Huntington Beach, California Attorney, Mark W. Bidwell

Options to Post Death Transfer Real Property in California

The post death transfer of real property is by either planning ahead or letting the laws of California take their course. Examples of planning are; trusts, joint ownership, life time transfers and transfer on death deeds. No planning relies on the laws of intestacy and probate administration.

Intestacy law identifies who is the next of kin. The surviving spouse is the default next of kin and If there is no surviving spouse, then the children of the deceased inherit. If there is no spouse or children, then parents inherit or if no parents survive, brothers and sisters inherit and so on until the nearest living relative is found. The intestacy laws follow what most people would do if they planned.

Probate administration transfers occur under the supervision of the probate court. The problem is the transfer of real property in probate court requires court hearings, takes time and is expensive.  But these are not problems for the decedent, but for the decedent’s heirs.

If an owner of real property is concerned about who will inherit the real property or the cost and time of the post death transfer, planning is needed. Most plans are not complete plans. For example, a will is not a complete plan. It does state who will inherit, but a will does not avoid probate administration.

Joint ownership of real property and transfer on death deeds can be complete plans if the intended heir does not predecease the owner. But if the intended heir predeceases, joint ownership and a transfer on death deed are as if the real property owner did no planning.  

A gift is a complete plan. But the gift is in effect the abdication of any responsibility and the surrender of control of the real property. Life time gifts also have unfavorable tax consequences when compared to post death transfers of real property. 

A complete plan is trust. A trust identifies heirs, avoids probate and provides for contingencies if the original plan does not come through. A trust does not have unfavorable tax consequences and can be changed.  

More Informaiton on the No Plan Option

Affidavit real property of small value less than $50,000

California law has a shortcut, or expedited probate procedure for real property less than $50,000 in value known as “Affidavit Real Property of Small Value.”

This procedure is primarily available for timeshare estates and land away from the coast. The $50,000 exemption can be used even if the decedent owned other real property, provided the other real property did not go through probate.

Requirements are; at least six months have passed from date of death, there is no other probate action  and all debts of the decedent have been paid.

Pick-up Tool

Real property held in joint tenancy or a revocable trust is not included in the value of a probate estate. Succession is a good tool to pick up the lots of land, timeshares, vacation homes, and houses in rural areas that were omitted or overlooked in the decedent’s estate planning.

Succession to Real Property Valued Less Than $150,000

The opportunity for reduced probate administration procedures and cost is determined by the value of the real property. The value of real property is determined by an independent third party, the probate referee. To determine if real property is eligible for small estate administration an appraisal by a probate referee is needed. A probate referee is a real estate appraiser who is qualified to submit his or her appraisals to the probate court.

Property appraised at less than $150,000 is collected and transferred by court order. A petition is prepared, a hearing date is scheduled and heirs are notified. The client will have legal representation at the hearing. After the hearing the court order is filed with the county recorder. The filed court order allows for a subsequent quit claim deed to change ownership on the public record. The quit claim deed transfers real property from the decedent to the heirs.

Probate

Real property transferred by Will or Intestacy is by Probate. Probate is the administration under court supervision of a decedent’s estate as directed in his or her Will or by the laws of intestacy.

The process requires at a minimum two court hearings and three court orders. We cover Southern California Counties of Los Angeles, Orange, San Bernardino, Riverside and San Diego.

We recommend using the Independent Administration of Estates Act (the “IAE Act”), Probate Code §§ 10400 et seq. The act allows for sale of real property without a court order. Saving valuable time.

Major procedures in the probate process are:

• File petition with the Probate Court in the county where the decedent lived.
• Provide notice to all heirs and all persons named in the Will of the petition.
• Publish in local newspaper notice of petition
• Attend court hearing and obtain letters of authority
• Marshall the assets.
• Prepare inventory and appraisal
• Notice third party creditors, pay or deny creditor's claims and if necessary sell assets of the estate.
• File petition for hearing on settlement of accounts, approval of all actions, payment of compensation and court order to close probate.
• File ex-parte petition for final discharge and order to close probate