Increase in Small Estates Limits

As part of an estate administration, it is typical to use a small estate affidavit to claim assets that may have not been titled in the name of a trust, or assets which were “lost or forgotten” by the family.  Previously we were limited in the usefulness of this process, as the asset limit for a small estate process was $100,000.  Often, when a number of accounts were located which needed to use this process, the total would exceed $100,000 which would then require a full probate proceeding to be opened.

As of January 1, 2012, California Probate Code section 13100 has been updated to allow for small estate transactions where the estate does not exceed $150,000.  This increase in dollar amount should help us avoid the need to open a probate for small estates and to claim assets in a much easier manner.

It is likely however that banks and financial institutions will be resistant and unaware of this change.  Most financial institutions have pre-printed forms which list the old $100,000 limit on them.  Unless the financial institution has updated their forms, the clerks processing the paperwork will be unaware of the change and refuse to process transactions in excess of $100,000 but less than $150,000.  In addition, for financial institutions out of state, it is likely that they will also be resistant to processing a transfer in excess of $100,000 and will need to be educated as to the recent change in California law.  While we may have to educate the financial institutions regarding the law change, overall this new law will greatly ease some of the estate administration issues and avoid the need for probate proceedings for estate less than $150,000.

* The information contained in this Blog is intended for general information and educational purposes only and does not constitute legal advice or an opinion of counsel.