Notifying the California Department of Health Services of a death

How does one go about notifying the California Department of Health Care Services (aka: “Medi-Cal”) of the death of a friend or loved one? You can have an attorney help you or just go to this handy link on their website.

Once there click on NOTICE OF DEATH.

Another screen is brought up where you put in a whole host of information about you, the decedent, their assets, etc….  Just fill it all in, honestly of course, and then wait for Medi-Cal to get back to you.

Don’t forget Medi-Cal generally will take a back seat to other costs of administration in a probate. So a large Medi-Cal bill does not mean you should just walk away from a piece of real estate. We can often get our client’s MONEY IN THEIR POCKET. Medi-Cal just wants the house sold and are ok to get paid after probate. The key is talking to an experienced probate attorney.

If you want to talk about Medi-Cal claims, probate, or any related subjects please contact us.  -John

 

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Special Letters of Administration and Mortgage Companies

“My husband died and the mortgage company won’t talk to me.”

This is becoming a common statement that I hear. Mortgages and the actual deed to real estate are NOT connected. They are separate.  So, for example, if a spouse dies with a house in their name the other spouse can often use a “spousal property petition” to transfer assets to themselves without going through a full probate. However, the mortgage, or encumbrance against the property, does not transfer with the “deed” or title.

What?

Say it isn’t so Mr. California Probate Lawyer!

It’s true.

Plus, mortgage companies are making it more and more difficult to communicate with them after death. Sure I have known of people who have pretended to be the decedent and that can last for years but eventually that will stop working. Plus it’s not legally correct to do that!

I recently encountered an interesting situation. Mom and son were thoughtful enough to prepare a deed, before mom died, to transfer her home to her son.

Now, since you read my blog you know this might have negative tax ramifications after death but, putting that aside, it avoided probate so in general it’s fine. However, the mortgage company really doesn’t care about the deed transfer. They do not care because the deed transfer is completely separate from the underlying mortgage. The client wants to talk to the mortgage company about a loan modification.  The mortgage company won’t talk to him since mom is dead. This is truly a problem.

What can be done?

Rightfully so the client wants to avoid a full probate. I do believe a full probate can be avoided. The answer is Letters of Special Administration.

Letters of Special Administration is basically a limited probate. It’s limited to whatever is specified in the petition. The more limited it is the more likely the court will approve it. We thus may ask for limited powers to communicate with XYZ Mortgage Company regarding loan 1234. Or maybe we will ask for general powers related to real estate.

See California probate code 8544 below:

8544. (a) Except to the extent the order appointing a special
administrator prescribes terms, the special administrator has the
power to do all of the following without further order of the court:
(1) Take possession of all of the real and personal property of
the estate of the decedent and preserve it from damage, waste, and
injury.
(2) Collect all claims, rents, and other income belonging to the
estate.
(3) Commence and maintain or defend suits and other legal
proceedings.
(4) Sell perishable property.
(b) Except to the extent the order prescribes terms, the special
administrator has the power to do all of the following on order of
the court:
(1) Borrow money, or lease, mortgage, or execute a deed of trust
on real property, in the same manner as an administrator.
(2) Pay the interest due or all or any part of an obligation
secured by a mortgage, lien, or deed of trust on property in the
estate, where there is danger that the holder of the security may
enforce or foreclose on the obligation and the property exceeds in
value the amount of the obligation. This power may be ordered only on
petition of the special administrator or any interested person, with
any notice that the court deems proper, and shall remain in effect
until appointment of a successor personal representative. The order
may also direct that interest not yet accrued be paid as it becomes
due, and the order shall remain in effect and cover the future
interest unless and until for good cause set aside or modified by the
court in the same manner as for the original order.
(3) Exercise other powers that are conferred by order of the
court.
(c) Except where the powers, duties, and obligations of a general
personal representative are granted under Section 8545, the special
administrator is not a proper party to an action on a claim against
the decedent.
(d) A special administrator appointed to perform a particular act
has no duty to take any other action to protect the estate.

The highlighted portion above is key as it should allow the Special Administrator to deal with the mortgage company and figure out a plan for the mortgage.

Fees in special administration cases are by agreement of the parties. The typical statutory probate fee schedule does not apply. I generally offer these on a flat fee basis to give the client’s the most certainty and avoid surprises.

