8 Exceptions to Probate

Other than the Real Estate being in a Trust, these are the 8 exceptions to needing probate in regard to the transfer of Real Property.

Verify Here if the property is in a trust

1: Joint Tenancy

If the property is vested in joint tenancy, then the question is whether all joint tenants have passed away. A probate is only necessary if ALL joint tenants have passed away.
For example, if mom and dad vested their home as joint tenants and dad dies first, a probate is not necessary. Instead, an Affidavit of Death of a Joint Tenant would be recorded for dad with the county recorder, along with a certified death certificate. Then later on, when mom dies, a probate would be needed.

2: Community Property

If mom and dad vested their home as community property, then title passes to the surviving spouse unless the deceased spouse left a will. Theoretically, mom and dad each own 50% of the home. Thus, mom could in her ‘Will’ give her 50% to her favorite charity or to anybody she chooses; if this were the case and mom’s estate is valued over $166,250 starting 1/1/2020, then a probate would most likely be required.
In practice, if a house is in community property and the surviving spouse wants to sell the house, it is often the case that the title company will ask all children to sign off to close escrow without the need for any probate court involvement.
Because dad or mom may dispose of his or her half of the community property in his or her will or trust, if no estate plan has been put in place, the surviving spouse may be forced to go to court and petition for a court order that passes the deceased spouse's half of the community property to the surviving spouse. Some title companies will allow surviving to close without any type of court order if he or she signs the following form: “Affidavit of Surviving Spouse – Succeeding to Community Property (California Probate Code Section 13540)

3: Community Property with Right of Survivorship

Beginning July 1, 2001, husband and wife can vest their home as community property with right of survivorship. Property owned in this form apparently retains all the features of community property (including receipt of a new cost basis on death for both halves under IRC §1014) except that the property passes on death to the survivor, without any potential problem presented with community property. If mom and dad have their home vested as community with right of survivorship, then upon the death of first spouse, the surviving spouse automatically gets the house. However, upon the death of the last surviving spouse, a probate is necessary. Because, neither husband nor wife can ‘Will’ their 50% away, this is sometimes called the “I Love You Way of Holding Title”.

4: Revocable Transfer on Death Deeds (RTOD)

On September 21, 2015, a new method of transferring real property without probate or trust was enacted. Starting 1, 2016, a person may transfer certain real property on death by a ‘Revocable Transfer on Death Deed’ (RTOD). The homeowner would simply add the beneficiary on the RTOD, and when homeowner passes away the beneficiary would automatically be entitled to the house without any sort of probate proceeding. However, a revocable transfer on death deed can only be used for the following types of property:

One to four residential dwelling units;
A condominium unit;
Agricultural real estate of 40 acres or less that is improved with a single family residence.

5: Spousal Petition

When a person dies intestate (meaning a person died without a will), leaving real property that passes to his or her surviving spouse or registered domestic partner under Prob C §6401, or dies testate (meaning a person died with a will) leaving all or a part of his or her property to the surviving spouse or partner, the surviving spouse or partner may file a “Spousal Property Petition” to receive the real property without a probate. Prob C §§13500, 13502; Fam. C §297.5(c). If the house is community property or if a will was left by deceased spouse giving the house to the surviving spouse, then a spousal petition would be successful.

A probate would normally take about 1 year to complete. However, a spousal petition (Form DE-221) would only take 3-4 months depending on the court schedule. These are the keys when using this “fast track” Spousal Property Petition.

The house must be acquired during the marriage. In California, there is a legal presumption that all property acquired during marriage is community property (except for inheritance or gifts). Thus, the surviving spouse would already own 50% of the house and all the spousal petition would do is petition to put the other 50% of the deceased spouse’s interest in the house into the surviving spouse’s name.
You use this procedure when one spouse passed away and the house is community property and the surviving wants to sell the house.
The names and addresses for all heirs need to be provided on the spousal petition to receive notice of the court date.
Once approved by the probate judge, the probate judge will sign the Order (Form DE-226). You will in turn give the certified order to escrow to close your escrow transaction.

6: Heggstad Petition:

When a homeowner gets a trust, normally all real property will receive a new grant deed (this is known as funding the trust). Deeding the house to the trust, the trust owns the house. However, from time to time the owner of the house might refinance the house and some lenders will ask that the house be deeded back to the homeowner prior to the refinance. A problem arises when the homeowner passed away and the house was never deeded back into the trust. The question would be is a probate necessary?

