Question on affidavit procedure Probate in california

[paulsiu]

What is the name of your state (only U.S. law)? CA

I have a general question about probate in California. The person is single with several kids. California probate attorney fee is high, so the goal would be to avoid probate. The person does not own real estate.

California allows "affidavit procedure" for small estates under $150K. One way to avoid probate would be to use TOD/POD to move bank account, IRA, brokerage account to the kids upon death. This would leave an estate that's under $150K.

What exactly is the process for affidavit procedure? The CA site indicate that there is a wait of 40 days. I have a few questions:

1. Is the Affidavit procedure only applicable if there is a will?
2. If there is no will, it is said that the closest relative will be contacted to become the executor, which would be one of the kids. How would an executor be assigned?
3. The person has no debt. However, there will likely be outstanding utilities to be paid, funeral fees, etc. Since asset is likely to be frozen for at least 40 days, how would that work. Does the kids pay the funeral out of pocket and the get reimbursement from the estate?
4. How would stuff like funiture be appraised? Will an appraiser need be hired?
5. Wouldn't it be easier to just create a simple will that said which stuff will go to whom to move the under $150K portion?

Paul

 

[anteater]

How well do the kids play nicely with each other? Let's assume that all the financial accounts are taken care of through beneficiary designations, TOD, POD, etc. Can the kids work without squabbling in order to pay the debts and final expenses?

1. Is the Affidavit procedure only applicable if there is a will?

It is my understanding that the affidavit can be used if there is a will or if the deceased died intestate.

2. If there is no will, it is said that the closest relative will be contacted to become the executor, which would be one of the kids. How would an executor be assigned?

I'm not sure who you think will be doing the contacting. But, if there is no surviving spouse, each of the kids would have an equal right to request to be named executor. Since appointment of an executor implies probate, someone would apply to open probate and request appointment.

3. The person has no debt. However, there will likely be outstanding utilities to be paid, funeral fees, etc. Since asset is likely to be frozen for at least 40 days, how would that work. Does the kids pay the funeral out of pocket and the get reimbursement from the estate?

Generally, yes. Although many creditors are willing to wait a few months to be paid.

4. How would stuff like funiture be appraised? Will an appraiser need be hired?

Well, what are we talking about? Antiques or just the ordinary, every day furniture? Heck, if the kids are capable of playing nicely and all the debts/expenses are taken care of, they can just divvy it up.

5. Wouldn't it be easier to just create a simple will that said which stuff will go to whom to move the under $150K portion?

Sorry, but I don't understand what you are getting at with this one.

 

[paulsiu]

Hi,

Thank you for the reply. The children do work together well so there is no issue.

The question about contacting is because it's not clear what happens after the death of the person. It was not clear that the children can petition the court to become the executor or if that would be a lot of problem if they were at a distant location from the parent. Would they for example have to fly into CA. Would there be additional delays and additional procedure due to a lack of Will.

The question about appraisal was asked because the state indicate the estate needed to be 150K or less to qualify for the reduce probate procedure, so would the state demand that all of the stuff be appraised? In general, there is no antique and it's just regular stuff.

Thanks.

Paul

 

[anteater]

The question about contacting is because it's not clear what happens after the death of the person. It was not clear that the children can petition the court to become the executor or if that would be a lot of problem if they were at a distant location from the parent. Would they for example have to fly into CA. Would there be additional delays and additional procedure due to a lack of Will.

The state does not really care whether the deceased's property is taken care of or not. It provides the framework for doing so, but does not initiate anything. That is left up to those with some interest in the property.

It might be possible to just retain an attorney and allow the attorney to handle the process. But, if one of the kids desires to administer the probate estate, then, yes, they will likely have to spend some time in California.

I'm not familiar enough with CA probate to say whether the administration process would be more complicated if there is no will. It is possible that there would be more court involvement and oversight for an intestate administration.

The question about appraisal was asked because the state indicate the estate needed to be 150K or less to qualify for the reduce probate procedure, so would the state demand that all of the stuff be appraised? In general, there is no antique and it's just regular stuff.

Well,the primary purpose of the small estate affidavit is to have something to hand to financial institutions and other third parties that may hold the deceased's property that ensures them that the affiant is authorized to take possession of the property. And, if you do some reading about it, use of the affidavit really pretty much works on the "honor system." (Which is one reason - besides ignorance - that some financial institutions get the shakes about accepting affidavits.)

You mentioned in the first post using beneficiary designations of some sort or another for the financial assets. If all that remains after that is tangible personal property that does not have a title and all the kids can amicably agree on what to do with that remaining property, there isn't a reason to even do an affidavit.

 

[paulsiu]

Hi anteater

Thank you again for your reply. I was under the impression that the probate was mandated by the state. I thought the idea was that when someone dies, probate would have to be established so that creditors can get their money. What you are saying is if all of the title assets are TOD/POD to the beneficiaries and all of the bills are paid off, then the state doesn't even need to be involved at all? The beneficiaries can just divide up the remaining assets themselves?

Paul

 

[anteater]

Hi anteater

Thank you again for your reply. I was under the impression that the probate was mandated by the state. I thought the idea was that when someone dies, probate would have to be established so that creditors can get their money. What you are saying is if all of the title assets are TOD/POD to the beneficiaries and all of the bills are paid off, then the state doesn't even need to be involved at all? The beneficiaries can just divide up the remaining assets themselves?

Paul

That's about the size of it. There isn't some office tucked away that cross-references death certificates with probate cases opened.

Legitimate creditors want to get paid. They don't really care where the payment is coming from.

If creditor claims are satisfied in some manner and assets are transferred via non-probate means and the heirs/beneficiaries can agree on what to do with non-titled tangible personal property, then there is no reason or requirement that probate be opened.


(Although, one thing that the probate statutes do provide is to limit the time period in which creditors may present claims against the deceased's assets. While I would say that it is not common, there is always the possibility that a legitimate creditor suddenly appears a year or two later. If that happens, the heirs/beneficiaries have to scramble to find a solution. If probate is opened and the proper notices are made, such a creditor would generally be out of luck.)

 

[paulsiu]

Thanks again. Funny you should mentioned creditors appearing out of nowhere. Decades ago, when my father passed away, some bill collector did show up trying to collect for some dental services a year or two later. I vaguely recalled Dad had grumbled about some horrible dentist (they drill the wrong teeth or something), but thought nothing of it at the time. Perhaps, there was a dispute with the bill. For whatever reason, we didn't know about the bill.

In this case, we just wrote "person deceased - estate closed" and return it and was not bothered by the collector again. I don't even know if probate was opened properly or not, but perhaps it would be too much of an effort to collect $100.

Do these creditor issue pop up a lot?

Paul