I should add that special letters can be used in many other situations such as accessing bank accounts to pay mortgages and funeral expenses, investigate safe deposit boxes, and more. The key is getting the court order so it’s all legal!

-John

Starting probate as a creditor

I have a new case where the decedent’s son contacted me about starting a probate. He wasn’t quite ready as he had other things going on in life. Well, last week he called, in a panic, because one of his mom’s creditors had started probate! That’s right. A creditor, in a California probate, can start the probate process for you whether you like it or not.

In most probate cases it’s better to be in control. There are a variety of reasons for that which is beyond the scope of this post. However, trust me, control is good in probate!

With a creditor’s claim you lose your leverage to negotiate. Think about it. If a creditor is in the driver’s seat it’s a lot harder to suggest they take a haircut on their claim. Plus there are likely going to be added costs.

We can salvage the situation by paying the creditor and then filing our probate case. The creditor has been pretty easy to work with to clean it up but still… why get to this position?

Don’t let this happen to you. Start your probate before someone does it for you.

Oh ya, guess how much the creditor’s claim was for? Only $6,000. That’s right they started probate over a $6,000 creditors claim. Don’t let this happen to your probate case!

Sacramento Probate Court Continuances

I pride myself on rarely having to seek continuances in probate court. That is, I try to be prepared and take care of my business BEFORE the court date so as to avoid continuances. Historically continuances, in Sacramento county, have been 4 weeks out.  I am speaking of the Sacramento probate court when I say Sacramento county. Each county is a little different of course but the trend is being seen in most counties of California as I work throughout the state.

The last year, or so, it’s been moving toward 6-8 weeks at times in Sacramento. Today, I had to ask for a continuance in a case as there are some heirs who want more information. The court date is too close (next week) and thus a continuance was agreed to so we could answer all of their questions. Ok fine but guess what… the case just got delayed THREE MONTHS.

Yes, the next available continuance day after the January 8, 2014 hearing is April 8, 2014. Let me repeat… THREE MONTHS!

As I have stated before if you do a probate case yourself or hire an inexperienced attorney you face an increased risk of a continuance. If a continuance is three months that means your case will be at least 3 months longer than it need be. Plus, it can happen again, and again, and again….  Before you know it your probate case takes a year longer than it should. Forget the rest and hire the best from day one!

 

 

Does a legal separation cut off inheritance rights

A prospective client asked me this question the other day and I said I didn’t know the answer off hand. Sort of funny that I didn’t know as I have been doing this since 1994. That is, I have focused my law practice on estate planning, trust and probate law for all these years. During that time I have been asked some pretty arcane questions so you would think a straightforward question would be easier to answer. Not always….

The first question is will or no will!?

That is, if a person has a will and there marriage ends by divorce any provision to the ex-spouse is nullified by the divorce. That is, the ex gets nothing just like most people would want.  See California probate code section 6122 below.  In particular look at section (d). It very clearly indicates that the key is to look at the legal separation paperwork.  See California state form FL-100. This is the petition for dissolution OR legal separation.

Also, look at probate code 78 (pasted below). It defines “surviving spouse” (the key component in many inheritance laws) and clearly does NOT specify legal separation.

I thus conclude a legally separated individual CAN inherit from their “ex” spouse after death!

Good luck to you!  -John

California Probate Code 6122. (a) Unless the will expressly provides otherwise, if after executing a will the testator’s marriage is dissolved or annulled, the dissolution or annulment revokes all of the following:
(1) Any disposition or appointment of property made by the will to
the former spouse.
(2) Any provision of the will conferring a general or special
power of appointment on the former spouse.
(3) Any provision of the will nominating the former spouse as
executor, trustee, conservator, or guardian.
(b) If any disposition or other provision of a will is revoked
solely by this section, it is revived by the testator’s remarriage to
the former spouse.
(c) In case of revocation by dissolution or annulment:
(1) Property prevented from passing to a former spouse because of
the revocation passes as if the former spouse failed to survive the
testator.
(2) Other provisions of the will conferring some power or office
on the former spouse shall be interpreted as if the former spouse
failed to survive the testator.
(d) For purposes of this section, dissolution or annulment means
any dissolution or annulment which would exclude the spouse as a
surviving spouse within the meaning of Section 78. A decree of legal
separation which does not terminate the status of husband and wife is not a dissolution for purposes of this section.
(e) Except as provided in Section 6122.1, no change of
circumstances other than as described in this section revokes a will.
(f) Subdivisions (a) to (d), inclusive, do not apply to any case
where the final judgment of dissolution or annulment of marriage
occurs before January 1, 1985. That case is governed by the law in
effect prior to January 1, 1985.