There is a procedure known as a “Heggstad Petition” named after a 1993 case allowing the house to be put back into the trust. Estate of Heggstad (1993) 16 CA4th 943.
Whether or not a Heggstad Petition will be successful depends on the facts and circumstances involved. If there is a trust with a “Schedule A” that lists the subject property and there is a “Pour-Over Will” that states all property shall be pour over to the trust, then almost always it will be successful.
However, what if there is no “Schedule A” and the house isn’t mentioned anywhere in the trust, plus there is NO pour over will? Then it becomes that much more challenging. In these situations an experienced and Probate Attorney could use a new landmark case: Ukkestad v RBS Asset Fin., Inc. (2015) 235 CA4th 156, 164. This case stands for the proposition that a general statement in the trust instrument that the grantor assigns all the grantor's interests in all real and personal property is sufficient. Some probate judges will approve the “Heggstad Petition” even when there is no pour-over will.
In this procedure there will be a court hearing date and all named heirs along with those named in the trust will be notified of the court hearing date.
If the case is approved, then the probate judge will sign an order stating the house is part of the trust’s assets and escrow need will a certified order to close the real estate transaction.
This procedure takes about approximately four months to complete.

7: Affidavit RE Real Property of Small Value ($55,425 or Less)

When Real Property Value is Less than $166,250 Effective 1/1/2020, does the aggregate value of the decedent’s property exceed $166,250? If yes, a probate is necessary. If decedent owns any type of real property that is worth less than $166,250; a probate is not necessary. However, either an
1) Affidavit RE Real Property of Small Value or
2) Petition to Determine Succession of Real Property.

If the decedent owns raw land or a fractional interest in real property and the value on the date of death is less than $55,425 AND at least six months have elapsed since the date of death of the decedent as shown in the certified copy of decedent’s death certificate then one may use this procedure to avoid a probate.
However, to use the Affidavit RE Real Property of Small Value (Form DE305), one must hire a probate referee to appraise the value of the subject property and sign the Inventory and Appraisal (Form “DE-160”) under penalty of perjury stating the value on the form.
This procedure cannot be used if there is a probate proceeding happening or being conducted in California for administration of decedent’s estate. Furthermore, the affidavit requires a declaration that all funeral expenses of last illness, and all known unsecured debts of the decedent have been paid.
One would submit both forms to the probate court and if all is in order then the court clerk will approve it along with a certified seal.\
This procedure does not require a court hearing date but does need all heirs to sign off on it. This process might take approximately 2 months.
The “Affidavit RE Real Property of Small Value” is typically used for situations where decedent owned raw land under his or her own name

8: Petition to Determine Succession to Real Property ($55,425 to $166,250):

For real property with a value between $55,425 to $166,250, you can avoid a probate by filing Form DE-310, which is known as “Petition to Determine Succession to Real Property”.

You can use this form if at least 40 days have elapsed since the date of decedent’s death and is no probate being conducted in California for administration of decedent’s estate.
The gross value of the real property needs to be between $55,425 to $166,250. You would hire a probate referee to prepare the Inventory and Appraisal form, which is Form DE-160 to reflect such value. The idea is that the court wants an independent probate referee to confirm that value is indeed between $55,425 to $166,250.
This procedure will require a court hearing to be approved and signed off by the probate judge. Depending on the court calendar, this process may take between 2 to 4 months to complete.
The court will ask that all heirs be given notice. Which means you must put all names and addresses of all heirs on the Petition to Determine Succession to Real Property form.

How we can help:

We can quickly, normally in 1 business day, determine if the property is actually owned by a Trust and provide you the legal name of the Trust.
We can meet with you, *Free of Charge, to help you get a better understanding of the process, what you are going to need to do next, help you know the right questions to ask and who you should consider talking with. This can be done in person at out Santa Clarita office, or via a group video meeting so all interested parties can participate regardless of their location.
We can also coordinate with your current Probate Attorney or connect you with qualified Estate Planning Attorneys who will help you understand the terms of the Trust, help determine who are the Trustees, and the intentions of the Maker(s) of the Trust. This can be very helpful if the attorney who drew up the Trust is not available, not local, or if you simply want a 2nd opinion on your options.
*Why don’t we charge for this? As licensed REALTORS, we don’t charge by the hour. A consultation with us can save you time and therefore money when you are meeting with professionals who DO charge by the hour. By providing you helpful information, all we ask is that you consider our Real Estate services should you decide to sell a home. There is no obligation.