Category Archives: Probate

Getting your probate case approved in Court

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Introduction

I was on a CourtCall today appearing live, though by telephone, in the Lake County probate Court.  As I waited my turn to speak to the Judge I thought about what everybody does while waiting for a probate Court hearing to start…

lake.county.court 300x225 Getting your probate case approved in Court

I daydreamed about what I had done to be ready for today’s hearing and how that would make for a great blog post.  That is, as I semi-listened to make sure my case wasn’t called, I confirmed to myself all of the things that I had done to improve the odds of my matter being approved today and not being delayed.


Before filing

Before even filing one document I am thinking ahead. Where are potential threats?  In this case, I realized, my client lives out of state. Any time you have an out of state Administrator or Executor the Court has discretion to impose the requirement of a bond. That is, the probate Judge decides if there will be a bond or not. This is just one example of the type of thing I think about BEFORE filing the petition for probate. If you want more information about surety bonds here is a link to a bond application for a California probate case.

Before the Court Date

So once you have a Court date then what? Again we try to think ahead! First of all we make sure all the procedural matters get done on time. A probate is like a high hurdles race so plan ahead before each hurdle arrives!hurdles.probate 300x225 Getting your probate case approved in Court

- we publish in a local newspaper of general circulation;

- we send notice of hearing to all entitled to notice;

- we send the proposed order to the Court;

- we checked for calendar notes.

On the Court Date

The morning of the Court hearing I always review my file to make sure I am familiar with the basic facts. I do not want to be surprised if the Judge asks me a question. I am the attorney for the proposed Executor so I really should know the answer to any question the Judge asks. lake.county.court 300x225 Getting your probate case approved in Court

After the Court Date

Once Letters Testamentary issue it is on like Donkey Kong! It is time to take action and get the probate MOVING… and working toward the next probate Court hearing date!

-John Palley

Anytime you need a probate and estate planning attorney for matters anywhere in California contact John Palley.  A Certified Specialist in Estate Planning, Trust and Probate Law as determined by the State Bar of California Board of Legal Specialization.  Contact by phone 1.800.965.1106 or email: john@californiaprobate.info

Selling A Home In Probate?

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How to respond to the Notice of Proposed Action

john palley probate services 300x200 Selling A Home In Probate?You have received a notice of proposed action in a probate real estate sale… now what do you do?  You have options.

Generally the notice says that you have until a date (15 days after the notice is mailed) by which you must object to the sale terms. In fact, you can object until escrow closes, even if after 15 days, but better to object right away in most cases.

So you can object, consent or do nothing.

Should you object?  Each case is different.

The Possible Result of an Objection

By objecting you create a Court auction. A Court auction costs money. There will be Court costs (likely close to $500 to file the petition to confirm the sale) and attorney fees (the probate attorney is entitled to extraordinary fees for work done related to real estate sales). For example, if you are a 50% beneficiary of an estate each dollar spent is coming half out of your pocket. To ballpark it let’s say it costs $3,000 between fees and costs to do a petition to confirm sale that would mean $1,500 coming out of your pocket.

Will the probate Court auction earn more money?  Sometimes yes and sometimes no. In my experience the majority of cases do NOT get overbids at Court and thus the first bid is ultimately sold to at the original price.

Worse yet, especially in recent years when the real estate market was falling, many deals fell out of escrow when a Court auction was created. However, things are better now and that’s less likely. A concern still though.

On the other hand maybe by objecting the executor of the estate will go back to the buyer and try to get a few thousand more if that will satisfy you. Life is a negotiation!

Can you do anything to encourage more bids at Court? The Court auction is literally a public auction governed by the probate Judge. Anybody can show up and bid. Advertising in a legal newspaper is required but that only gets investors who actually read those ads. If you want real buyers you need to tell Realtors, tell friends, take out pretty ads in the real estate section of the paper, etc…. Marketing 101!

At the end of the auction the Judge says “going once, going twice… SOLD.”

In the end, as stated above, each case is different.

