Saturday, August 15, 2009

What Happens When Someone Dies Without A Will Or Trust?

In California, everyone has an estate plan even if they have no Will or Trust. That is because California law provides a set of detailed rules which determine who is entitled to your property when you die.

If the Decedent dies without a Will or a Trust what happens next depends on the facts of each particular case. If the Decedent’s estate is worth less than $100,000.00 and does not consist of real property (considered a "Small Estate”) no formal probate court proceeding is required and the heirs may simply collect the Estate through the use of a declaration (a “Declaration of Small Estate”). Most banks, as well as the DMV, will accept a Declaration of Small Estate to obtain access to the Decedent’s accounts and/or property.

For Los Angeles County, you can obtain a Declaration of Small Estate from the following court website: www.lasuperiorcourt.org/probate/pdf/TransferForm.pdf

A second possibility is that all or a portion of the Decedent’s estate, whether real or personal, passes by contract. Examples of property passing "by contract” include assets held in joint tenancy, assets held in a “pay on death account” or, as in the case of an insurance policy or retirement account, assets payable to a designated beneficiary. There is no monetary limit on the size of an estate which could pass by contract. However, if neither of the first two scenarios are applicable (or if the heirs wish to take advantage of a formal proceeding to negotiate with the Decedents’ creditors) an action will need to be filed in the special court which administers matters concerning trusts and decedent’s estates, known as the "Probate Court.”

If a Probate proceeding is required, someone, usually the nearest living blood relative, will have to file a Petition for Probate with the Probate Court to begin the proceedings. Essentially, the Probate Court is set up to help the relatives of the Decedent determine who gets the estate. Because, in this scenario, the Decedent left no Will or Trust, the estate goes to the Decedent’s heirs at law (nearest living relatives in order of lineage). The division of assets can be found in Probate Code Section 6401, which can be viewed by following the link to the Probate Code at: www.leginfo.ca.gov/calaw.html

Because California is a community property state, all community property (not otherwise disposed of by Will) goes to the surviving spouse. However, separate property can go all to the surviving spouse or be split between the surviving spouse and children. While you can represent the estate in Probate Court on your own, it is advisable that you to retain an experienced probate attorney.

There are a vast array of rules and deadlines that may be extremely complicated for the average person to navigate. Both the Probate Fees and Attorneys’ Fees are set by law and are based on the value of the estate that goes through Probate Court.

Posted by Henry (Hank) Moravec, III, a partner at Moravecs, Varga and Mooney. This firm consists solely of attorneys who practice probate, estate and tax law in the Los Angeles area.  Hank Moravec focuses his practice on Trust and Probate Administration, Estate Planning, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. Any questions or comments regarding this post or your own situation should be directed to: hm@moravecslaw.com or (626) 793-3210.

The office is located in San Marino, California, a suburb of Los Angeles in the San Gabriel area. The firm, however, represents clients throughout California and the office is easily accessible to Los Angeles, Orange, Santa Barbara, Riverside, and San Bernardino Counties. San Marino is a short drive from Los Angeles, Pasadena, Arcadia, Alhambra, Glendale, Burbank and the surrounding cities.

The firm website is: www.moravecslaw.com