What is the small estate set-aside?
The Small Estate Set-Aside was previously discussed in the context of family protection statues, but it is worth mentioning again for purposes of probate avoidance.
California Probate Code Sections 6600-6615 permit a summary set-aside of a deceased person's estate if all of his or her personal property and California real estate has a net value of $20,000 or less. The key here is that we look to the net value of the property rather than the gross value. This means that we reduce the value of the property by any debt, mortgages, liens, and other encumbrances (as well as the value of the probate homestead, if any).
This procedure, however, is only available to the surviving spouse and to the deceased person's minor children.
Although somewhat limited in scope and only allowed to be used by certain family members, it can be an incredibly useful tool when the appropriate context arises. More often than not, the surviving spouse and minor children are the ones who are faced with the need to probate the deceased person's estate any way. In addition, with the rising level of household debt, it's not uncommon for a deceased person's estate to have relatively little equity (especially if he or she is young).