Estate Administration: Small Estate Affidavit (Prob. Code 13100)

An estate under $150,000 in value is not required to pass through probate. Rather, there is a procedure where the heirs sign a Declaration of Small Estate or Small Estate Affidavit, which they can deliver with a death certificate to a bank or broker. The institution can then transfer the assets to the heirs.

California established this procedure for small estates to avoid an expenses and lengthy probate. The $150,000 calculation does not include accounts held in joint tenancy, trust assets, 401k’s and IRA’s, Life Insurance, Pay on Death (POD) accounts, or other accounts with named beneficiaries.

If the estate is under the $150,000 amount, the heirs are not required to open a probate estate or obtain Letters. Simply providing the institution with the Small Estate Affidavit is sufficient for them to transfer the funds.

Some institutions may be reluctant to accept this form and insist on an Executor obtaining Letters through a formal probate. An experienced attorney may be able to assist with instructing the institution to release the funds and prevent an unnecessary expenses or delays.

How to Handle a Reverse Mortgage in Probate

While it’s never easy to deal with the death of a family member, you may not have much time to grieve before handling their affairs, if they had a Reverse Mortgage on their house.

Reverse Mortgages are regulated by the US Department of Housing and Urban Development (HUD). A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. In the event of a death, the servicer of the loan has a right to initiate the foreclosure process in as little as 30 days, unless the beneficiaries or heirs of the estate can provide the servicer with the required information.

Upon learning of the homeowner’s death, the loan servicer will send out a letter letting the heirs know that they have to repay the loan within 30 days
or the servicer will initiate the foreclosure process. Typically, the beneficiaries will be inclined to sell the property to repay the loan. However, if the house has to pass through probate, it can take as long as 60-90 days from the date of death to have the necessary documents (Letters Testamentary or Letters of Administration) and authority to sell the house.

The servicer of the Reverse Mortgage has the option to extend the 30-day
deadline to initiate the foreclosure process, but will only do so if the property is being actively marketed. The property can only be marketed if a representative of the estate has been appointed by the court, which can only be done by initiating a Probate of the estate.

It is imperative that the beneficiaries of an estate with a reverse mortgage on the home contact a Probate Attorney in San Diego familiar with Reverse Mortgages to save a property from a foreclosure due to a Reverse Mortgage on a home.

Bond Requirements in a Probate in San Diego

A bond is a form of insurance to replace assets that may be mismanaged or stolen by the estate’s personal representative.

The bond protects the beneficiaries, heirs, and creditors of the estate. The cost of the bond is paid from the assets of the estate.

When an estate goes through Probate in San Diego, the court may require that the personal representative (aka Executor or Administrator) be bonded.
A bond may not be required in all circumstances. The decedent’s will may waive the requirement to the bond or all of the beneficiaries and heirs may waive the bond, in which case the court will not issue a bond. However,
even if the decedent’s will waives the bond or the beneficiaries waive the bond, the court may still require a bond in certain situations, including out‐of‐state representatives.

A new form for Waiver of Bond by Heir or Beneficiary has been issued for a San Diego Probate estate which informs the heirs and beneficiaries the purpose of the bond and the effects of waiving the bond.

A Probate Bond for a Probate in San Diego is another wrinkle in the Probate process that an experienced attorney can assist the personal representative in managing.

2017 Estate and Gift Tax Update

The Estate and Gift Tax law changes for 2017 are not as drastic as previous years. The federal estate tax exemption, an amount that an individual can leave to heirs without having to pay federal estate tax, increased to $5,490,000 and a 40% top federal estate tax rate.

The gift tax annual exclusion amount per donee remains at $14,000 for gifts made by an individual and $28,000 for gifts made by a married couple who agree to “split” their gifts.

The concept of “portability” is still a valuable tool Estate Planners use with spouses. If both you and your spouse die, your surviving spouse can leave $10,980,000 estate tax free without complex estate planning. This is because your $5,490,000 exclusion amount is “portable”, which means that your surviving spouse can use any unused portion of your exclusion amount in addition to the survivor’s own $5,490,000 exclusion amount. In order to get this benefit, an estate tax return must be filed on the first death in order to elect “portability” of your exclusion amount.

Trustee Duties

If you have been nominated and are acting as Trustee, you are acting as a “fiduciary” and have many duties as Trustee. Below is a list of key duties of a Trustee:

  • Duty to identify and locate Trust assets.
  • Duty to control, maintain and preserve Trust property.
  • Duty to keep Trust property separate and identified as Trust property.
  • Duty to maintain confidentiality.
  • Duty to follow the terms of the Trust and the laws governing Trust administration.
  • Duty to exercise the standard of care of a “prudent” person under like circumstances.
  • Duty of loyalty and impartiality.
  • Duty to avoid conflicts of interest.
  • Duty to enforce claims of the Trust and defend claims against the Trust.
  • Duty to act reasonably when exercising any discretion.
  • Duty to account to the beneficiaries.
  • Duty not to delegate improperly.
  • If the Trust provides for CoTrustees:
    • Duty to be sure that all CoTrustees participate in the Trust Administration and
    • Duty to prevent any other CoTrustee from committing a breach of Trust.

