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My real estate property is not of high value - do I need a Trust?

Posted by Maria N. Jonsson | Apr 01, 2019 | 0 Comments

It is a common misconception that ANY assets less than $150,000 in value are not subject to Probate. Although that IS true for personal property (accounts, cars, personal items, etc.), this is NOT true for real property. Real property - no matter its value – always goes through Probate Court when a sole owner dies, UNLESS it is owned in Trust.

The California Probate Code provides that real property valued up to $50,000 at time of death can be collected by the heirs via an Affidavit re Real Property of Small Value. This Affidavit must be signed and notarized by ALL heirs at law, and field with the court, together with an Inventory and Appraisal of the property – prepared by a court-appointed Probate Referee. The cost of the Inventory and court fees, and the cost to track down all heirs and get their notarized signatures, combined with the delay to wait for the Court to issue and Certify this Affidavit, can be very, very frustrating. After it is issued, the Affidavit needs to be recorded with the County Recorder where the property is located. The Affidavit must be filed with the Court of the County where the deceased owner lived; while the Property may be located in a completely different County. This makes for a long and confusing process for clearing title to such real property of “small value.”

The next level of administering such real property is when its date of death value is between $50,000 and $150,000. This is done via a Petition to Determine Succession to Real Property. The aforementioned Inventory and Appraisal is also required. As the name suggests, this is a court Petition with an assigned hearing date, and often attorney court appearance is required. When the Petition is granted, the court would issue an Order. Currently, the waiting time in Los Angeles Superior Court for issuance of an Order is 6 weeks (following the court hearing). The order has to be next Certified, then Recorded, as noted above. The attorneys' fees for these two levels of administration are billed hourly, and due to the complex steps, often the cost to conduct such administration is in the thousands of dollars, inclusive of filing fees, recording fees, appraisal fees, etc. The long delay is another inconvenience to deal with.

Finally, such real property exceeding $150,000 goes through the formal probate administration, where the statutory fees alone are about 7% of the gross value of the property, and the additional court costs, filing fees, cost of Publication, of Bond, property appraisals, etc., etc., can add up to thousands upon thousands of expenses of the administration, before the heirs can receive the property. And, formal probates can take up to 16 to 18 months, during which time often the family has to personally advance the mortgage payments, property taxes, etc.

The process is even more complicated when such real property happens to be located in another State, and requires probate administration In That State. Such administration sometimes occurs parallel with a California Probate, doubling up the expenses.

Owning real property in Trust does away with all of that. When the Trust owns the real property, the Trustee conducts central administration no matter where the property is located, and no matter its value, at a tiny fraction of the administrative costs described above. For that reason, not owning real property in trust is thought to be outright irresponsible and inconsiderate with regard to those who stand to inherit, and puts the deceased owner's family through a significant financial trauma and delay.

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About the Author

Maria N. Jonsson

Founding Attorney and a Certified Specialist in Estate Planning, Trust & Probate Law by the State Bar of California Board of Legal Specialization


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Attorney Maria N. Jonsson, Esq. is a Certified Specialist in Estate Planning, Trust & Probate Law by the State Bar of California Board of Legal Specialization. The Law Offices of Maria N. Jonsson, PC is committed to providing a comprehensive and holistic analysis of your specific circumstances as they relate to Estate Planning, Probate and Trust Administration issues in California. Schedule a one-on-one discussion of your case with Attorney Jonsson directly.