BILL ANALYSIS Ó
AB 1305
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CONCURRENCE IN SENATE AMENDMENTS
AB 1305 (Huber)
As Amended May 31, 2011
Majority vote
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|ASSEMBLY: |74-0 |(April 11, |SENATE: |37-0 |(June 27, |
| | |2011) | | |2011) |
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Original Committee Reference: JUD.
SUMMARY : Increases the threshold value of estates for which
formal probate proceedings are required. Specifically, this
bill :
1)Increases, from $100,000 to $150,000, the maximum value of a
decedent's estate for which an affidavit or declaration to
collect decedent's personal property outside the formal
probate process may be used.
2)Increases, from $100,000 to $150,000, the maximum value of a
decedent's estate, for which a simplified petition to collect
an interest in real property outside the formal probate
process may be used.
3)Increases, from $20,000 to $50,000, the maximum value of all
real property in decedent's estate, for which an affidavit to
transfer decedent's interest in real property may be used
outside the formal probate process.
4)Increases, from $5,000 to $15,000, the amount of salary or
other compensation owed to the deceased spouse by an employer
that a surviving spouse can collect outside of the formal
probate process, and eliminates the cost-of-living adjustment.
Exempts from decedent's estate up to $15,000 of the deceased
spouse's salary or compensation owed by the employer.
The Senate amendments reduce the increase under 1) and 2), above
from $200,000 to $150,000 and reduce the increase under 3) from
100,000 to $50,000.
EXISTING LAW :
1)Allows for the use of an affidavit or declaration to collect
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decedent's personal property outside of formal probate, where
the gross value of decedent's real and personal property,
unless exempt, does not exceed $100,000.
2)Allows for use of a simplified petition to collect decedent's
interest in real property, where the gross value of decedent's
real and personal property, unless exempt, does not exceed
$100,000.
3)Allows for use of an affidavit to collect decedent's interest
in real property, where the gross value of all real property
owned by the decedent in California, unless exempt, does not
exceed $20,000.
4)Excludes certain property from inclusion in the decedent's
estate for purposes of determining the value of the estate,
including property held in a revocable trust and up to $5,000
of salary or other compensation owed to the deceased spouse by
his or her employer.
5)Allows a surviving spouse to collect, outside of formal
probate, salary or other compensation owed to the deceased
spouse by an employer, in an amount not to exceed $5,000,
subject to a cost-of-living adjustment.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version approved by the Senate, other than the higher
thresholds.
FISCAL EFFECT : None
COMMENTS : This bill increases the size of estates that may be
administered outside of the formal probate process. Under
current law, the decedent's successor may collect: 1) personal
property through use of an affidavit or declaration, provided
the gross value of the estate is less than or equal to $100,000;
2) real property through use of simplified petition, provided
the gross value of the estate is less than or equal to $100,000;
and, 3) real property through use of an affidavit, provided that
the gross value of all decedent's real estate located in
California is less than or equal to $20,000. These limits have
not been increased for 15 years. This bill increases those caps
to $150,000, $150,000 and $50,000, respectively.
Additionally, this bill permits a surviving spouse to collect,
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outside the formal probate process, up to $15,000 from the
deceased spouse's employer for salary and other compensation,
including compensation for unused vacation. The current limit
is $5,000, subject to an annual cost-of-living adjustment. The
increased limit would not be subject to a cost-of-living
adjustment.
The Trust and Estates Section of the State Bar agrees that
limits to avoid probate need to be increased. They argue that
15 years have passed since the last increase and as a result,
small estates that would have qualified to use the small estate
provisions as enacted would no longer qualify to use these
procedures:
AB 1305 seeks to raise the small estate limits to
account for inflation, the rise in asset values that
occurs over time, increases in the costs and time
delays involved in formal probate administration, and
increased burdens on the court system.
These small estate provisions serve a valuable purpose
by allowing small estates to avoid formal probate
administration. These provisions allow heirs and
beneficiaries of such small estates to avoid the
burdens and delays of formal probate administration.
These provisions also allow heirs and beneficiaries to
avoid costs which amount to a considerable percentage
of a small estate. They also reduce the burdens on the
judicial system and allow the courts to more
efficiently focus on matters requiring greater judicial
oversight and resources. But again, inflation values
and the fact that the limits have not been increased in
15 years have made these provisions unavailable for an
increasing number of small estates that historically
would have qualified for the use of these procedures.
In originally enacting these provisions, the
Legislature sought to balance the need for judicial
oversight in formal probate administrations with the
needs of judicial economy and to avoid overburdening
small estates with administrative expenses. The
Legislature has regularly reemphasized the importance
of maintaining this balance by adjusting the applicable
limits regularly over time.
Current law permits the personal property in a decedent's estate
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to pass to their heirs without an appraisal when it is stated by
declaration that the value of all the decedent's property is
less than $100,000. This value does not include certain
property such as property held in joint tenancy, multiple party
accounts, personal vehicles, mobilehomes, truck campers,
vessels, money due from service in the armed forces, and an
amount not exceeding $5,000 of salary or other employment
compensation. This bill increases the $100,000 threshold to
$150,000 dollars. It also increases the amount that a surviving
spouse may collect from the deceased spouse's employer for wages
and other compensation from $5,000 to $15,000, while removing
the current cost-of-living adjustment.
Current law also provides that, no sooner than six months after
the death of a decedent, a person claiming as a successor of the
decedent to a particular item of real property, where the gross
value of all the real property of the estate located in
California does not exceed $20,000, may file an affidavit which
is then recorded in the county in which the real property is
located. The recorded affidavit has the same force and effect
as if there was a court order granting distribution to the
affiant. This bill increases the threshold gross value of the
real property of the estate from $20,000 to $50,000.
The increased thresholds for filing formal probate proceedings
should reduce the number of required judicial proceedings, thus
reducing the costs to heirs and speeding the distribution
process.
The last time the threshold value of estates that required
formal probate was raised was 1996. At that time the limits
were raised from $60,000 to $100,000 for use of an affidavit to
transfer an interest in personal property and for use of a
simplified petition to transfer an interest in real property,
and from $10,000 to $20,000 for use of an affidavit to transfer
an interest in real property. Before that, the threshold for
filing formal probate proceedings was last increased in 1984,
when it was increased from $30,000 to $60,000 dollars.
Analysis Prepared by : Leora Gershenzon / JUD. / (916)
319-2334
FN: 0001226
AB 1305
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