BILL ANALYSIS                                                                                                                                                                                                    Ó






                             SENATE JUDICIARY COMMITTEE
                             Senator Noreen Evans, Chair
                              2011-2012 Regular Session


          AB 1305 (Huber)
          As Amended May 31, 2011
          Hearing Date: June 7, 2011
          Fiscal: No
          Urgency: No
          TW   
                    

                                        SUBJECT
                                           
             Decedents' Estates:  Summary Disposition of Smaller Estates

                                      DESCRIPTION  

          This bill would increase the monetary value of small estates 
          consisting of real and personal property that may be summarily 
          disposed of using simplified non-probate procedures such as the 
          filing of an affidavit and a petition for a court order of 
          succession to real property.  This bill would:
                 increase the value of specified personal property that 
               the successor to a decedent may collect without letters of 
               administration or waiting for probate of a will from 
               $100,000 to $150,000;
                 increase the value of an item of real property that a 
               person may receive as successor to a decedent by using an 
               affidavit procedure, from $20,000 to $50,000;
                 increase the value of a small estate from $100,000 to 
               $150,000, where a person may petition the court to 
               determine succession to property; 
                 increase from $5,000 to $15,000 the amount of salary or 
               other compensation to be excluded from the determination of 
               the value of the decedent's estate; and 
                 increase from $5,000 to $15,000 the amount of salary or 
               compensation owed the decedent that a surviving spouse may 
               collect by affidavit.

                                      BACKGROUND  

          The Probate Code provides several procedures by which some 
          estates may be disposed of summarily or by affidavit to expedite 
          the settlement of these smaller estates and avoid unnecessary 
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          expenses related to court supervision.  Some of the procedures 
          may be undertaken by a person to whom the decedent devised the 
          property directly or by a personal representative of the 
          decedent who permits a direct heir to specified property to 
          collect and transfer the property outside of probate.  The value 
          limits designated for some procedures were amended last in 1996, 
          while others were amended last in 2004.

          AB 2267 (Huff, 2006) contained provisions identical to this bill 
          and failed passage in the Assembly Committee on Judiciary 
          because, at that time, concern was raised that an increase on 
          the threshold limits on estates that could be transferred 
          outside of probate would increase the workload for public 
          guardians.  SB 553 (Aanestad, 2007), supported by California 
          Association of Public Administrators, Public Guardians, and 
          Public Conservators, was substantially similar to this bill and 
          was amended in this committee to decrease the value amounts of 
          property to the same limits as the current version of this bill 
          that could be transferred outside of probate.  SB 553 passed out 
          of this committee but was gutted and amended to relate to an 
          unrelated subject.

          This bill, sponsored by the Trusts and Estates Section of the 
          State Bar of California, would increase the monetary value of 
          small estates consisting of real and personal property that may 
          be summarily disposed of using simplified non-probate procedures 
          in order to recognize current property values.  

                                CHANGES TO EXISTING LAW
           
          1.    Existing law  provides a list of property that is excluded 
            from the determination of a decedent's property or estate.  
            The property excluded are:  (1) property held by a decedent as 
            a joint tenant; (2) property in which a decedent held a 
            terminable life estate; (3) property passing to a surviving 
            spouse without court administration; (4) multi-party accounts, 
            whether or not community property, as long as moneys on 
            deposit are payable on death to the payee; (5) specified 
            registered vehicles, specified registered vessels or boats and 
            registered manufactured homes, mobilehomes, commercial 
            coaches, truck campers or floating homes; (6) any wages due 
            for military services rendered; and (7) any wages or 
            compensation due to the decedent in an amount not exceeding 
            $5,000.  (Prob. Code Sec. 13050.)
          
             This bill  would raise the limit on the excludable wages or 
                                                                      



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            compensation due to the decedent from $5,000 to $15,000.

             This bill  would increase the limit on wages or compensation 
            due to a decedent that a surviving spouse may collect without 
            letters of administration or waiting for probate of a will 
            from $5,000 to $15,000.

          2.    Existing law  authorizes a surviving spouse or guardian or 
            conservator of the estate of the surviving spouse, without 
            procuring letters of administration or awaiting probate of the 
            will, to collect salary or other compensation owed by an 
            employer for personal services of the deceased spouse, 
            including compensation for unused vacation, not in excess of 
            $5,000 net.

             This bill  would increase the limit on wages or compensation 
            due to a decedent that a surviving spouse may collect without 
            letters of administration or waiting for probate of a will 
            from $5,000 to $15,000.

