Category Archives: Client Stories

Death and Dying

Posted on by

We have been dealing with a dying family member in my family recently.  Dealing with death every day I know the importance of organizing your affairs. However, seeing it up close reminds me of so many things you can do, before dying, to help your family. Here are a list of things. Thankfully in our case most of these were done by grandma Nancy before she passed early this morning.

- Make plans for cremation/burial, cemetery selection, etc… and pre-pay if you can. Your family will have enough on their mind so help them out and help make sure your wishes are followed.

- Have all your assets in your trust.

- Consider naming your trusted trustee as a co-trustee if you are elderly or very sick.

- Have an immediate power of attorney for dealing with everyday issues like the post office, the DMV, and the like.

- Make a list of personal property gifts or, if you are dying, just give the stuff to the people you want to give it to. See the joy on their face when they receive your treasures!

- If you know you are dying consider signing your car’s “pink slip” to make transfer easy and not require your family having to wait 40 days after death to transfer the car.

- Have a medical power of attorney or “living will” which details what you want done for life support.

- Talk to your family and your doctor about your end of life choices now so that they know what you want when the time comes.

- Oh ya, and MAKE SURE YOU HAVE AN EXPERIENCED ESTATE PLANNING ATTORNEY!

Searching for lost assets in California

Posted on by
Reply

In many of my California probate cases there are lost assets… or at least my client thinks there are lost assets. How do you track them down?  There are different ways but I am going to tell you about a real case I am working on right now.

When a person dies I advise my client to go through all the paperwork and bank records they can find to look for possible assets including bank accounts, stocks, life insurance, safe deposit boxes, etc…. Basically anything that indicates there might be an asset. I can then contact them and see if there is any record.

In one case, which will remain nameless as it’s still going on, my client found nothing.   However, the IRS claimed the decedent owed over $500,000 for back taxes.  We explained to the IRS that the decedent hadn’t worked for a few years and we didn’t believe he had any assets.  At that point we did sleuth step number 1… IRS TRANSCRIPTS.

I love IRS transcripts. I currently have two different cases where the IRS transcripts have been extremely useful.  They show all income reported to a social security number, the source (i.e. the bank), the amount, and a bunch of other useful information. In this case we were shocked by what we saw.  Tens of thousands of shares of stock being sold, for gains, over the course of a few years.  All one stock… GOOGLE.  I promise you this is true!  The decedent had, apparently, been buying and selling Google stock for a few years.  Most of the transactions were in 2007 and 2008 and there literally tens of thousands of shares sold. Apparently this crazy old guy and dumped all his money into Google at one point early on it appears!

Ok, so the IRS transcripts show tons of Google stock beign sold through one brokerage account. So sleuth step number 2 we subpoened the records for that stock broker to see what the decedent did with all his gains.  We received a few hundred pages from the stock broker and they show hundreds of thousands of dollars going to two different bank accounts.

Ok, I bet you can guess sleuth step number three… yes, subpoena the bank records.  My story ends here as we are just now preparing the subpoenas but we are curious what they will show.  Where did the money go from that account?  Once I find out I will report back as I am curious for sure.

There are other tools we can utilize but the above is a fair summary of the main things we can do. It takes some time, costs a little bit of money, but we can track down lost (or stolen) assets this way.  Plus, I have to admit, it’s sort of funny playing detective. I am genuinely interested in all my client’s dealings but this one has especially piqued my interest.

If you have questions about any California probate or trust matter please contact me or visit our website at www.californiaprobate.info for more information.

-John

Royalties and Estate Planning

Posted on by
Reply

I am sitting at my desk on this lovely Saturday morning which is not my norm. With nobody else here I have Pandora playing in the background. It got me thinking have these artists connected their royalties to their living trusts?

Hey, when you do estate planning for a living everything gets back to probate and estate planning in some way! 

So, let’s say you wrote a book, recorded an album, acted in a movie or whatever else it may be that created a residual or royalty. I have worked with many clients with these type of things. Am working with one right now who, interestingly, was the producer of some rather obscure rap music songs in the late 80′s or early 90′s. They were never huge sellers but they continue to sell… world wide. Sure at some point that trail may end but for now it continues and thus it’s important to get that into a trust.

If you don’t get your intellectual property rights into a trust it can be difficult for your family to get it after death. It can require a costly and long probate.

Here in California we have a lot of clients with royalties and residuals. Thus we are familiar with what is needed to get them connected to a trust.

Contact me to discuss your case personally or review our website at www.californiaprobate.info for more information.

-John

Divorce and Life Insurance in California

Posted on by
Reply

I was contacted today by a client whose father just died. It was a painful death and, even more sad, he is probably now rolling over in his grave to learn what I am typing. He never changed the beneficiary on his life insurance policy and it goes to… his ex-wife.