 

California Probate Code 78. “Surviving spouse” does not include any of the following:
(a) A person whose marriage to the decedent has been dissolved or
annulled, unless, by virtue of a subsequent marriage, the person is
married to the decedent at the time of death.
(b) A person who obtains or consents to a final decree or judgment
of dissolution of marriage from the decedent or a final decree or
judgment of annulment of their marriage, which decree or judgment is
not recognized as valid in this state, unless they (1) subsequently
participate in a marriage ceremony purporting to marry each to the
other or (2) subsequently live together as husband and wife.
(c) A person who, following a decree or judgment of dissolution or
annulment of marriage obtained by the decedent, participates in a
marriage ceremony with a third person.
(d) A person who was a party to a valid proceeding concluded by an
order purporting to terminate all marital property rights.

What can I expect at my upcoming probate Court date?

INTRODUCTION

I get asked this question a lot.  ”What can I expect at my upcoming probate Court date?”  Or, “how soon after my Court date will I have letters testamentary?”  Or even, “do I need to be at my Court date?”

COURT ATTENDANCE

Let me start with the last one… NO. Generally speaking there is no need for you to be at the probate Court hearing. The only exception is if the matter might be contested. In those cases your appearance is a good idea if you are local… or you can “appear” telephonically if you are far away.

IMMEDIATELY AFTER THE HEARING

In some counties they process the court documents right away. In those courts we can get the documents the same day.  Others take a month to process. You just don’t know as each court is different and most courts are not consistent.

FLY ON OUT?

Clients ask if they should fly out right after the Court date to start taking care of business.  Based on the above inconsistency I encourage clients, from out of state, to not fly in until we have the documents in hand.

CONCLUSION

Be alert and aware of your court date but be patient. Unfortunately no matter how prepared your attorney is delays can happen. The chance of delays is reduced when hiring an experienced and organized attorney but things happen!

The Issue of the predeceased spouse

INTRODUCTION

A little known area of California probate law relates to the issue of predeceased spouse. That is, the children of the first spouse to die. In some cases they have an interest when the second spouse, their “step-parent,” dies. This post is loosely based on a real case but, of course, the facts changed to protect the privacy.

FACTS

My client’s mom died in 2012. Mom died with no will. She had 2 children. Mom had been married to step-dad for about 15 years. They owned a home together among other things.  Step-dad just died. He has no children but has some other relatives.

THE LAW

It’s a little known law that in some cases the children of a predeceased spouse actually receive something from the probate estate when the second spouse dies with no will (i.e. intestate succession).  You start the analysis with California probate code 6402 which provides, in part,

“6402. Except as provided in Section 6402.5, the part of the
intestate estate not passing to the surviving spouse or surviving
domestic partner, as defined in subdivision (b) of Section 37, under
Section 6401, or the entire intestate estate if there is no surviving
spouse or domestic partner, passes as follows:
(a) To the issue of the decedent, the issue taking equally if they
are all of the same degree of kinship to the decedent, but if of
unequal degree those of more remote degree take in the manner
provided in Section 240.
(b) If there is no surviving issue, to the decedent’s parent or
parents equally….”

Notice it says “EXCEPT AS PROVIDED IN SECTION 6402.5…” What does 6402.5 say? It provides as follows:

“6402.5. (a) For purposes of distributing real property under this
section if the decedent had a predeceased spouse who died not more
than 15 years before the decedent and there is no surviving spouse or
issue of the decedent, the portion of the decedent’s estate
attributable to the decedent’s predeceased spouse passes as follows:
(1) If the decedent is survived by issue of the predeceased
spouse, to the surviving issue of the predeceased spouse; if they are
all of the same degree of kinship to the predeceased spouse they
take equally, but if of unequal degree those of more remote degree
take in the manner provided in Section 240….”

MECHANICS

Ok, so this appears to give the children of the first spouse a 1/2 interest in step-dad’s estate. However, how does this get done? What happens? Well, that’s where having a lawyer comes in handy!  A lawyer can help to protect the rights of the issue of the predeceased spouse. The attorney can make sure that the family of the step-dad do things right!

