July 17, 2018
Probate Proceedings:
The title to real property (and personal property) owned by a decedent at death passes to devisees and legatee, if the decedent died testate (with a will); and, to heirs, if the decedent died intestate (without a will). However, these devisees, legatees and heirs are denied by statute the right of possession of the property and the right to exercise dominion and control over the property so that, if necessary, the property might be sold, encumbered, or otherwise conveyed by the personal representative of the decedent’s estate to satisfy the debts and obligations of the decedent (Cal. Probate Code §§ 7000‐7001) The title acquired by devisees, legatees, and heirs of a decedent is thus a contingent one because it is subject to divestment in the course of estate administration. See Hamilton v. Elvidge (1933) 132 Cal.App. 21; and their title is not marketable in the absence of probate proceedings. See Reed v. Hayward (1943) 23 Cal.2d 336.
A will that has, in fact, been duly and properly executed by a decedent may not be used as evidence of title in a person therein named as a devisee. See Reed, supra. The decree of the probate court ordering distribution of property out of the estate of a decedent is not a source of title (Reed, supra) although it is said that the decree does constitute a muniment of title (In re Estate of Yorba (1917) 176 Cal. 166). [An example of a muniment of title would include but is not limited to using a death certificate of a joint tenant to prove that title resides with living joint tenant]. A probate court decree distributing the estate of a decedent does signal the end of the personal representative’s right to possession of the estate property and the control of the probate court over the property. (Mears v. Jeffry (1947) 80 Cal.App.2d 610). The probate decree also serves to indicate a release of the property from the debts and obligations of the decedent and from the expenses incurred in the administration of the estate. (Bates v. Howard (1894) 105 C.173). Finally, the probate decree confirms in a recordable document and form the previous passing of the title of the decedent. (Wharton vs. Mollinet (1951) 103 Cal.App.2d 710).
For purposes of title examination, the administration of the estate of a decedent is relied upon by the title company for the following judicial determinations, not in any particular order:
1. The existence of any claims to the decedent’s property by other people other than devisees, legatees and heirs.
2. The death of the decedent;
3. Whether a writing purporting to be the decedent’s last will and testament is valid;
4. Whether pursuant to the last will title to the decedent’s property passes to named devisees and legatees;
5. The identity of the heirs to whom title to the decedent’s property passes in the event the decedent dies without a will (intestate).
A title insurance company subjects itself to great risk and peril when it dispenses with the necessity of estate administration in which situations where title to real property is vested of record in the name of a decedent.
1. Without a final court order of distribution, there is no conclusive identification of the decedent’s heirs or devisees or of the interests of those to which they are entitled. (Cal. Probate Code §11605);
2. If the decedent’s will has not been admitted to probate, it is not admissible in evidence for the purpose of identifying and establishing the interest of the devisees. (Reed, supra);
3. The statute of limitations for the proceedings for the probate of a will or for the issuance of letters of administration is not applicable. (Graybiel v. Burke (1954) 124 Cal.App. 2d 255) Which may result in a title insurance company who ignores a probate requirement may end up having a title problem 20 years after issuing the policy of title insurance;
4. If a personal representative has not been appointed to administer the decedent’s estate, there is usually no time limit within which creditors of the decedent must assert their interest in the decedent’s property. (Hibernia Sav. & Ln. Soc. v. Farmham (1908) 153 C. 578); and
5. Heirs and devisees are not purchasers for value entitled to the protection of the recording statutes. An unfortunate result of ignoring the necessity of probate proceedings. Thus, an heir or devisees’ title can be thwarted by an unrecorded conveyance executed by the
decedent before death. (Carlson v. Carlson (1932) 124 Cal.App. 207).
ADMINISTRATION OF THE ESTATE:
The Probate Code contains provisions for the administration of a decedent's estate. The code also provides for administration of estates of an incompetent person in Conservatorship and minors in Guardianship. Trust administration is another area that is involved in title examination. An out‐of‐state probate court has no jurisdiction over California property – such a court cannot deal with the real property located within the State of California. A personal representative's authority does not extend outside state jurisdiction in the absence of a statute. An out‐of‐state probate requires an "ancillary" proceeding in a California probate court (Code of Civil Procedure § 1913(a)). The court in an "ancillary" proceeding may also appoint a temporary conservator (Probate Code § 2250) or special administrator (Probate Code §12500).