Ughhhh. I am happy to not know exactly what it’s like to get divorced but I have heard enough stories and I know of few people who would want their life insurance to go to their ex.

California does have probate code 5600 (quoted below for your information) which would allow the distribution to the ex-wife to potentially be stopped. The key is acting quickly before the life insurance company distributes the money. Once they distribute it you then have to figure out how to get it back which can be difficult… especially if the recipient spends it.

A good reminder to all is check your life insurance, 401k, IRA, and other death beneficiary designations. Don’t let your ex get a cent… unless you really want them to of course.

For more information about California wills, trusts, probate a

PROBATE CODE
SECTION 5600-5604 

5600.  (a) Except as provided in subdivision (b), a nonprobate
transfer to the transferor's former spouse, in an instrument executed
by the transferor before or during the marriage, fails if, at the
time of the transferor's death, the former spouse is not the
transferor's surviving spouse as defined in Section 78, as a result
of the dissolution or annulment of the marriage. A judgment of legal
separation that does not terminate the status of husband and wife is
not a dissolution for purposes of this section.
   (b) Subdivision (a) does not cause a nonprobate transfer to fail
in any of the following cases:
   (1) The nonprobate transfer is not subject to revocation by the
transferor at the time of the transferor's death.
   (2) There is clear and convincing evidence that the transferor
intended to preserve the nonprobate transfer to the former spouse.
   (3) A court order that the nonprobate transfer be maintained on
behalf of the former spouse is in effect at the time of the
transferor's death.
   (c) Where a nonprobate transfer fails by operation of this
section, the instrument making the nonprobate transfer shall be
treated as it would if the former spouse failed to survive the
transferor.
   (d) Nothing in this section affects the rights of a subsequent
purchaser or encumbrancer for value in good faith who relies on the
apparent failure of a nonprobate transfer under this section or who
lacks knowledge of the failure of a nonprobate transfer under this
section.
   (e) As used in this section, "nonprobate transfer" means a
provision, other than a provision of a life insurance policy, of
either of the following types:
   (1) A provision of a type described in Section 5000.
   (2) A provision in an instrument that operates on death, other
than a will, conferring a power of appointment or naming a trustee.

Sign Your Estate Planning Documents

Posted on by
Reply

I have two clients coming in this afternoon… hopefully I might add… to sign their estate plans. In both instances it has been over a year since we first met. Life is busy we all know but, in the end, there is no good excuse for not getting your estate plan done.

In both cases there are revocable trusts, wills, powers of attorney for financial affairs, health care directives, Hippa releases, general transfers, certified extracts and deeds to real estate. The one case also has an irrevocable life insurance trust in it. The bottom line is these are very important legal documents that are needed.

In some cases the above documents are needed to avoid estate taxes and in all cases they are needed to avoid probate Court. You can not avoid probate Court after death so sign your documents before death!

My theory is your estate plan may not be 100% perfect for you today as you might still be debating about certain issues but it’s 100% better than having no signed documents!  Get it done and then amend it as you think of changes to make. I do not charge for changes during the first year after signing.

Call or email me with questions regarding your estate plan.  Or visit our webpage for more information at www.californiaprobate.info

-John

Professional Fiduciaries

Posted on by
Reply

Last week I had a professional fiduciary named as Administrator in one of my probate cases here at the Sacramento county probate Court.  Professional fiduciaries are a great choice to serve as administrator when there is fighting, or potential fighting, between family members. They are licensed by the state and can be bonded. In fact, there is a whole list of them at www.pfac-pro.org which serves all of California.

In this case the siblings get along ok but nobody could agree who should serve as administrator of their dad’s estate. Rather than have to face the issues of who trusted (or didn’t trust) who we opted to go with the professional. I think this is going to work out for everybody.

The cost is not great as the professional fiduciary gets the same administrators fee as laid out in the probate code that any administrator would get. That is, the professional gets paid the same as the family member would get. It thus makes great economic sense to use a professional! 

I guess the key here is don’t let potential in-fighting delay the start of probate.  Get someone going so the 7 month probate clock starts ticking!

I will paste all of that probate code section below.