CONCLUSION

Hire an attorney to monitor a probate. An experienced probate attorney can protect your interests!

 

Pretermitted Spouse in California

INTRODUCTION

The #1 reason why you should review your estate plan when you get re-married is to avoid the pretermitted spouse problem.

GENERALLY

California law, at probate code section 21610-21612, (which I will paste below for easy reference) presumes that a person wants to provide for later born children and/or later married spouses. It’s just fundamental black letter law in California and most states.  This is because the majority of people do not prepare an estate plan.  So, the California legislature jumped in with this law.  Today we will focus on the pretermitted spouses.  In a former blog post I spoke about the pretermitted child issue.

HOW IT WORKS

If a person prepares his or her last will or trust AND THEN MARRIES these laws kick in.  If this happens the new spouse is a “pretermitted spouse” and is entitled to a set percentage of the estate BY LAW. If the decedent has no kids then the spouse gets 100% of the assets. If one child the spouse gets 50%. If two or more children the spouse gets 33.3%. Basically, it works in conjunction with the laws of intestacy (i.e. a person dying with no will or trust).

IN REAL LIFE

Let’s look at a real life hypothetical.  Let’s say the decedent creates a trust in 2008. At that time he is single with two kids. Let’s say he has $145k in assets in the name of the trust. Then in 2009 he gets remarried. Let’s assume he does not amend his trust after marriage.  At the decedent’s death his wife is entitled to a statutory share of this trust.  In this case the spouse would be entitled to 1/3 and the other 2/3 would be given away by the trust.

The above assumes the trust can be found. What if the trust can not be found?  Obviously this creates a huge other issue from the standard pretermitted spouse case. First question is if the trust language can be established?  Can the drafting attorney be found? If so, even if he doesn’t have a copy of the trust he can testify from his file notes and/or recollection. That is, to help establish the terms of the trust and how the 2/3rd to the family should be distributed and who should be the trustee.

However, if the drafting attorney can not be found then the 2/3rd would be distributed by the laws of intestacy.  In this case each of the two children would receive 1/3 of the total.  So, in conclusion the spouse and each kid would each receive approximately $50,000.

CONCLUSION

If you get re-married go meet with your attorney immediately to review your estate plan!

 

 

CALIFORNIA PROBATE CODE SECTION 21610-21612

21610. Except as provided in Section 21611, if a decedent fails to
provide in a testamentary instrument for the decedent’s surviving
spouse who married the decedent after the execution of all of the
decedent’s testamentary instruments, the omitted spouse shall receive
a share in the decedent’s estate, consisting of the following
property in said estate:
(a) The one-half of the community property that belongs to the
decedent under Section 100.
(b) The one-half of the quasi-community property that belongs to
the decedent under Section 101.
(c) A share of the separate property of the decedent equal in
value to that which the spouse would have received if the decedent
had died without having executed a testamentary instrument, but in no
event is the share to be more than one-half the value of the
separate property in the estate.

 

21611. The spouse shall not receive a share of the estate under
Section 21610 if any of the following is established:
(a) The decedent’s failure to provide for the spouse in the
decedent’s testamentary instruments was intentional and that
intention appears from the testamentary instruments.
(b) The decedent provided for the spouse by transfer outside of
the estate passing by the decedent’s testamentary instruments and the
intention that the transfer be in lieu of a provision in said
instruments is shown by statements of the decedent or from the amount
of the transfer or by other evidence.
(c) The spouse made a valid agreement waiving the right to share
in the decedent’s estate.
21612. (a) Except as provided in subdivision (b), in satisfying a
share provided by this chapter:
(1) The share will first be taken from the decedent’s estate not
disposed of by will or trust, if any.
(2) If that is not sufficient, so much as may be necessary to
satisfy the share shall be taken from all beneficiaries of decedent’s
testamentary instruments in proportion to the value they may
respectively receive. The proportion of each beneficiary’s share that
may be taken pursuant to this subdivision shall be determined based
on values as of the date of the decedent’s death.
(b) If the obvious intention of the decedent in relation to some
specific gift or devise or other provision of a testamentary
instrument would be defeated by the application of subdivision (a),
the specific devise or gift or provision may be exempted from the
apportionment under subdivision (a), and a different apportionment,
consistent with the intention of the decedent, may be adopted.