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
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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
(more)
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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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