Let’s talk about YOUR case specifically!

-John Palley

Cleaning up estate plan messes after death

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“I can get a trust done for $500, on the back page of Rolling Stone magazine, so why should I pay you $2,000?”

My answer is simply, “we will find out after you die how good your five hundred dollar estate plan is.”

I mean that with all sincerity. It MIGHT be just fine. On the other hand I have seen some horrendous trusts ($500 or more) that I have had to clean up after death. Some so-called “estate planning attorneys” create huge messes after death with poorly written and poorly executed documents.

Get it done right before you die so your family doesn’t have to deal with this!

On the other hand, if you are reading this blog after a loved one has died you have come to the right place. We clean up bad estate plans, after death, all the time!

Cleaning up a bad estate plan after death usually requires much more work and much more money than if things had been done right in the first place. However, I have seen so many bad estate plans I have had a lot of experience cleaning them up.

There are many different alternatives for cleaning up messes.  The most common fixes to estate planning messes:

1) Heggstad petition to get assets into the trust.

2) Petition for succession to real property worth less than $150,000.

3) Probate code 13100 small estate affidavits for personal property.

4) Spousal property petitions when one spouse dies.

5) Full probates in the worst messes.

Contact me to discuss how we can best clean up the mess you find yourself in!

-John Palley

Real Property Transfers After Death and The Tax Assessor’s Office

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It sometimes seems that the real estate transfer forms which are required in a California probate do not work together. This is true. There are multiple systems working together and thus problems persist. You have the Courts, the assessor’s office, and the recorder’s office. Let me explain each one:

STEP ONE: The Inventory and Appraisal form (California form DE-160) is required to be filed within 4 months of letters issuing (Probate code 8800).  On that inventory it states that you HAVE notified the county, where any real estate was owned by the decedent, that the decedent died.

STEP TWO: Pursuant to step one we have to notify the county of death. That is done by filing an Estate Change in Ownership form (available on county assessor websites throughout California). This form indicates who the anticipated recipients are of the real estate. This of course is not always known.

STEP THREE: In response to receiving the Estate Change in Ownership form the county assessor’s office will likely generate a Parent to Child Exclusion form (available on county assessor websites throughout California – BOE-58). It technically needs to be filed within 3 years of death (and also BEFORE ANY SALE TAKES PLACE) but the county assessor usually requires it within 2 weeks and will re-assess if not received. The problem is that supporting documents are supposed to be filed with the Parent to Child form but we won’t have those until the probate is over.

STEP FOUR:After a petition is filed to end the probate a Court Order is received which distributes the property. The Court Order says who receives the real estate. It may be different than indicated above because things can change. If that happens you should do an “amended” Parent to Child Exclusion form.  The Court Order is recorded in the county Recorder’s office.  The Court Order should plainly spell out the address, APN number and legal description of the property. Also, the Court Order should plainly indicate who is to receive that property.

STEP FIVE: With the recording of the Court Order you should also send in a Preliminary Change of Ownership form. The “PCOR” is available on most county assessor websites in California. It’s important to file this, even if not technically required,” because it’s the tax assessor who sends out tax bills. If they don’t update their records a problem can ensue with a confused “ownership” of the property.

STEP SIX: The final, and optional, step is to record an Executor’s Deed. This just repeats what the Court Order says but sometimes is easier to get the legal “ownership” records changed.

If you have questions about any of the above let me know!

-John B. Palley

Probate process from start to finish

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Today I will be speaking to a group of paralegals at the Sheraton in downtown Sacramento on the probate process from start to finish. Here is a summary of the outline. If you want my full outline just ask and I’d be happy to share it!  -John

