When a loved one passes away, you may hear that the means to transfer their properties to surviving family members is through probate.

But what if the estate is so small that the cost of such a proceeding will simply swallow up its entire value?

The good news is that California has laws specifically tailored for small estates – that allow the transfer of estate assets to heirs and successors even without going to probate.

Cue the Small Estate Affidavit

The Small Estate Affidavit, also known as a Section 13100 Declaration, is an out-of-court alternative to people dealing with a small estate left behind by a decedent.

This affidavit or declaration applies strictly to personal or tangible property only, however. So if your loved one left a savings or a retirement account, one needs only present a duly accomplished Form DE-300, formally titled, “Affidavit for Collection, Receipt, or Transfer of Personal Property,” together with a certified copy of the person’s death certificate, to the bank or financial institution with custody of those funds or property.

If all documentation is in order, the form should serve as authority for the bank or financial institution to facilitate the transfer of the property to the decedent’s successors.

Cue the partner Affidavit re Real Property of Small Value

You might be wondering, what if the decedent left real property, and the estate still falls under the definition of a small estate? Is there also an affidavit to facilitate the transfer of the property without going to court?

There is – more commonly known as the Affidavit re Real Property of Small Value, or Form DE-305.

But this is a separate process and attended by different requirements and value limits. Here, we focus on the small estate affidavit for personal property, which is the more commonly used probate shortcut.

When can you use the Small Estate Affidavit?

 To be eligible to use the Small Estate Affidavit, the estate must fit the definition of “small.” This means that the gross value of the estate must not exceed the following values:

Date of Death	Small Estate Limit
Between January 1, 2020 and March 31, 2022	$166,250
Between April 1, 2022 and March 31, 2025	$184,500
After April 1, 2025	$208,850

The date of death is relevant here because the value of the estate is set to the fair market value of the property at the time of death.

One caveat here, however, is that even though the Small Estate Affidavit only applies to personal property, the gross value of the estate includes the value of any real estate properties left by the decedent.

The estate, however, does not include non-probate assets such as Transfer on Death (TOD) or Payable on Death (POD) assets such as life insurance or IRAs; assets held under a living trust; and properties held under a joint tenancy.

Additionally, to be able to use this method of transferring estate assets, the law sets a few other additional requirements:

• There must not be any formal probate started, and
• At least 40 days have passed since the date of death

The 40 days requirement is a mandatory waiting period imposed by Probate Code § 13100 to give sufficient time for family members to identify the estate assets, confirm who is legally entitled to inherit, and determine if there are any outstanding debts and liabilities.

The Debts and Liabilities for a Small Estate

The one caveat for anyone utilizing a Small Estate Affidavit is that a transfer of the decedent’s properties to the successors does not eliminate the decedent’s debts. To the extent of the value of the properties that the successors inherited, they would also be liable to pay for those debts and liabilities.

Probate Code §13109 provides that the transferee of personal property via a Small Estate Affidavit becomes personally liable for the decedent’s debts and liabilities up to the value of the transferred property.

It would be as though the transferee had stepped into the shoes of the decedent, as far as debts and liabilities go. And it follows that the transferee could raise any defense, set-off, or cross-complaint that the decedent could have raised, were they still alive.

This is, in a manner of speaking, the trade-off for the relatively quick out-of-probate transfer: there would not be any personal representative handling the administration of the estate, so the transferee is expected to take on this responsibility.

For instance, if the transferee received cash savings in the amount of $50,000 and has determined that the decedent owed $30,000 in debts, then the transferee would have to pay off the $30,000 and would only be receiving $20,000 from the estate assets.

If the amount of liability exceeds the value of the estate, then it is very likely that the transferee will use the entirety of the estate to pay off those debts and receive nothing. Again, the transferee’s liability will only be up to and not exceeding the value of the estate assets transferred.

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If you’re considering using a small estate affidavit, it’s worth taking the time to ensure everything is done correctly. Schedule a consultation with us today to protect your interests and avoid unnecessary liability.