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How does the small estate law work?

Usually, almost every estate must go through probate after the person who owns the estate passes away. And every person’s will must go through probate as well, to ensure it is valid.

However, there are a few exceptions that could keep California families out of the complex and often lengthy probate process. One of those exceptions occurs if your loved one’s estate meets the qualifications of the small estate law.

What is the small estate law?

California’s small estate law applies to estates that are valued at $150,000 or less. This value must include nearly all of the assets and the estate. Though, a few assets are not included in this total value, including, but not limited to:

  • Assets included in a trust
  • Retirement accounts
  • Life insurance benefits

Since these estates are considered small, the law determines that they do not need to go through the complex probate process after the death of a loved one. 

How can families use the small estate law?

Though a small estate might be able to avoid probate, surviving family members and beneficiaries still have several steps to complete. If you are a beneficiary of a small estate, you must obtain a Small Estate Affidavit to legally transfer the property you inherit from your loved one. This requires families to:

  • Provide the state with a copy of the death certificate
  • Prove their identity and relationship to their loved one
  • Establish proof that their loved one owned the property to be transferred
  • Create and send a detailed inventory of the property

But families must wait 40 days after their loved one passes before they can use the small estate law to distribute their loved one’s property.

Families cannot always use the small estate law

There are some cases when California families cannot use the small estate law, even if their loved one’s estate technically qualifies as a small estate. You should not use the small estate law if:

  • The estate’s debts outweigh the value of the estate
  • Beneficiaries disagree on how to distribute assets
  • There are disputes over the property
  • It is necessary to transfer titles of property, such as the family home
  • There is more real property than personal property

In these situations, it might be necessary to distribute your loved one’s property through the probate process.

Dealing with a loved one’s property while still grieving their loss can be incredibly overwhelming for you and your loved ones. However, you want to ensure that you approach the estate administration process correctly, to reduce the stress already weighing on your family.

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