  1. HOW TO FILE AN ESTATE IN PROBATE COURT 9-9:45 John Palley
  1. Distinctions Between the Modest and Larger Estate
  2. The Estate Timetable and What Needs to Be Done
  3. Steps for Proving the Will
  4. Steps for Challenging the Will
  1. WORKING WITH EXECUTORS AND ADMINISTRATORS 9:45-10:30 John Palley
  1. Duties of Executors or Administrators During the Probate Process
  2. Paralegal Contact With Executors or Administrators
  3. How Misconduct and/or Removal of Executors or Administrators is Handled
  4. Compensation
  5. Special Administration
  6. Duties of the Attorney for the Executor – Who is the Client?
  1. HOW TO PREPARE AND FILE THE INVENTORY 10:45-11:45
  1. ADMINISTRATION OF THE ESTATE 12:45-1:30
  1. Creditors, disclaimers, cash management
  1. ETHICAL PERILS IN THE PROBATE PROCESS 1:30-2:30
  1. Ethics and avoiding malpractice
  1. DEALING WITH SPOUSE’S ELECTIVE SHARES 2:45-3:30
  1. Homestead, family allowance, and other under utilized tools
  1. UNDERSTANDING THE LAWS OF INTESTACY 3:30-4

A. Who gets what when if there is no will

VIII.CLOSING THE ESTATE 4-4:30

  1. Final accounting and ending the case

Continuances in Probate Court

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Why do you or your lawyer sometimes want or need a continuance in your probate Court?

There are some cases where a continuance is needed. For example, I am appearing today, via CourtCall, in Los Angeles Superior Court to ask for a continuance on a case.  The case is extremely complicated and we have not been able to supply enough information to the Court for them to approve our petition. Though it’s likely the Judge may not grant it, in the end, there is no harm in getting a continuance to re-evaluate the options.

There are other cases where a continuance is a good idea for various reasons. Sometimes it’s a strategic thing where there is a reason to slow the case down. Or maybe it’s a cautious thing to make sure that every last tax issue is solved and every last creditor is resolved. Occasionally there are wild cards and thus a continuance is good to clear the air.

Is a continuance a bad thing?

In my opinion a continuance is rarely a bad thing. Yes, there are times when the attorney has made a mistake and yes that would be a bad thing. However, more typically it’s because the Court needs more time to review, the Court wants to give opponents time to file objections or the Court wants you to beef up your case regarding particular issues.

Do you have control over the decision?

Usually. I say usually because most often it is the client’s decision to get the continuance. However, when the attorney is not able to get the client’s desires then they typically will make the decision for them. A continuance is always safer than letting the Judge rule against you!

Can a continuance be had merely by a person showing up in Court and asking the Judge?

Sometimes. You never want to rely on this as there are some Courts who will not grant the continuance merely by the request of an objector. Thus you may need to file something in writing which would likely create the need to pay a filing fee (currently $435 in California). However, you need to be careful about making sure that it is not construed as an objection in case there is a no contest clause in the will or trust.  Thus a “request for continuance” might be a softer way to label the document.

If you have questions about seeking continuances in probate or trust matters ask me. I am happy to answer!

-John

What’s a pretermitted heir?

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I came across an interesting case lately that I thought I would share. Though the information will be a public record, in Court, I have modified the names, dates and particulars for privacy purposes.  Here are the facts:

- Harold wrote a standard will (some call it a “simple will” or a “last will and testament”) in 1995 giving everything to Wendy.

- Harold and Wendy got married in 1996.

- Debbie was born to Harold and Wendy in 2001 and is thus a minor (i.e. under 18).

- Harold inherited property from his dad in 2010.

- Harold has personal debt, in his name alone, of approximately $50,000.

- Harold and Wendy lived in the inherited property.

- Harold died in 2012.

For simplicity let’s just say the home that Harold inherited from his dad is the only asset we are dealing with. Let’s assume that Harold and Wendy had no other assets of significance.

At first blush I was going to advise that Wendy file a spousal property petition. That would be a little less of a target for Harold’s creditors than a full probate but would clear title to the house. That is, Harold’s will says Wendy gets 100% of the assets.

Aha!  Ahahhh!  Debbie, the daughter, is a pretermitted heir or omitted child. That is, when Harold prepared his will he gave everything to Wendy. However, the law assumes that if Debbie had been alive he would have wanted to give something to her.

