Q.. My father recently died, leaving his home in a Living Trust. He also left several bank accounts, which together total about $100,000. Our problem: the accounts were never actually transferred into his trust. Is there a way to deal with them without going through probate?
A. Yes, there is. And, by the way, your question suggests that you know that a probate is a court proceeding supervised by a judge, usually requires the assistance of an attorney, involves lots of paper-work and compliance with procedural rules, and typically takes at least one year or more for completion, even where everything proceeds smoothly. In our experience, most families prefer to avoid a probate proceeding whenever possible.
So, in your situation, there may be two approaches to settling your father’s estate without probate:
1) Petition Court to Transfer Accounts To Trust: One approach would depend upon whether there is written proof that he intended to make his bank accounts part of his trust, but just never got around to doing it. Example: he may have listed them in his description of assets appended to his trust, but perhaps never formally re-titled them into the trust. If so, then it might be possible to Petition the Superior Court for an order transferring them into his trust, so that they can then be handled – like the home—as part of the trust and without probate. This is sometimes called a “Heggstad” Petition, so named because of the leading court case approving this procedure. However, even this Petition would involve a court proceeding, require that you engage an attorney to prepare a written petition to the court, and would involve a short hearing before a judge. So, at best it would involve what I call a “mini- probate”. See the References, below, for more background.
2) Use Small Estate Affidavit: An even simpler process would involve using the “Affidavit Procedure” for collection of assets that do not exceed $166,250 in value (as of deaths that occur or or after 01/01/2020). This procedure, set out in California Probate Code § 13100, requires only the completion of an affidavit by the Successor(s)-In-Interest of your father, setting out the nature of the assets sought to be collected, the right of the Successor to receive them, and certain other recitals. That affidavit would then be delivered to each bank holding an account for your father, with the request that it comply with the law and turn over the account funds to the signer(s). Many banks even have forms for this purpose. Here, the successor(s) would typically be the named beneficiaries in your father’s Last Will (if he had one), or –if no Will – then the family members who would inherit his estate under the California law of Intestate Succession, i.e. the law which determines rights of inheritance where a decedent dies without a will. This law designates family members in a certain order of preference.
Of special note is that certain assets are excluded from the tally when determining whether this Small Estate Affidavit procedure may be used. They include: assets held in a Living Trust, those titled in Joint Tenancy form, multi-party accounts with a designated surviving party (i.e. a Pay-On-Death Account), all vehicles and boats registered under the Vehicle Code, a mobile home, and earnings due from employment (up to $16,625 for persons dying on or after 01/01/2020).
New law: By the way, lawmakers in California recently passed a law which provides for a further adjustment in the threshold to enable the use of the Affidavit procedure every three years after after 2020, based upon an inflation factor.
In your case, it would seem that the Small Estate Affidavit procedure might be your best approach.
References: Text of new law, AB 473 (“Disposition of estate without administration”); Ukestad v. RBS Asset Finance Inc. (03/16/2015); (Estate of Heggstad (1993) 16 Cal.App.4th 943, 947–950, 20 Cal.Rptr.2d 433; Carne V. Worthington, 246 Cal.App.4th 548; California Probate Code § 850; Probate Code § 13100.