          3.    Existing law  provides an affidavit procedure by which a 
            successor to a decedent's estate that does not exceed $100,000 
            of the gross value of personal and real property, unless 
            otherwise excluded, may collect, receive, or have transferred 
            to the successor any particular item of property that belongs 
            to or is due to the decedent.  (Prob. Code Secs. 13100 and 
            13101.)

             This bill  would increase this limit on the gross value of a 
            decedent's property, unless otherwise excluded, from $100,000 
            to $150,000.

          4.    Existing law  provides that if, unless otherwise excluded, a 
            decedent owned real property in the state and the gross value 
            of both real and personal property of the decedent in this 
            state is not greater than $100,000, the successor of the 
            decedent to a particular interest in real property may seek a 
            court determination of his or her succession to the real 
            property interest without obtaining letters of administration 
            or waiting for probate of the decedent's will.  (Prob. Code 
            Secs. 13151, 13152, and 13154.)  

             This bill  would make this procedure available to successors in 
            interest to real property of a decedent where the gross value 
            of both real and personal property of the decedent in this 
            state does not exceed $150,000, rather than $100,000.
                                                                      



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          5.    Existing law  provides a procedure by which a successor to a 
            decedent's real property in California valued at no greater 
            than $20,000 may, under specified conditions, petition the 
            court to transfer the real property to the successor of the 
            decedent.  This procedure involves the simple filing of a 
            Judicial Council form and an affidavit stating specified facts 
            and attaching an inventory and appraisal of the decedent's 
            real property in California, excluding property that is 
            excludable by statute.  (Prob. Code Sec. 13200.)

             This bill  would increase the value of the California real 
            property that may be transferred using this procedure from 
            $20,000 to $50,000.

          6.    Existing law  requires the public administrator to petition 
            the court for appointment as personal representative of a 
            decedent's estate if no person of higher priority has 
            petitioned for appointment and the total value of the 
            decedent's estate exceeds $100,000. (Prob. Code Sec. 7620.)

             This bill  would increase the total value of a decedent's 
            estate that would trigger the public administrator's petition 
            for appointment as personal representative of the estate to 
            greater than $150,000.

          7.    Existing law  authorizes a public administrator who has 
            taken possession or control of a decedent's property not 
            exceeding $100,000 (the limit stated in Probate Code Section 
            13100) to request the court on an ex parte application to 
            issue an order for the public administrator to summarily 
            dispose of the decedent's estate.  (Prob. Code Sec. 
            7660(a)(1).)

             This bill  would conform this provision to changes being made 
            to Section 13100, by increasing the size of the decedent's 
            estate for which summary disposition may be requested by the 
            public administrator from $100,000 to $150,000. 

          8.  Existing law  authorizes the public administrator, without 
            court authorization, to summarily dispose of a decedent's 
            estate if the total value of the property does not exceed 
            $30,000.  (Prob. Code Sec. 7660(a)(2).)
           
            This bill  would raise the limit for the public administrator's 
            authority to summarily dispose of the decedent's estate 
                                                                      



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            without court authorization from $30,000 to $50,000.

                                        COMMENT
           
          1.  Stated need for the bill  
          
          The author writes:
          
            The small estate administration limits have not been increased 
            for approximately 15 years.  Due to the 15 year window since 
            the last increase in estate limits, many small estates that 
            would have qualified to use the small estate provisions as 
            enacted no longer qualify to use these procedures.

            Over time, there has been an increase in real property and 
            other asset values, an increase in salaries, inflation, 
            increases in the costs and time delays involved in formal 
            probate administration, and increased burdens on the court 
            system.
          
          The Trusts and Estates Section of the State Bar of California 
          (TEXCOM), the sponsor of this bill, writes:
          
            AB 1305 seeks to raise the small estate limits to account for 
            inflation, the rise in asset values that occurs over time, 
            increases in the costs and time delays involved in formal 
            probate administration, and increased burdens on the court 
            system.
             