Order Confirming Sale of Decedent’s property and Independent Powers
The usual requirement for an order confirming sale in a decedent's estate also applies to Guardianship and Conservatorship cases (Probate Code §§ 2527, 2528, and 2111). Independent powers are available to a decedent's executor or administrator (Probate Code § 10400 and also to a Guardian or Conservator (Probate Code §2590). Exercise of such powers requires advance notice or consent of the
beneficiaries. (Probate Code §10580). Full powers under the Act (Independent Administration) given by the court include the authority to deal with real property, but "limited" powers limited the powers do not.
Self‐Dealing:
The personal representative may not convey title to himself or to the estate's attorney under Independent Powers without written consent of all beneficiaries unless a court order is obtained (Probate Code §10501 (a)(5), (6), (7).
Final Decree of Distribution Recorded/Probate Assignment
When examining title, the title examiner need not request a court case abstract from its court service team if a final decree of distribution has been of record five years or more, unless irregularities are obvious or additional information is required from the court records. If the title examiner concludes that the vestee in an order derived title through a probate assignment or renunciation from an heir or devisee, and not by direct devise or descent, then that heir or devisee must be run on the General Index.
Reduce the risk that the title insurer will have by proper examination of vested interests that are of record by a probate assignment as opposed to a probate decree of distribution. If the probate assignment is given for consideration from the assignee, then the interest assigned may not be treated as a gift for purposes of characterizing the interest as separate property of a married assignee.
Summary Proceedings in Lieu of Full Blown Probate Proceedings:
There are several statutory procedures (summary proceedings) that may be used in lieu of a full probate proceeding upon certain conditions, if the estate or property values do not exceed the limits as shown below:
Interest / Gross Estate limit
Personal property and real property ($150,000.00 gross estate [add personal property plus real property]) Community property (none)
Probate Code Sections to review: Probate Code §§ 13200‐13209, 13100‐13115, 13150‐13157, 6401‐13500‐13506, 6600‐6615, 13650‐
13660. Personal Property Declarations can be used to transfer property owned by the decedent when
the gross estate limit is not exceeded.
The Personal Property Declaration need not be filed with the court but all other methods require, at minimum, a filing. The Personal Property Declaration that pertains to a deed of trust must be acknowledged and recorded. (Probate Code §13106.5(a)(2)(b)). The Affidavit, or certified copies of the Court Order also must be recorded. Judicial Council forms are available only for use if court orders are
required.
Effect of a Will that is Not Probated
A will not filed in probate cannot be submitted in evidence by parties in defense of their interests (Reed v. Hayward (1943) 23 C.2d 336). “Back in the day”, before summary proceedings were available under the statutes as described above, a title examiner would (most of the time) figure out ways to waive the requirement of a probate proceeding. With the enactment of the referenced statutes, parties can now avoid the problem of proof involving a will not filed in probate. The legislature has made it a bit easier to transfer an asset without a will being probated. But the requirements must be strictly complied with in order to properly transfer title without a concern for future objections.
Probate Homestead
The court may set aside a right of the spouse and minor children to occupy the family residence. (Probate Code §60 – “Homestead” defined and Probate Code §§ 6520‐6528). Obtain a certified copy of the Homestead Order and record it.
A probate homestead (as opposed to statutory homestead) may provide a residence for the decedent’s survivors upon the survivors’ request to the probate court that the residence be set aside. The duration of the probate homestead will never exceed the lifetime of a surviving spouse, or the minority of a child (Probate Code §6524). But, until a final distribution of a decedent’s estate has been made, there is nothing final about a probate homestead. The order can always be modified. (Probate Code §6527.
The title to probate homestead property vests the same as any other property in the decedent’s estate: In heirs and devisees, subject to estate administration. Setting apart the probate homestead is a function of estate administration. Thus, in effect, the probate homestead becomes an encumbrance on the title of heirs and devisees; however, the heirs and devisees have no right of possession until the
probate homestead is terminated.
Omnibus or Residuary Clauses in an Order of Final Distribution:
In general, an omnibus or residuary clause in a decree of final distribution may appear near the end of the recitals in the decree, providing substantially as follows: " ... all other property of said estate, whether described herein or hereinafter discovered, is hereby distributed as follows: " But, beware because such interest, while held by the distribute, is subject to any unrecorded conveyance that the decedent may have delivered.