Compliance Bulletin

Small Estate Exemption Limit Raised to $150,000
January 9, 2012

Under previous California laws an estate whose gross value is less than $100,000 may be administered outside of the formal probate process. Among other things, a successor to the decedent of a small estate may collect personal property (including funds in a bank account) through use of an affidavit or declaration. The small estate exception limit was last set 15 years ago and its purpose is to reduce the costs and time delays involved in formal probate administration. These costs could amount to a considerable percentage of the value of a small estate. Probate administration also has implications for the work load of the court system.

AB 1305, enacted last year and effective as of January 1 this year, raises the small estate exemption to $150,000 and adjusts other related thresholds as well [1]. Sections 13100 and 13101 of the Probate Code, which were amended by AB 1305 as to the exemption amount, set forth the procedure for the successor of a decedent to collect property, including money due the decedent. A successor means, as to a decedent who left a will, the sole beneficiary or all of the beneficiaries who succeeded to a particular item of the decedent’s property. A successor could be a trust that succeeds to the property under the will. If the decedent died intestate (without a will), the successor is the sole person or all of the persons who succeeded to the particular item of property of the decedent under the rules governing community property succession [2], intestate succession [3], or, if the law of another state or foreign nation governs succession to the particular item of property, then under the law of that state or foreign nation [4].

Under the new rules, if the gross value of the decedent’s real and personal property in California does not exceed $150,000 and if 40 days have elapsed since the death of the decedent, the successor may collect the property without first procuring letters of administration or awaiting probate of the will.

Banks should be familiar with this procedure, which is described here as reference. The successor is required to furnish the holder of the property with an affidavit or a declaration under penalty of perjury stating all of the following:

(1) The decedent’s name.
(2) The date and place of the decedent’s death.
(3) “At least 40 days have elapsed since the death of the decedent, as shown in a certified copy of the decedent’s death certificate attached to this affidavit or declaration.” [Must be attached].
(4) Either of the following, as appropriate:
(A) “No proceeding is now being or has been conducted in California for administration of the decedent’s estate.”
(B) “The decedent’s personal representative has consented in writing to the payment, transfer, or delivery to the affiant or declarant of the property described in the affidavit or declaration.” [Copy of the consent and the personal representative’s letters must be attached].
(5) “The current gross fair market value of the decedent’s real and personal property in California, excluding the property described in Section 13050 of the California Probate Code [5], does not exceed one hundred fifty thousand dollars ($150,000).”
(6) A description of the property of the decedent to be delivered.
(7) The name of the successor(s) to the described property.
(8) Either of the following, as appropriate:
(A) “The affiant or declarant is the successor of the decedent (as defined in Section 13006 of the California Probate Code) to the decedent’s interest in the described property.”
(B) “The affiant or declarant is authorized under Section 13051 of the California Probate Code [6]  to act on behalf of the successor of the decedent (as defined in Section 13006 of the California Probate Code) with respect to the decedent’s interest in the described property.”
(9) “No other person has a superior right to the interest of the decedent in the described property.”
(10) “The affiant or declarant requests that the described property be paid, delivered, or transferred to the affiant or declarant.”
(11) “The affiant or declarant affirms or declares under penalty of perjury under the laws of the State of California that the foregoing is true and correct.”

The quoted language is intended to be used verbatim, but can be modified as appropriate to reflect multiple successors.

As indicated above, AB 1305 became effective as of January 1, 2012. Under the guidance in Probate Code Section 3© [7]  pertaining to the operative date of a new law under the Probate Code, AB 1305 should be construed to apply where the decedent’s death occurred prior to the effective date if the other requirements are satisfied. The lead lobbyist for CBA on the bill is Kevin Gould.

  1. Here is the link to the text of AB 1305: http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_1301-1350/ab_1305_bill_2….
  2. The community property succession rules are set forth in Probate Code Section 6401.
  3. The intestate succession rules are set forth in Probate Code Section 6402.
  4. See Probate Code Section 13006.
  5. Probate Code Section 13050 describes interests in such property as joint tenancies, life interests, and P.O.D. accounts that terminate or transfer upon death, exempted items of property (such as a vehicle), and certain amounts of salary.
  6. Probate Code Section 13051 describes the authority of certain representatives to act on behalf of a beneficiary, such as a guardian, conservator, trustee, custodian under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, a personal representative from another state, and an attorney in fact.
  7. Probate Code Section 3(c): Subject to the limitations provided in this section, a new law applies on the operative date to all matters governed by the new law, regardless of whether an event occurred or circumstance existed before, on, or after the operative date, including, but not limited to, creation of a fiduciary relationship, death of a person, commencement of a proceeding, making of an order, or taking of an action.

The information contained in this CBA Regulatory Compliance Bulletin is not intended to constitute, and should not be received as, legal advice. Please consult with your counsel for more detailed information applicable to your institution.

© This CBA Regulatory Compliance Bulletin is copyrighted by the California Bankers Association, and may not be reproduced or distributed without the prior written consent of CBA.

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