small estate affidavit question

[sierraray]

I am the executor of my mom's estate in California there has been no probate proceedings by a court. but her will was filed in the court.
She has a IRA and I was told I can use a Small Estate Affidavit to claim the money in my name. My question is can I claim the money then distribute it to the other heirs for do each of the heirs need to sign the affidavit and have the bank distribute the funds. The problem is the heirs resided in different states,

 

[adjusterjack]

There are significant tax issues with an inherited IRA.

@Taxing Matters or one of our other tax pros will provide some advice for you.

 

[zddoodah]

I am the executor of my mom's estate in California there has been no probate proceedings by a court

Then you're not the executor.

I suspect what you mean is that your mother's will nominates you to serve as executor. Correct?

but her will was filed in the court.

I assume you're referring to the requirement under Probate Code section 8200(a)(1) that a custodian of a will deliver the will to the court clerk. Correct?

She has a IRA and I was told I can use a Small Estate Affidavit to claim the money in my name.

Told by whom? Have you contacted the company that administers the IRA to find out if your mother named a pay-on-death beneficiary? If not, you should.

My question is can I claim the money then distribute it to the other heirs for do each of the heirs need to sign the affidavit and have the bank distribute the funds.

You need to contact the company that administers the IRA. The procedure for collection of personal property of a "small estate" (i.e., an estate whose value does not exceed $166,250) is outlined in Chapter 3 of Part 1 of Division 8 of the Probate Code. The contents of the affidavit are covered in section 13101. The affiant certifies that he/she is either the successor of the decedent (as defined in section 13006) or is authorized under section 13051 to act on behalf of the successor of the decedent. Companies that are accustomed to these situations typically have their own form affidavits and procedures that they expect you to follow.

As far as what becomes of the money, if there is a pay-on-death beneficiary, the money belongs to that person and is not part of the estate that is subject to distribution pursuant to the will. If there is no beneficiary, then the money is part of the estate to be distributed pursuant to the will.

How much money is in the IRA?

The problem is the heirs resided in different states

Why do you consider that to be a problem?

 

[sierraray]

Then you're not the executor.

I suspect what you mean is that your mother's will nominates you to serve as executor. Correct?




I assume you're referring to the requirement under Probate Code section 8200(a)(1) that a custodian of a will deliver the will to the court clerk. Correct?




Told by whom? Have you contacted the company that administers the IRA to find out if your mother named a pay-on-death beneficiary? If not, you should.




You need to contact the company that administers the IRA. The procedure for collection of personal property of a "small estate" (i.e., an estate whose value does not exceed $166,250) is outlined in Chapter 3 of Part 1 of Division 8 of the Probate Code. The contents of the affidavit are covered in section 13101. The affiant certifies that he/she is either the successor of the decedent (as defined in section 13006) or is authorized under section 13051 to act on behalf of the successor of the decedent. Companies that are accustomed to these situations typically have their own form affidavits and procedures that they expect you to follow.

As far as what becomes of the money, if there is a pay-on-death beneficiary, the money belongs to that person and is not part of the estate that is subject to distribution pursuant to the will. If there is no beneficiary, then the money is part of the estate to be distributed pursuant to the will.

How much money is in the IRA?




Why do you consider that to be a problem?

 

[sierraray]

Yes, I was nominated as executor in the will but not by the court as there was not probate. The custodian of the will filled it with the court.

The Ira held is by Chase Bank who I have contacted, the Ira is worth $12000.00 and there was no beneficiary named so the money would go to the estate. Chase told me they could send a check made out the "the estate of my mom" but when I inquired about cashing it to distribute the funds, they said I would need an Estate checking account, which they cannot open without a letter of testamentary. That would require the court and probate.

When I asked about a small estate affidavit that said they would honor that and make the check payable to me, but I don't know if I can legally do that because there are 5 heirs with 3 heirs getting a 1/4 of the Ira and 2 heirs getting an 1/8 each. They sent me their form for a small estate affidavit, and it has a place to list all successors, their SSN's and signatures.
We all live far from each other, and it would be difficult to get each signature and have them notarized by a notary

 

[adjusterjack]

Did your Mom own a home, a car, personal property, other money accounts that weren't TOD?

You might not be able to use the small estate affidavit.

And, as I said earlier, there are tax implications. If you do use the small estate affidavit and the IRA check is made out to you, it may be reported to the IRS as a distribution to you and you'll have to pay the income tax on it. Depending on your tax bracket could be as much as a third.

I suggest you get some professional advice so as to avoid a potentially costly mistake that DIY legal stuff often comes with.

 

[zddoodah]

We all live far from each other, and it would be difficult to get each signature and have them notarized by a notary

Why? You don't need to live in proximity. Each person can sign and have a copy notarized. You can then present all five signed affidavits to the bank. You might first want to discuss with the bank how it would handle that (i.e., if the bank is willing to cut five separate checks for 3x $3k and 2x $1,500.

Or...as noted, the affidavit may be executed by a person who "is authorized under Section 13051 of the California Probate Code to act on behalf of the [successors] of the decedent." You can obtain everyone else's authorization and check the second box under #8 on the small estate affidavit. Then you could divvy up the money.

I agree that you should also look into the income tax implications.