court involvement than others, which can increase the time for an estate case to be completed.

The following summary proceedings are available as a substitute for estate administration:

Spousal Property Petitions

The petitioner must be either the surviving spouse (of a legal marriage) or the registered domestic partner of the decedent. If the spouse or registered domestic partner has also died, then his or her legally appointed personal representative may file. There is no limit to the value of the estate to use this type of petition; however, all property covered in the petition must be given outright to the surviving spouse or partner (either by will or intestate inheritance) and not to any other beneficiaries or a trust.

Petition for Succession to Real Property

If the gross value of the estate is under $150,000, you could file a Petition to Determine Succession to Real Property. This petition is filed 40 days after date of death by all persons who succeed to the property (are entitled to inherit) in the county of residence or where the property is located. These types of matters are set for hearing.

Small Estate Affidavit

If the estate consists solely of personal property (for example a bank account) and the gross value is under $150,000, you could complete an Affidavit (or Declaration) for Collection or Transfer of Personal Property under Probate Code §13100. - external link This is not a court procedure. It must be at least 40 days since the date of death. This cannot be used to transfer real property (land or buildings). All persons entitled to receive assets must sign the affidavit and the signatures must be notarized. For more information, see Probate Code §13100.

If the estate consists of real property worth $20,000 or less, you can complete an Affidavit re Real Property of Small Value. The affidavit may be filed six months after death in the county of residence. If the decedent was a non-resident of California, the affidavit may be filed in the county where the property is located. This is filed with the court; however, there is no hearing set.

Each of the above mentioned methods have both positive and negative aspects. The court cannot assist in determining which method is the best for your situation. Before you file a new case, it is strongly suggested that you consult with a probate attorney so that you are informed of your legal rights and the important legal issues in your case. The alternatives available to you in obtaining legal assistance include one or more of the following: