You’ll often hear that you need a trust to avoid probate. However, if the part of your estate that would otherwise be subjected to probate is small enough, there might very well be another way! Enter the Small Estate Affidavit.
Small California estates with personal property worth $166,250 or less may be settled without probate, by instead utilizing a small estate affidavit procedure under California Probate Code Section 13100.
What is a Small Estate Affidavit
In simple terms, a Small Estate Affidavit is basically a letter to the bank (or whoever holds the funds you are trying to distribute) instructing them to release those funds and to whom.
A Small Estate Affidavit can only be used for personal property, which refers to anything that isn’t real estate. This includes bank accounts, stocks, and money owed to the decedent (such as an insurance check). A Small Estate Affidavit is also known as an Affidavit for Collection of Personal Property for this reason. Technically it would also apply to household goods or things like jewelry, but I’m not going to focus on that here since those things are rarely held by a custodian.
How to Know if I Can Use a Small Estate Affidavit
Generally, you can use a small estate affidavit if all of the following are true: (1) The amount of funds you are trying to get are in total worth less than $166,250; (2) All other accounts or assets in the decedent’s name pass by operation of law to a surviving joint tenant or designated beneficiary (or there are none); (3) at least 40 days have elapsed since the death of the decedent, and (4) you are entitled to those funds.
How do you know if you are entitled to those funds? The person who signs the affidavit and submits it to the bank needs to be the “decedent’s successor;” in other words, they need to be any one of the following:
- the natural heir(s) to the decedent’s estate under state law,
- the beneficiary(ies) to the asset under the decedent’s Will, or
- the trustee of the decedent’s trust if there is a pour-over-will that dictates all assets pass into the trust.
Scenario: Your mother dies without a will. She did not have a surviving spouse and so you and your brother are her natural heirs under California intestate law. Mom’s estate consists of a checking account and savings account at a local credit union with a total balance of $127,000. She also has a retirement account worth over $300,000, but you and your brother were listed as beneficiaries.
In this scenario, since the retirement account had designated surviving beneficiaries, we only look at the credit union accounts. In this case, since $127,000 is below the $162,500 threshold amount, you and your brother can prepare and sign a small estate affidavit instructing the funds to be delivered to you and your brother and close the account.
Do I Need a Lawyer To Use a Small Estate Affidavit?…
You do not need a lawyer in order to use a small estate affidavit. In fact, there are a lot of sample forms online that a simple google search will provide. However, it can sometimes be difficult to determine on your own whether you can qualify to use a small estate affidavit, so you may want to get a competent attorney’s opinion first. You might also want their help completing the form or ask them to draft their own, if the facts don’t seem to align quite right with the form template.
Many local law libraries have self-help guidance on this topic as well as sample forms. For example, here is the form available through the Sacramento County Public Law Library.
Please note that you will need to provide a certified copy of the decedent’s death certificate to the bank along with the affidavit. If you don’t have one, you can order one online from the county registrar’s office where the decedent lived.
What to Do if the Bank Insists They Need “Letters”
It must be said that banks in general are used to transferring accounts to heirs or beneficiaries through a proper probate proceeding, and so may ask for “Letters.” “Letters” refers to the “Letters Testamentary” or “Letters of Administration” document that the Personal Representative receives in a formal probate which gives them the court-appointed authority to act on behalf of the estate. You won’t have “Letters” if there is no probate. If the bank teller, representative, or manager isn’t up on their estate administration laws, you’ll need to tell them that California law does not require a probate proceeding or the delivery of Letters for the transfer to be made in your case, and if you get nowhere, ask to speak to the legal or estate department.
All of the relevant probate laws are found in California Probate Code Section 13100. You can always print them out and hand copies to the bank.
You may want to hire an attorney to confirm that you are correct in your assessment and to fight this on your behalf. A lawyer will likely charge you their hourly rate to do so, so I’d make sure the amount of funds is worth it before you go this route. You don’t want to pay the attorney more than you are entitled to from the bank account.