            These small estate provisions serve a valuable purpose by 
            allowing small estates to avoid formal probate administration. 
            These provisions allow heirs and beneficiaries of such small 
            estates to avoid the burdens and delays of formal probate 
            administration. These provisions also allow heirs and 
            beneficiaries to avoid costs which amount to a considerable 
            percentage of a small estate. They also reduce the burdens on 
            the judicial system and allow the courts to more efficiently 
            focus on matters requiring greater judicial oversight and 
            resources.  But again, inflation values and the fact that the 
            limits have not been increased in 15 years have made these 
            provisions unavailable for an increasing number of small 
            estates that historically would have qualified for the use of 
            these procedures. In originally enacting these provisions, the 
            Legislature sought to balance the need for judicial oversight 
            in formal probate administrations with the needs of judicial 
            economy and to avoid overburdening small estates with 
                                                                      



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            administrative expenses.  The Legislature has regularly 
            reemphasized the importance of maintaining this balance by 
            adjusting the applicable limits regularly over time.  TEXCOM 
            believes these limits should again be increased so these 
            statutes may . . . continue to serve the purpose for which 
            they were enacted.
          
          2.    Recent amendments to this bill decrease the property 
            threshold limits  

          When SB 553 (Aanestad, 2007) was heard in this committee in 
          2007, it was amended to decrease the threshold limits of real 
          and personal property that could be transferred outside of 
          probate.  In order to be consistent with this committee's prior 
          action, the author recently amended the bill to decrease the 
          threshold value of a decedent's real and personal property from 
          $200,000 to $150,000, and the threshold value of a decedent's 
          real property was lowered from $100,000 to $50,000.  The 
          requested lowered limits represent the current Bureau of Labor 
          Statistics Inflation amounts corresponding to each threshold 
          provision based on the year those limits were last modified.  
          Further, the Probate Code provisions authorizing a public 
          administrator or guardian to transfer a decedent's real and 
          personal property outside of probate were added to this bill.  
          Accordingly, this bill would raise the public administrator and 
          guardian threshold limits in accordance with SB 553.  

          3.  Transfers by simplified procedure:  preliminary exclusion of 
            property from decedent's estate

           This bill would increase the amount of wages or compensation due 
          to a decedent at the time of death that may be collected by a 
          spouse or that would be excluded for purposes of calculating the 
          "estate" of the decedent, from $5,000 to $15,000.  Existing law 
          provides a simplified procedure for the collection and 
          disposition of decedent's personal and real property under 
          certain conditions, either outside formal probate proceedings or 
          pending probate of a will.  (Prob. Code Secs. 13000 et seq. and 
          13600 et seq.)  The basis for the use of the simplified 
          procedure is the size of the estate.

          Prior to applying the limits on the size of the decedent's 
          estate for purposes of using the simplified procedures however, 
          a preliminary step must be taken, i.e., excluding specified 
          items of property.  The following items of property, enumerated 
          in Probate Code Section 13050, must be identified and excluded 
                                                                      



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          from the estate of the decedent: 

             (1) property held by the decedent as a joint tenant; 
            (2) property in which the decedent held a terminable life 
            estate; 
            (3) property passing to the surviving spouse without court 
            administration; 
            (4) multi-party accounts, whether or not community property, 
            as long as moneys on deposit are payable on death to a payee; 
            (5) specified registered vehicles, specified registered 
            vessels or boats and registered manufactured homes, 
            mobilehomes, commercial coaches, truck campers or floating 
            homes; 
            (6) wages due for military services rendered; and
            (7) wages or compensation due to the decedent in an amount not 
            exceeding $5,000. 

          This bill would make one change to this list by increasing the 
          amount of wages or compensation due to the decedent from $5,000 
          to $15,000.  The $5,000 limit was enacted in 1996.  This bill 
          would increase this amount by 300 percent, which may appear 
          dramatic but is arguably justified in light of high-salaried 
          employees who may leave small estates when they die.  By 
          increasing the wages or compensation limit, more middle income 
          families may be able to dispose of a decedent's property 
          summarily or through the simplified procedures identified in 
          this analysis.

          4.    Collection and disposition of property by affidavit or 
            court order of succession  

          This bill would increase the gross value of a decedent's 
          personal and real property, unless otherwise excluded, that may 
          be collected, received, or transferred to a successor outside of 
          probate proceedings.   Existing law provides an affidavit 
          procedure by which a successor to a decedent's estate that does 
          not exceed $100,000 of the gross value of personal and real 
          property, unless otherwise excluded, may collect, receive, or 
          have transferred to the successor any particular item of 
          property that belongs to or is due to the decedent.  (Prob. Code 
          Sec. 13100 et seq.)

