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How real property is transferred on death of parent or relative depends if the real property is in a trust or not in a trust.
Real property in a trust is transferred by the successor trustee.
Real property less than $50,000 in value and not in a trust is transferred by filing an affidavit with the recorder and Clerk of the Court of California.
Real property greater than $50,000 and not in a trust is transferred by order of a Judge of the Superior Court of California.
How to Change the Payee of a Decedent’s California Oil and Gas Lease
Executors of Wills, successor trustees and heirs can use the “Affidavit Real Property of Small Value” (the “Affidavit”) to change the payee of oil and gas leases. The Affidavit is a powerful and inexpensive tool to avoid probate and save time for oil and gas leases valued at less than $50,000.
Many Californians own an interest in an oil and gas lease. The lease is a separate and distinct ownership interest in oil and natural gas found below the surface of real property owned by someone else. The lease provides a revenue stream to the owner.
After the owner has died the leasing company continues to make checks payable to the decedent. These checks cannot be deposited or cashed into a bank account. Most often the revenue stream is a few hundred dollars a month.
Many heirs are tempted to walk away from these payments because of the complexity of changing ownership. But the small revenue stream is an opportunity. Most often the appraised value of this small revenue stream is less than $50,000.
A state appointed probate referee determines the market value of the lease as of date of death. If the probate referee determines the market value is less than $50,000 the Affidavit, a certificate of death, legal description and an Inventory and Appraisal are filed with the Clerk of the Court.
The Court Clerk returns a signed certified copy of the Affidavit. The affidavit is recorded with County Recorder. A copy of the recorded Affidavit is provided to the leasing agent. The affidavit identifies the heirs as owners and payees.
An oil and gas lease owned by a decedent may be transferred to heirs by an “Affidavit Real Property of Small Value.” The Affidavit is economical and efficient. The Affidavit changes the payee from the decedent to the heirs so monthly lease checks can be deposited.
Real property held in a Trust
On death of parent or relative who has a trust, the successor trustee transfers real property to the beneficiaries of the trust without any court supervision. Transfer is by affidavit of death of trustee and deed from trust to heirs. Both documents are submitted to the county recorder.
Real property less than $50,000
California law has a shortcut, or expedited probate procedure for real property less than $50,000 in value known as “Affidavit Real Property of Small Value.” This procedure is primarily available for timeshare estates and land away from the coast.
Real property less than $150,000
On death a parent or relative with an estate less than $150,000 the heirs can obtain ownership of real property with one court order of "Succession to Real Property." Succession avoids lengthy and costly large estate probate administration and save heirs time, money, and stress.
Real property greater than $150,000
Real estate valued greater than $150,000 requires formal probate administration. Probate is the administration under court supervision of a decedent’s estate as directed in his or her Will or by the laws of intestacy. Formal probate requires at a minimum two court hearings, three court orders and one year to complete.
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Questions? E-mail to Mark@DeedAndRecord.com or call 714-846-2888