11.4 Asset Searches, Judgment Recovery & Probate Discovery

Asset Searches, Judgment Recovery & Probate Discovery

Core Practice Standard: The asset search is the commercial heart of civil investigative work — pre-litigation collectability opinions, post-judgment enforcement, dissolution matters, and fraud recovery all run on it. It is also the area where the gap between what clients ask for and what the law permits is widest. Clients want bank balances. The law gives you public filings, compulsory court process, and inference.

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The Cardinal Rule: No Pretexting Financial Institutions

Before any technique, fix the boundary. The Gramm-Leach-Bliley Act, 15 U.S.C. § 6821, makes it unlawful for any person to obtain or attempt to obtain customer information of a financial institution relating to another person by making a false, fictitious, or fraudulent statement to an officer, employee, or agent of the institution, or to the customer, or by providing a document known to be forged or falsified. Section 6823 supplies criminal penalties. A vendor who returns "verified bank account and balance" for a modest fee has almost certainly pretexted, and buying that product implicates the purchaser in the scheme as well as exposing the investigator under the dishonesty grounds in BPC § 7561.1.

Bank account discovery is therefore not an investigative technique in California. It is a judgment enforcement technique, reached through court process described below.

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Building the Asset Picture From Public Sources

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|  REAL PROPERTY   County Recorder grantor/grantee index; deeds, deeds of    |
|                  trust, reconveyances; County Assessor APN, characteristics|
|                  and assessed value; tax default lists                     |
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|  BUSINESS        Secretary of State bizfileOnline: entity status, agent    |
|                  for service, Statement of Information (SI-550 corporate,  |
|                  LLC-12); county fictitious business name index            |
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|  SECURED DEBT    Secretary of State UCC-1 financing statements: who has a  |
|                  security interest in what equipment, inventory, receivables|
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|  LIENS/JUDGMENTS County recorded abstracts of judgment; state and federal  |
|                  tax liens; mechanics liens; court civil indexes           |
+---------------------------------------------------------------------------+
|  TITLED GOODS    DMV vehicles and vessels (DPPA/Vehicle Code permissible   |
|                  use required); FAA aircraft registry; USCG documented     |
|                  vessels                                                   |
+---------------------------------------------------------------------------+
|  PROBATE/TRUST   Probate Code § 8200 lodged wills; probate index; estate   |
|                  inventories and appraisals filed with the court           |
+---------------------------------------------------------------------------+

Reading Real Property Correctly

A deed proves ownership; it does not prove equity. Pull the deed of trust and any reconveyance, estimate the encumbrance, and compare against the Assessor's assessed value and market comparables. A $1.2 million home with $1.1 million of recorded trust deeds and a homestead exemption is not an asset for enforcement purposes, and a report that says "owns real property valued at $1.2 million" without that analysis is misleading — a real risk under BPC § 7539(b), which prohibits knowingly making a false report to the client.

Watch for the fraudulent-transfer signature: a grant deed transferring the residence to a relative, a trust, or an LLC shortly after the plaintiff's demand letter, recorded for nominal or no consideration. California's Uniform Voidable Transactions Act (Civil Code § 3439 et seq.) is the client's remedy; the investigator's job is to date the transfer against the claim and flag it.

Business and Secured-Debt Records

The Secretary of State's bizfileOnline system yields entity status, formation date, agent for service of process, and the Statement of Information listing officers, directors, or managers. UCC-1 financing statements are the underused half: they reveal both what a debtor has pledged and, read the other way, that a debtor owns equipment or receivables worth pledging.

Check entity status carefully. Under Revenue and Taxation Code § 23301, a corporation's powers, rights, and privileges may be suspended for unpaid tax, and a suspended corporation cannot lawfully exercise corporate powers — a finding that changes both the collectability analysis and the client's litigation posture.

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Judgment Enforcement: The Tools That Reach Further Than You Can

Once the client holds a judgment, the Enforcement of Judgments Law supplies compulsory process no investigator can replicate. Know these by section number:

The debtor examination is the practical answer to the bank-account question: it is where the debtor is asked, under oath, where they bank. The investigator's contribution is to serve the debtor, locate the third parties worth examining, and identify the employer and the property to levy.

Exemptions Make or Break the Report

California exempts substantial property from enforcement under CCP § 704.010 and following, and an asset report that ignores exemptions overstates recovery. The headline is the homestead exemption in CCP § 704.730, which since the 2021 amendment is the greater of the prior calendar year's countywide median sale price for a single-family home, capped at $600,000, or $300,000, with both figures adjusted annually for inflation from 1 January 2022 based on the California CPI. Other exemptions cover a motor vehicle, tools of the trade, household furnishings, and most retirement accounts. Flag them; the client needs the net, not the gross.

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Probate and Estate Discovery

Probate Code § 8200 requires the custodian of a will, within 30 days of having knowledge of the death, to deliver the will to the clerk of the superior court of the county in which the estate may be administered and to mail a copy to the named executor or beneficiary. That duty is what makes the county probate index a dependable starting point when a subject or a debtor has died.

From the probate file an investigator can obtain the petition, the Inventory and Appraisal listing estate assets with values set by a probate referee, creditor's claims, and the eventual order of distribution. Trusts are harder because they avoid probate and are not publicly filed; the trail there runs through recorded deeds naming the trust as grantee, the trustee's identity on those deeds, and litigation filings.

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Case Example: The Collectability Opinion

Scenario: A client holds a $310,000 judgment against an Orange County debtor. The investigator finds a residence recorded in the debtor's name, an LLC listing the debtor as manager, and a vehicle. The client asks whether to spend $20,000 on enforcement.

The analysis the client actually needs. The residence carries two recorded deeds of trust totalling $840,000 against an assessed value of $1.05 million, and the debtor is entitled to the CCP § 704.730 homestead exemption at the greater of the prior-year Orange County median capped at $600,000 or $300,000 — so a forced sale returns nothing. The LLC's Secretary of State record shows a suspended status under Revenue and Taxation Code § 23301, and a UCC-1 shows its equipment fully pledged to a lender. The vehicle is a 2019 model with a recorded lienholder.

The report. Gross apparent assets look substantial; net recoverable equity is close to zero on current filings. The recommendation is not "no assets" but "no unencumbered equity identified from public filings; recommend a CCP § 708.110 judgment debtor examination to reach deposit accounts and receivables, and a § 697.310 abstract recorded now to capture future equity." That is a truthful, useful, and defensible product — the opposite of the pretexted bank balance the client originally asked for.