Trusts and Estates

Legislation Alert: AB 473

AB 473, Maienschein. Disposition of Estate Without Administration – increases monetary limits in the small estate set aside provisions under Probate Code sections 6602 et seq. and 13050 et seq., and introduces periodic inflation adjustment.

Approved by Governor Newsom July 30, 2019; in effect January 1, 2020.

Short summary:  Increases the value of a decedent’s estate that can pass without probate under the small estate provisions; provides for automatic increases in the amount that will transfer under the small estate provisions based on a consumer price index; and gives the court discretion to excuse a person who erroneously received property under these provisions from payment of interest to the rightful owner, if a person acted in good faith.

Summary: 

Effective January 1, 2020, the small estate provisions will change as follows:

Probate Code sections 6602 and 6609: Increases the size of a decedent’s estate that may be set aside for a surviving spouse and minor children for his/her/their needs to $85,900.

Probate Code section 13100: Increases the transfer of personal property under the Small Estate Affidavit provision to $166,250.

Probate Code section 13151: Increases the transfer of real property under a Petition to Determine Succession to Real Property to $166,250.

Probate Code section 13200: Increases the transfer of real property under an Affidavit re Real Property of Small Value to $55,425.

Probate Code section 13600: Increases the unpaid compensation that can be transferred to a surviving spouse to $16,625.

All amounts will be readjusted April 1, 2022, and every three years thereafter.  The values will be rounded to the nearest $25.  Amounts will be indexed using the Consumer Price Index for All Urban Consumers.  (Probate Code §890).

Existing law imposes various types of liability on a person who receives personal or real property from an estate pursuant to the small estate or spousal claim procedures, but is later required to return that property because another person has a higher claim.  Probate Code sections 13111 and 13117 now provide that restitution will be paid at an interest rate of 7 percent per annum on the fair market value of the property.  And, a court, in its discretion, may excuse the interest payment, in whole or in part, if the claimant acted reasonably and in good faith under the circumstances as known to the person and it would be equitable to do so.

From a practice standpoint, this bill is going to have a greater effect on practitioners than most other 2019 state legislation.  Going forward, lawyers must be aware that the adjusted amounts only apply as of the decedent’s date of death.  For example, on January 1, 2020, a Small Estate Affidavit (Probate Code section 13100) may be executed if a decedent’s personal property is worth less than $166,250.  On April 1, 2022, the value will rise with inflation.  If a decedent dies on March 1, 2022, to utilize the Small Estate Affidavit a claimant must swear that the value of the decedent’s estate is less than $166,250, regardless of the fact that the account cannot be claimed until May 2022 (40+ days after decedent’s death).

https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB473

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