See Wayne M. Zell, You Have Been Named as Trustee for a Living Trust‐‐Now What?, The National Law Review, Nov. 20, 2014.

What is a Trust?

A trust is an arrangement involving three parties. You, the “Trustor”, transfer property to a “trustee” who will hold or manage the property for your “beneficary”.

You can setup a revocable trust in which you remain in control of the funds and can even be the trustee. You hold title to your property in your name, as trustee. You can amend or revoke this kind of trust whenever you wish. Revocable Trusts are also called Living Trusts or Inter Vivos Trusts.

The purpose of a revocable trust plan is created primarily to accomplish the following:
1. To provide maximum protection for the surviving spouse
2. To pass along assets to your heirs
3. To avoid probate and its related expenses
4. To avoid a conservatorship proceeding in the event you should lose your capacity to act

Simply having a will does not avoid Probate. You can avoid the expense of probate with a revocable living trust. Remember, proper planning saves money.

Passing money to the next generation through the use of trusts

A variety of financial strategies have allowed for perhaps America’s richest family, the Waltons, to hold onto its money going well into a second generation. This has been done in part by the placing of the vast wealth into trusts that have been used in funding various charitable projects.

There is debate as to whether such a strategy is available only to ones that have billions of dollars accumulated. A Walton family spokesperson, however, stated that the estate planning practices of the family “are broadly available and commonly used.” In any event, the estate planning engaged in by the family has been ongoing for over sixty years.

Essentially, how the planning was done, was by providing the assets to their children through the setting up of a trust before these assets in the trust began to appreciate in value. The Walton family has provided a great deal of money to trusts in any number of ways where the assets have substantially appreciated. The appreciation of these trusts in essence allowed for the passing of money to heirs with a minimum of tax consequences.

With interest rates at an all-time low, some authorities feel it is an ideal time for many tax payers to set up trusts to ensure more money is provided to heirs with less tax consequences. It is claimed that these trusts, if set up correctly,
can result in assets growing faster than the money that is being distributed.
Please speak to a qualified estate planning attorney before setting up any kinds of trusts. Though strategies as the one mentioned above may not be available to everyone, attorneys can at least provide various options that may be used.

Source: Financial Post, “How Wal‐Mart’s Walton family holds onto their billions,” Zachary R. Mider, Sep. 12, 2013

Variety of documents attorneys use in estate planning

As there are so many matters that need to be taken into consideration in estate planning, there is not one simple measure that will meet all of an individual’s estate planning needs. Therefore, when helping out clients in estate planning matters, attorneys will often use a variety of tools. This can include wills, trusts, documents that concern incapacity (such as an advance health care directive) and powers of attorney for finances.

We cannot rely on one document alone for estate planning such as a living trust. Though a living trust is invaluable for operation in the event of disability, for the avoidance of assets going through probate or for the minimizing of estate taxes, it is a mistake to conclude that such a trust alone will accomplish everything that we desire.

A trust does require the meeting of a number of legal requirements. It is particularly important to note that every state handles the administration of trusts differently. This is especially true when it comes to laws regarding the preservation and/or distribution of assets at the time of death. It is also true regarding taxes that one’s heirs may have to pay.

Unfortunately, not all attorneys appreciate the complexity of this process. Some attorneys will leave it up to the client to transfer assets correctly without making it clear the exact legal steps that need to be taken. At our firm, we guide the client through the trust funding process. California residents with questions concerning estate planning will need to speak to an attorney licensed to practice law in California with experience in trust and estate matters.

Source: Fox Business, “Documents that Should be Part of Everyone’s Estate Plans,” Andrea Murad, Sep. 4, 2013


After the death of a family member, it can be difficult to confront the reality of handling their affairs. We are sympathetic to your feelings and will show compassion at every step of the process.

Our firm provides checklists designed to help you through the estate administration process after a death has occurred. We give you the roadmap of the tasks that you will work on together with your lawyer, accountant, and investment advisors.

Do not feel overwhelmed, since you can complete these steps one at a time, and you have many months to complete the tasks.

See below for an abbreviated example of our comprehensive approach to Trust Administration:
______ Order Several Certified Death Certificates
______ Locate Original Will and Codicils
______ Retain Possession of Trust and All Amendments
______ Notify Social Security of Death
______ Notify All Credit Card Companies of Death
______ Review and Terminate Automatic Distributions (ex. Health Insurance)

It is important to contact your attorney after a death, as the attorney will advise you on whether you need administer a trust or initiate probate.