Call or email me with questions or visit our probate website at www.californiaprobate.info

-John

California Probate Code Section 10800

(a) Subject to the provisions of this part, for ordinary
services the personal representative shall receive compensation based
on the value of the estate accounted for by the personal
representative, as follows:
   (1) Four percent on the first one hundred thousand dollars
($100,000).
   (2) Three percent on the next one hundred thousand dollars
($100,000).
   (3) Two percent on the next eight hundred thousand dollars
($800,000).
   (4) One percent on the next nine million dollars ($9,000,000).
   (5) One-half of one percent on the next fifteen million dollars
($15,000,000).
   (6) For all amounts above twenty-five million dollars
($25,000,000), a reasonable amount to be determined by the court.
   (b) For the purposes of this section, the value of the estate
accounted for by the personal representative is the total amount of
the appraisal value of property in the inventory, plus gains over the
appraisal value on sales, plus receipts, less losses from the
appraisal value on sales, without reference to encumbrances or other
obligations on estate property.

The Perfect Estate Plan

Posted on by
Reply

“I am not quite ready to sign my estate plan becuase… [insert excuse here].”

I hear this almost every day. The problem is there is NEVER a perfect time to do your estate plan nor is there ever a perfect estate plan. There are good times and bad times but there is NO perfect time! Likewise there are good plans and there are bad plans but there is simply NO perfect plan!  There is always something.

My theory is if we get your estate plan pretty darn close to perfect then SIGN IT! I have a policy of not charging for changes during the first year after signing it so call me next month and we will tweak it. The problem is stuff happens and while you are waiting for everything to be perfect something very imperfect can happen… like the “unexpected” death.

While you are waiting for every duck to line up exactly right you die and leave your family a mess! You cause them to go through probate, unnecessary taxes, and in some cases even a distribution that is not at all what you wanted!

In my short 43+ years on this earth I have learned there is really no “unexpcted” death becuase any one of us can die today or live until we are 110. It’s just impossible to know when your time is up. Sure certain people have better odds of living longer than others but any of us can get hit by a car today!

Thus it gets me back to my clients who wait until everything is perfect. They have finished their taxes, their kids are off to college, they have no doctors appointments to go to, they have no company visiting from out of town, no vacations, they have all their assets in financial institituions they like, they aren’t trying to sell their house, they aren’t in a fight with their sister, and the list goes on.

The problem is there is always something that makes life imperfect and thus provides a potential excuse to completing your estate plan. As stated above I will change your estate plan for no additional charge for one year after you sign your new estate plan. Yes, 367 days is ok! 

Get your estate plan done, get your trust funded, and then tweak it if you want. However, do not wait for the perfect time and the perfect documents!

Can't I just give the house back to the bank?

Posted on by
Reply

Talk about a loaded question!  Just the other day I was talking to a client, in a probate case, and she asked this question of me. It really is a loaded question though.  YES, you “can” just give it back BUT….

Let me start by saying there is simply no one size fits all answer to this question. Each case needs to be looked at individually as different facts create different answers.  The issues I am concerned about include: are there other assets, how upside down is it, is it a purchase money mortgage or a re-fi, is there a second mortgage or line of credit, and the list goes on. 

Let’s take the fact pattern of the client who asked me the question shall we!? In Joan’s case the house is approximately 20% underwater. That is, the house is worth about $500,000 and the mortgage (a re-fi) is about $600,000.  In Joan’s probate matter there ARE other assets that’s a key issue.

First of all I would put the mortgage company on my list of creditors and send them notice to force them to file a creditor’s claim. Most of them won’t file that claim and it’s my position that this will make it extremely difficult for them to make a claim for a deficiency judgment against the other probate assets.

Second I would offer the bank a “deed in lieu” which is a deed in lieu of foreclosure. Put another way that means I would offer to deed the house back to the bank and agree that the bank would not foreclose and not go after a deciency amount. In my experience most banks will not take deeds in lieu in probate but it’s worth asking about.

If they the bank says no to the deed in lieu I would then consider doing a probate code 10360 mortgage cram down.  Most likely your probate attorney doesn’t know about this code section but before they tell you to walk away from the house or do a traditional “short sale” tell them to read California Probate Code sections 10360 et seq.  Tell your attorney that a probate expert says they should understand 10360 and it’s potential benefits to the estate and, most importantly to you, to the administrator of the estate!

Ok, so what is PC 10360? It is a second that allows you to get a Court order which requires the bank to release the mortgage lien for less than the mortgage in an amount necessary to pay costs of administration related to the real estate.”  It works best when there are no other assets but it can work in cases with other assets. In any event it works as a forced short sale which allows the house to be sold and thus the probate closed.

In a case with no other assets it actually can move money from going into the bank’s pockets and instead put that money into your pocket!  Yes, you read that correctly. I did one of these recently in Marin county where I was able to get $13,000 out of an upside down house into my client’s pockets! 

The key with upside down real estate is to work with a probate attorney who knows all of the options. Do not settle for an attorney that says they do probate but instead find a probate attorney!

-John

I have no family what do I do….

