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September 20, 2012

Bradley Liggett: The Small Estates Affidavit explained

by Bradley Liggett, Attorney and Counselor at Law
Beach House

Republished with permission from Bradley Liggett’s excellent Estate Planning blog over at www.sloestateplanning.com.  

Normally, when a person passes away without setting up a trust, their property is subject to the probate process, wherein an executor is appointed by a court and the court oversees the administration and distribution of the probate estate. However, certain items of property are not included in the probate estate and can be transferred without probate. These items are listed in Probate Code Section 13050 and are discussed in my previous blog post. Probate can also be avoided if the deceased person’s non-exempt property is worth $150,000 or less.

There are three methods that property can be collected without having to initiate a formal probate. First, you can create a Small Estates Affidavit. Second, you can file a Petition to Determine Succession to Real and Personal Property. Third, you can create an Affidavit Regarding Property of Small Value.

Today, I’ll be discussing the Small Estates Affidavit. Next month, I’ll be discussing the other two methods.

An affidavit is a written, sworn statement that must be witnessed by a notary public. To be legally valid, the affidavit must contain certain statements about the deceased person, his property and the person signing the affidavit. For this reason, the affidavit should be drafted by an estate planning attorney. You must wait until 40 days have passed since the death of the decedent before signing the affidavit.

A Small Estates Affidavit can only be used to collect personal property (tangible items, money, vehicles, bank accounts). Thus, it cannot be used to collect real property that the decedent owned.

Once the affidavit is completed and signed, you deliver a copy of the affidavit to the person who holds the deceased person’s property. For example, if the deceased person had a bank account that you are legally entitled to inherit, you would give the bank a copy of the affidavit. When the person holding the property receives the affidavit, they must comply with the request to hand over the property within a reasonable time. If they do not, you can file an action to compel them to deliver the property and they will be liable for attorney’s fees for the action to compel delivery. As a practical matter, most companies are familiar with the affidavit procedure and will happily comply. Occasionally, it is necessary for the attorney advising the client to “educate” the property holder as to California law.

If you elect to use the Small Estates Affidavit instead of a formal probate, you should be aware that, if the decedent had debts, you are technically liable for those debts. However, you are only liable up to the amount of property you received from the deceased person. Also, as a practical matter, it is difficult unlikely for creditors to come after you for the decedent’s debts.

Check back next month for a discussion of the other methods of collecting property without probate, including discussion on how to collect real property.

 

Mr. Liggett focuses his legal practice on assisting his clients in creating an estate plan tailored to their individual circumstances and wishes. Contact him with your questions by email at brad@sloestateplanning.com or by phone at 805.203.0530.

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