Jan 06, 2023
How to get an EIN number for an estate (step-by-step)
Filing estate taxes online can be challenging. Here’s a guide on obtaining an EIN to get you started.
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The monetary size of a decedent's estate, what it is composed of, and the marital status of the person who died, are all key components that help determine whether probate will be necessary. Avoiding the administration of a deceased's will is clearly the preferred way to settle an estate, if possible.
Recognizing that probate proceedings can be frustrating, expensive, and time consuming, California's legislators developed a procedure so that a beneficiary can settle a small estate without all of the formal probate complexities. In fact, the procedure established via California Probate Code 13050, makes filing a small state affidavit must faster than going through full probate proceedings, and relatively easy.
According to the California probate code §§890, 13000 - to be considered a small estate and avoid probate, the total value of all real property and personal property cannot exceed $184,500.
In determining if the decedent's estate qualifies, you'll need to calculate the total value of all property they owned, and add any life insurance and retirement benefits that will be paid to the estate. The total value of the decedent's property is calculated based on its worth on the date of death. It is not based on what is property's current value may be, as several months or perhaps years may have passed since the death occurred.
If a small estate includes real property (ex: real estate, including a house, condominium, townhouse, or land), California's limit where you can still utilize the small estate affidavit to transfer said property is $61,500, for deaths taking place after April 1, 2022. This is part of the total of $184,500 that is permissible to avoid probate.
This does not include monies that are designated as payable to someone other than the deceased.
The California Judicial Branch specifies that the following items are not to be included when calculating the total value of the estate:
Also not included in a small estate total valuation calculation are life insurance policies and death benefits, items subject to probate that are passing directly to one or more beneficiaries; salary or compensation payable to the decedent of up to $5,000, debts or property mortgages of the decedent, and bank accounts owned by multiple persons, including the deceased.
Because of the required exclusion of many potentially valuable assets from small estate filings, a surprising number of estates which might have been above the $184,500 threshold for large estates, now qualify to make use of the small estate's procedure.
So you've determined that the estate of the decedent qualifies as a small estate under California law, with a total valuation under $184,500. Let's see if you are entitled to file the small estate affidavit. Here are the parameters, again based on the rules of the California Family Code, section 770.
Most banks, credit unions and other financial institutions have their own affidavit available for the transfer of personal property, or you may choose to use of the form available from the county probate court.
If the deceased died after April 1, 2022, and the total value of the estate is less than $184,500, you may utilize the small estate affidavit to claim all property, except real estate. To account for inflation, the value of a small estate is adjusted every three years.
NOTE: **There is a 40-day waiting period following the time of death before this simplified procedure can be initiated with the court.
Assuming that both the estate and personal qualifications have been met, you are ready to proceed with the small estate affidavit procedure. Be sure to obtain and complete the form required by the probate court in the county where the deceased had his or her primary residence.
Both a hard copy of the form which you can pick up in person at the court or a downloaded form from the county's online self-help center is permissible to use.
Closely follow the instructions provided with the form while completing the affidavit procedure, and be sure to include all required attachments to the affidavit.
When the financial institution or person that is holding the deceased's property is presented with both the affidavit and a copy of the decedent's death certificate, it is required to release the asset to the new owner.
While the procedure detailed above may appear somewhat cumbersome, it is pretty simple and straightforward. The small estate affidavit process is far and away the best way to avoid full probate, which can easily take six months or even longer to complete.
Another way to potentially bypass full probate proceedings is by using a Spousal or Domestic Partner Property Petition, California form DE-221. This simple form requests a court order to determine what is your share of the community property as the surviving spouse or domestic partner of the decedent, as well as what is your share of community and separate property from your relationship.
Should the surviving spouse/domestic partner be legally entitled to 100% of the property in question, a complicated and drawn out probate procedure may be avoided. Couples who were together long-term, for example, may have only community property, which would transfer directly to the surviving spouse/domestic partner, if confirmed by the court.
If you're an estate administrator in the unfortunate situation of settling a small estate, we hope this article has been helpful. We want to remind our readers that we are here to help with any questions or concerns they may have about the process. If you need assistance with filing a small estate affidavit, ClearEstate is here to help make a difficult time a little bit easier for you. Contact us today.
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