          This bill would increase this limit from $100,000 to $150,000. 
          When first enacted in 1986, this limit was $30,000; it was then 
          raised to $60,000 in 1991, then to $100,000 in 1996.  According 
          to the Bureau of Labor Statistics Inflation Calculator, $100,000 
                                                                      



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          in 1996 has the same buying power as $142,426.39 in 2011.  Thus, 
          under this bill, excluding all of the property identified in 
          Comment 3 (Prob. Code Sec. 13050), if whatever is left in the 
          estate does not exceed $150,000, the affidavit and simplified 
          procedures for settling the estate would be available to the 
          successor of the decedent, without applying to the court for 
          letters of administration or waiting for the probate of a will.

            a.    Transfer or collection of personal property using the 
            affidavit procedure  

            Under Probate Code Section 13100, if the decedent's estate 
            satisfies the $100,000 upper limit and if 40 days have elapsed 
            since his or her death, the successor of the decedent may do 
            any of the following without procuring letters of 
            administration or awaiting probate of the will:

               (1) collect any particular item of property that is money 
               due to the decedent;
               (2) receive any particular item of tangible personal 
               property of the decedent; or
               (3) have any particular item of property that is evidence 
               of a debt (such as promissory note), interest, right, 
               security (such as stocks and bonds), or chose in action 
               belonging to the decedent transferred, whether or not 
               secured by a lien on real property.

            The transfer procedure calls for the furnishing of an 
            affidavit or a declaration under penalty of perjury to the 
            holder of the property stating specific information such as: 
            (1) name, date and place of death of the decedent (and a 
            certified copy of the death certificate attached); (2) that no 
            proceeding for administration of the decedent's estate is 
            pending or that the personal representative has consented in 
            writing to the payment, transfer or delivery of the personal 
            property to the affiant or declarant; (4) that 40 days have 
            elapsed since the decedent's date of death (with death 
            certificate attached); (5) that the decedent's gross estate 
            does not exceed $100,000; (6) a description of the property to 
            be transferred or paid; and (7) the name of the successor to 
            the decedent's interest or that the affiant is authorized to 
            act on behalf of the successor with respect to successor's 
            interest in the property.  (Prob. Code Sec. 13101.)  The 
            procedure further specifies the evidence that must be 
            presented to show the decedent's ownership of the interest 
            (Prob. Code Sec. 13102), requires a copy of the inventory and 
                                                                      



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            appraisal of real property, if the decedent's estate includes 
            real property (Prob. Code Sec. 13103), and the proof of 
            identity of the person executing the affidavit that must be 
            provided (Prob. Code Sec. 13104).  

            This bill would raise the estate size limit to $150,000 for 
            this affidavit procedure to be available to a successor to a 
            decedent's specified personal property.  The decedent's other 
            property, excluded from the estate under Probate Code Section 
            13050, may be the subject of probate proceedings (although 
            some may be disposed of summarily under other provisions of 
            the Probate Code).

            b.   Transfer of real property by court order after petition
             
            Under Probate Code Section 13151, where the gross value of a 
            decedent's personal and real property in this state does not 
            exceed $100,000, exclusive of those items enumerated in 
            Probate Code Section 13050, and 40 days have elapsed after the 
            date of death of the decedent, the successor of a decedent to 
            an interest in a particular item of real property may, without 
            procuring letters of administration or awaiting probate of the 
            decedent's will, file a petition with the superior court in 
            the county in which the decedent's estate may be administered, 
            for an order determining that petitioner has succeeded to the 
            real property and that administration of the estate is 
            unnecessary.  This procedure is available only if no 
            proceeding is being conducted or has been conducted in the 
            state for the administration of the decedent's estate.

            This bill would raise the Section 13151 limit of the 
            decedent's real and personal property holdings in the state 
            from $100,000 to $150,000.  Thus, the simplified petition 
            procedure would be available to the successor of a decedent 
            who left all of the excluded property under Section 13050 and 
            a townhome worth $150,000, or an unimproved lot worth $100,000 
            and cash in the bank worth $50,000 (which is not in a 
            multi-party pay-on-death account).  The successor may simply 
            file a petition to the court for an order determining that the 
            petitioner has succeeded to the decedent's interest in the 
            townhome or the unimproved lot.  Under current law, neither 
            real property could transfer by petition to the court under 
            Section 13151.  A proceeding for administration of the 
            decedent's estate would have to be commenced.  

