• disadvantages of simplified probate alternatives

Disadvantages of Simplified Probate Alternatives

The disadvantages of simplified probate alternatives are often unknown to people who are simply focusing on quickly settling a decedent’s estate. There are several simplified probate alternatives that avoid the formal probate process in California. A small estate without real property may be settled by filing a simplified probate affidavit. Spousal community property may be transferred through a spousal petition.  Real property under $150,000 can be transferred by filing a small estate proceeding. Identifying the right simplified probate alternative may be relatively straightforward, and settling an estate using a California simplified probate process will certainly be less expensive! Nevertheless, there are certain disadvantages of using simplified probate alternatives. Read on to learn more about some of the common disadvantages of such probate alternatives and how A People’s Choice can help you.

Do The Disadvantages of Simplified Probate Alternatives Outweigh the Benefits?

Liability for Creditor Claims

One of the disadvantages of simplified probate alternatives is that using these procedures leaves the beneficiaries exposed to potential liability for unpaid creditor claims. In a full probate proceeding, the personal representative is required to notify all the decedent’s creditors in order for them to make a claim against the estate. If the decedent has left adequate documentation, it should be relatively easy for the personal representative to identify all creditors. In many situations, however, it is not possible for the personal representative to determine who the decedent’s creditors were. When this happens, the heirs and beneficiaries may find themselves facing a creditor claim down the road which they may be responsible to pay as you will further read about below.

In a full probate proceeding, the personal representative has a duty to notify both known and reasonably ascertainable creditors of the decedent upon their death.  In a full probate, the Notice of Administration to Creditors form and Creditor’s Claim form are required to be mailed to creditors. In addition, the filing of a full probate requires publication and notice in a legal newspaper which also serves to notice unknown creditors. A full probate provides opportunity for the personal representative to find how many valid claims exist against the estate, and then make sure enough assets exist to cover the debts.

In contrast, when a simplified probate proceeding is used to settle an estate, there is no mandated mailing of a Notice of Administration to Creditors form. There is no need to publish notice of decedent’s death in a legal newspaper. One of the important disadvantages of simplified probate alternatives is that beneficiaries retain full responsibility for the decedent’s debts, should a creditor later come against the estate after the decedent’s assets have been distributed. If for any reason a creditor is not properly paid, the beneficiaries and heirs can be held liable.

Delay of Settling Estate

Another disadvantage of using a simplified probate process is that it may delay the time it takes to collect or distribute the decedent’s assets. There are several different simplified probate processes that could be utilized to administer a small estate. The chosen process depends on what the decedent’s assets are and their combined value. In all cases, however, each of the simplified probate procedures allows a personal representative or the decedent’s beneficiaries to collect the decedent’s personal property and distribute it to the rightful heirs (or beneficiaries named in the will). Depending on the type of small estate proceeding that is utilized, at least 40 days, and in some situations 6 months, must pass after the decedent’s death before any action can be taken under these simplified probate proceedings to enable the collection or distribution of the decedent’s assets.

Spousal Property Petition Probate Only Settles Spousal Interest

The spousal property petition probate process is a simplified proceeding which allows a surviving spouse to collect the assets of his/her deceased spouse or partner (registered domestic partner) without formal probate. Community property and sometimes separate property, may be able to be transferred to the surviving spouse if the Spousal Property Petition is granted. It must be understood, however, that the filing of a Spousal Property Petition only settles and confirms either separate or community property that can, under California law, be transferred to the surviving spouse. If there are other heirs or beneficiaries entitled to part of decedent’s estate, a separate probate proceeding would be needed to distribute the remaining non-spousal property assets.  

When Filing Full Probate May Be Better

If the decedent’s estate is valued at $150,000 or more, and has a mix of community and separate property, it may be better to start a full probate process. This will make sure that the beneficiaries do not retain any liability for outstanding debts of the decedent. It will also avoid non-spousal heirs and beneficiaries having to file a separate proceeding. A People’s Choice can help you complete paperwork to utilize a simplified probate alternative. Contact us for more information.

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By |2018-01-18T15:47:06+00:00February 14th, 2016|Estate Planning, Probate|0 Comments

About the Author:

Sandra M. McCarthy, founder of A People’s Choice Inc., has worked exclusively in the legal field since 1976. She served as the 2004-2005 President of CALDA (California Association of Legal Document Assistants). She obtained a Paralegal Certificate from the University of California, Santa Barbara. During her career in the legal field, she has worked as a freelance paralegal, law office manager and paralegal studies teacher, and has co-authored numerous legal publications and written hundreds of self-help legal articles. As a registered Legal Document Assistant, Sandy is dedicated to providing affordable, low-cost, self-help document preparation services for California consumers in all 58 counties.

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