Posted on by
Reply

I wasn’t sure what to write about today.  To come up with an inspiration I just looked at my calendar to see what clients I have met with this week. Just yesterday’s clients gave me 3 good ideas. I am going to tell you about my meeting with a man we will call Tom.  Of course that is not his real name. 

He arrived early as he had taken the bus to see me.  He told me he was not a wealthy man but he had two main concerns: 1) who would get his treasured collection of classical music and books and 2) what would happen to him if he were on life support?

See Tom has absolutely no family around here.  He has one sister, on the east coast, and no other family members.  In fact, he doesn’t have a lot of friends. He is retired, lives in an apartment, and listens to classical music. As he told me, “his books and music are his friends.”  He was an incredibly interesting guy to talk to by the way. Anyway, with no family he has two problems: 1) who should he give his stuff to and 2) who should make decisions for him when he can not do it any longer?

The first was relatively easy.  Tom told me he didn’t want someone to receive his prized possessions who wouldn’t cherish them like he does.  He said, “what do you think about giving it to the library?”  I told him that was a fabulous idea.  We looked it up on-line and the Sacramento Public Library has a foundation to receive gifts called the Sacramento Public Library Foundation.  While I am sure they prefer cash gifts it sounds like Tom’s treasures will supply our local libraries with tons of great cd’s, dvd’s, and books.  Of course, the people who check them out will cherish the use of these items.  That’s a win-win!

Ok, now the harder question… who should make decisions for him?  His sister being so far, and elderly herself, he didn’t feel she made good sense. Having no close friends his choices were limited.  I explained how private professional fiduciaries work and he thought that sounded great.  For more information you can go to www.pfac-pro.org 

Professional fiduciaries are licensed professionals who have the job of taking care of your affairs (financial, personal and medical) when you can no longer do it when you don’t have anybody else. They are simply great for people like Tom without family or friends.  We selected a few that I knew and trusted. That way there are back-ups in case the first or second choices aren’t available. Problem solved!

Tom is not my typical client as most of my clients tend to be financially wealthier or have young children they want to protect. However, we are always happy to meet with you to talk about simple wills, powers of attorney for financial affairs and powers of attorney for medical. The cost is not great and we can give you great peace of mind.

Call or email me to discuss!  -John

Remote Control

Posted on by
Reply

You live nowhere near Sacramento but you have a legal issue here. How would that work?  Some common reasons people, who live elsewhere, hire us to do legal work are: 1) mom/dad/relative/friend died in the Sacramento area and you need a probate attorney here to handle that for you and 2) your mom/dad/relative/friend lives here and you want them to hire a local attorney to handle their estate planning affairs before they die. In either case we are well suited to help you!

First thing’s first… does this attorney you might hire, remotely, have the legal knowledge and experience to take care of your legal needs.   In my case I am a Certified Specialist in estate planning, trust and probate law which means I took a second bar exam only in these areas of law. Also, I have been rated “AV” by Martindale Hubbell (lawyers.com) which is the highest rating they offer.  Lastly, I have thousands of satisfied clients I have helped! Ok, check that off and move to the second important issue….

Besides legal knowledge and experience the next biggest issue when hiring an attorney is communication!  That is, will your attorney reply to your phone calls, emails, faxes and letters in a timely fashion?  I pride myself on being extremely fast to return all communications.  Often email is best as I can reply when my meeting ends without trading voice mails. However, I am good to communicate by whatever medium you prefer.

When a client contacts me I typically reply within 1-2 hours.  Occasionally I have back to back to back meetings making it impossible to reply that fast but that is very rare.  Test it out… go send me an email right now on the email link. I’ll reply fast I promise!  Likewise, I keep lines of communication with opposing counsel and/or the Court up to aid in your case moving faster!  My goal is CUSTOMER SATISFACTION and contact is a very big part of that.

Lastly, I have clients throughout the world so am used to dealing with remote issues.  Luckily FedEx, email and the ease of scanning/printing documents has made national and even international legal representation really easy! In fact, it really does not matter if you are down the street or in a far flung corner of the world… I can communicate with you and get the documents done quickly!

For example, I have represented a woman in Romania the last couple of years. Her dad died in Sacramento and she wanted me to monitor his probate proceedings and ensure she got her inheritance.   Using email, the scanner and DHL shipping we were always able to quickly get documents for filing within days. The distance really was not an issue.

I have a case with an attorney in San Francisco right now and he does not even use email.  No that’s not a joke. I have to send him faxes.  Fax machines are almost as obsolete as the typewriter. I know you young kids don’t even know what that is do you!?  Ask your parents… or grandparents!

The bottom line is if you are looking to hire an attorney remotely find someone knowledgeable as well as someone who can communicate with the modern technologies.  I am here, ready, willing and able to serve as your remote control attorney!

-John