PROBATE is long, costly, and sometimes, contentious. Further, and in certain circumstances, it cannot be avoided. But this article isn't about the horrors of probate, but instead, about the silver-lining that lives within the realm of probate, that most people are unaware of.
The Spousal Property Petition:
The spousal property petition is a legal process in California that allows surviving spouses or domestic partners to affirm or assume full ownership of certain property without going through the full probate process.
As stated above, probate can be a lengthy and costly procedure, and the spousal property petition (bless its heart) offers a more streamlined alternative for eligible individuals.
For one, if your deceased spouse died without children and did not leave their property to someone via a trust or will, then a spousal property petition might be right for you. Further support that a surviving spouse will be able to avail themselves of a spousal property petiton, is if the deceased spouse left a will or trust and named the surviving spouse as the RESIDUARY beneficiary of the subject property.
Of course this assumes that your spouse, before they died, did not use another probate avoidance tool like a transfer or payable on death beneificary form to name a beneficairy.
Layman terms. If your spouse left a bank account for instance and failed to name a beneficiary of that account at the time her or she passed away, and did not have a trust or will that otherwise controlled how and who was suppose to get that account, then you, as the surviving spouse, would be able to assert that under California's Community Property Law (assuming the bank account was created during the marriage and there is not a pre-nup or post-nup involved) you are lawfull entitled to that account. And to facilitate this, you would use a Spousal Property Petition.
Spousal Property Petiton v. Full Formal Probate Proceeding
Time and money! If you value either than you want to do some research or talk to an experienced lawyer and see if you meet the criteria for a spousal property petition.
Time: From start to finish a spousal propety petition can last between 3--5months, before the court confirms that your deceased spouses' share in the community property belongs to you and then another month or two to get the banks or county recorder's office to take the necessary steps so that you can either liquidate or transfer the subject asset into your name.
For a full formal probate proceeding you are looking at 1-2 years on average, longer if the case is contested (fancy word for there's other interested parties arguing they are lawfully entitled to your deceased wife or husband's estate).
Cost: Depending on the experience of your attorney and the total amount of assets at issue you might be looking at $5-7k, in some cases, more, in some cases, less, it all depends.
However, when it comes to a full formal probate proceeding the attorney's fees are set by statute in Californai, which nine out of ten times means the larger the estate, the more money your attorney is going to make.
For example, if the assets that need to be probated total $1 million dollars, then what you'll pay your probate attorney, assuming he's also serving in the role of estate representative, which often is the case, then you are looking at paying him or her around $66,000. This would come out of the estate after it was liqudated of course, but still, not de minimus, by any means.
Hence, the time and cost difference between a spousal property petition and a full formal probate proceeding is SUBSTANTIAL. The former, far more superior and efficient, in almost every conceivable way.
So, that's great and all but what about the steps involved, and further, is it really that simple?
Great question. Let's take a look, shall we.
STEPS IN A NUTSHELL
1. Fill out and file the Spousal Property Petition
Fill out Form DE-221 and file it with the clerk at the appropriate California superior courthouse. If your spouse or domestic partner had a will, attach it to your petition. You’ll also want to attach any written agreement you had with your spouse or partner that outlines your ownership of community property.
2. Notify Necessary Parties 15 Days Before Court Hearing
After filing the petition, you must notify all interested parties at least 15 days before the scheduled court hearing. Interested parties typically include heirs, beneficiaries, the executor or administrator of your spouse’s estate and anyone else with a legitimate interest in the property transfer. This notice ensures that all relevant parties have an opportunity to object to the transfer.
3. File a Spousal Property Order
Form DE-226, the spousal property order, is the next form you’ll need to complete. It outlines the court’s decision regarding the property transfer. Make sure to fill out this form accurately and submit it to the court at least four days before the scheduled hearing. This is what the probate judge will sign if they approve your petition. Note. Some probate judges prefer that you submit the order subsequent to the hearing. Always double-check with the cleark of your court to see what the judge's preference is.
4. Attend Court Hearing
Once the petition has been filed and notice served, the court will review your petition. If your documentation is orderly, your claims are accurate and there are no valid objections, the court will approve the petition. In the past you would have to be physically present in the courtroom for this hearing, but nowadays, it's becoming very common to be able to attend this hearing telephonically or via zoom. Always find out with your court whether virtual appearance is permitted in the proper process for scheduling a remote appearance.
5. Transfer of Property
After court approval, you can work on transferring the property’s title into your name. This may involve working with a title company or directly with the relevant institutions, such as banks or real estate offices. Sometimes if you're doing this alone (i.e. without an attorney) it can be a grind, but as long as you stick with it, ask the right questions, and be patient, you'll eventually get to the promised land.
CONCLUSION
I often hear people lament about the travails of probate. Look, I get it. A huge part of my practice is estate planning (trusts and wills) with the overarching goal of avoiding probate. Painting probate as this big scary money hungry monster is a big part of my sales pitch, and in every sense, is true. But, and here's the caveat, probate doesn't always have to be this big looming nightmare that keeps you up at night. There are certain exceptions like the Spousal Property Petiton and a Heggstad Petition (which I'll write about in another article) that won't cost you the time and money and headache that a full formal probate proceeding will.
So, there you have it...the California Spousal Property Petition. It might not be as good as having a trust when you die, but it sure as heck is not as bad (by any measure) as going through the entire grueling process of FULL BLOWN PROBTE. Till next time, my legalites, till next time.
-RJM LAWYER
[DISCLAIMER]: in no way should this article be construed as legal advice. You should always consult a licensed professional before making substantive legal decisions. This articles aim is at humor and providing marginal legal advise on variety of legal matters. By sharing said information in no way do I become your attorney or is a client-attorney relationship formed.
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