            c.    Transfer of real property of small value by affidavit 
                                                                      



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             Where the real property in the state owned by the decedent at 
            the time of death does not exceed $20,000, it has been at 
            least six months from the date of death, no proceeding for 
            administration of the estate is pending in California, and all 
            funeral expenses and other expenses of last illness and all 
            unsecured debts of the decedent have been paid, the decedent's 
            successor may serve an affidavit (in the form prescribed by 
            the Judicial Council) on the guardian or conservators of the 
            estate of the decedent at the time of the decedent's death and 
            request transfer of the real property to the successor.  The 
            contents of the affidavit (and accompanying attachments such 
            as death certificate copy) are specified in the statute, and a 
            certified copy of the affidavit may be recorded in the county 
            recorder's office where the real property is located, with the 
            decedent indexed as the grantor and the successor indexed as 
            the grantee.  (Prob. Code Sec. 13200.)

            In 1991, this statute authorized transfer of real property 
                                                                             valued at $10,000 through this procedure.  (SB 271 (Kopp, Ch. 
            1055, Stats. 1991).)  Five years later, this value was 
            increased to $20,000.  (AB 2146 (Rainey, Ch. 86, Stats. 
            1996).)  Now, fifteen years later, this bill would increase 
            the gross value of real property in the state that may be 
            transferred from decedent to successor in this manner from 
            $20,000 to $50,000.  

          5.    Public Administrators:  comparable adjustments in estate 
          size limits

           This bill would increase the value of real and personal property 
          of a decedent that may be disposed of by a public administrator. 
           If a public employee or officer knows of property of a decedent 
          that may be lost, injured, wasted, or misappropriated and that 
          property ought to be in the possession or control of the public 
          administrator, the officer or employee is obligated to inform 
          the public administrator.  The public administrator is 
          duty-bound, if no personal representative has been appointed for 
          the decedent or the decedent's estate, to take prompt possession 
          and control of property of the decedent, make a prompt search 
          for other property, deliver a will to the court if a will is 
          found, deliver instructions for disposition of the property if 
          such instruction is found, and otherwise dispose of property 
          that he or she has taken control of according to the laws of the 
          state.  (Prob. Code Sec. 7600 et seq.)  A public administrator 
          who takes possession of property under these provisions may 
                                                                      



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          issue a certification of that fact, and the certificate is 
          effective for 30 days.  During this time, the public 
          administrator may take possession of other property located in 
          financial institutions, government agencies, retirement fund 
          administrators, licensed securities dealers, and other holders 
          of property.  (Prob. Code Sec. 7603.)

          If, after collecting the decedent's property, the public 
          administrator determines that his or her appointment as personal 
          representative of the estate is proper, the public administrator 
          petitions the court for appointment.  (The public administrator 
          is the last in priority of those who may petition for 
          appointment, and is usually called upon to file such a petition 
          only when there is no heir or other qualified person.)  Once 
          appointed, the public administrator may summarily dispose of the 
          decedent's estate as follows:

          (1) If the estate does not exceed $30,000, the public 
          administrator may dispose of the decedent's property without 
          court authorization.  This bill would increase this estate size 
          limit that may be disposed of without court authorization to 
          $50,000.

          (2)  If the estate does not exceed $100,000 (as provided in 
          Probate Code Section 13100), the property may be disposed of 
          with court authorization.  This limit would be increased to 
          $150,000 under this bill because of the change to Section 13100 
          (see Comment 4.)

          If, after collecting decedent's property, the value of the 
          estate exceeds $100,000, the public administrator is required to 
          petition for appointment as personal representative of the 
          estate if a person with higher priority has not petitioned for 
          appointment.  This estate size limit would be increased to 
          $150,000 by this bill.  It should be noted that this limit would 
          be subject to the exclusions provided under Section 13050 
          (vehicles, motor homes, stocks and bonds, debts due to the 
          decedent, etc.) for purposes of determining whether or not 
          simplified procedures may be used for the disposition of the 
          property.  In all other respects, the rules governing the 
          administration of estates by personal representatives apply to 
          public administrators.  


          Support  :  None Known

                                                                      



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           Opposition  :  None Known

                                        HISTORY
           
           Source  :  Trusts and Estates Section of the State Bar of 
          California

           Related Pending Legislation  :  None Known

           Prior Legislation  :  See Background and Comment 4c.

           Prior Vote :

          Assembly Floor (Ayes 74, Noes 0)
          Assembly Committee on Judiciary (Ayes 10, Noes 0)

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