In fact, the law presumes that with separate property (in this case it’s inherited so it’s separate and not “community”) the law assumes Harold would have wanted to give his one child 50% and his wife 50%.

The fact that Harold has a will doesn’t matter. It’s as if the will is invalid as to the distribution paragraph. The law re-writes that to make it 50/50.

Thus, the inherited property is in Harold’s name and Wendy is forced to file a full probate. In that probate she only gets 50% and Debbie gets the other 50% which will be held until she is 18.

A full guardianship may be required by the Court to protect Debbie’s interests.

Harold’s creditors will now have an easy target to go after as a full probate creates an easy pool of assets for creditors to attack.

A probate is much more expensive than a spousal property petition.

If only Harold had written a new will after Debbie was born!

Situations like this are real and they happen every day! Get your estate plan made while you are healthy as you never know what will happen. If it’s too late, and you are cleaning up an estate after death, contact me to walk through all the options. Sometimes there are hidden answers that are not obvious on the surface.

-John

Changing The Mortgage from deceased’s name

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A huge problem we have encountered more and more lately is changing the mortgage from the deceased’s name into the family’s name. That is cases such as two I have right now where the property is in the deceased spouse’s name. I can easily transfer the title of the house by a spousal property petition. However, what about the mortgage? It’s in the decedent’s name too. If the Court order transferring title isn’t enough then we can piggy back it with a petition for letters of special administration. That petition can, and should, be limited to talking to the mortgage company about the mortgage. Court’s are not inclined to approve petitions for special administration unless they are emergencies and/or very limited and focused. In our office we do these procedures a lot, in counties throughout California, and can guide you through hte process. The key is knowing your options. Talk to an experienced attorney before you file!  -John

Probate Presentation to Realtors

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Later today I am speaking to a group of Realtors at the Lyon Real Estate office in Folsom.  I will be giving them a refresher course on transferring and selling real estate after death. Here’s my outline:

LYON REAL ESTATE – Folsom, CA

February 27, 2013

By: John B. Palley, Esq.

I.       Introduction

  1.   Johnson, Fort, Meissner, Joseph & Palley
    1. Since 1979
    2. 8 attorneys
    3. Estate planning, probate, business, real estate, and related litigation
    4. Offices in Sacramento and Roseville – Practice throughout California
    5. John Palley is a Certified Specialist in Estate Planning, Trust and Probate
    6. Brief refresher on Estate Planning for Real Estate
    7. Real Estate sales in probate administration cases
    8. Real Estate sales in trust administration cases
    9. Some thoughts on pursuing probate and trust listings

B.           Topics today (all related to selling real estate I hope):

 

II. Brief refresher on Estate Planning for Real Estate

  1. Transfer by deeds before death

1.     Tax basis problems

2.     Creditor problems

3.     Out of order death problems

  1. Transfer by deeds after death (“Joint tenancy” and CP with ROS)
  2. Wills – Simple but some type of probate required when there is real estate
  3. Living Trusts – Great solution for most people that own real estate in CA
  4. Other Estate Planning (LLC’s, FLPs and QPRTs)
  5. Don’t forget about the property tax issues
  6. Don’t forget title companies make the law but are not perfect

 

III.    Real Estate sales in Probate Administration

  1.   Different types of probate if property worth less than $150,000
  2.   Probate is a formal process  that takes 7 months minimum
  3.   The probate code (PC) and the Judge create a formal process
  4.   The PC lays out strict guidelines for collecting assets & dealing with creditors
  5.   When can you sell property in probate?
  6.   Listing Agreements – Probate form recommended but not required – 90 day
  7.   Probate Sales Form
  8.   Probate Advisory Form
  9.   Short Sales in Probate?  (Protecting other estate assets)
  10.   IAEA v. Non-IAEA (PC 10452 v. PC 10309)
  11.   Selling Upside Down Houses in Probate – PC 10360 et seq.
  12.   Notice of Proposed Action and/or Court Confirmation (waiver is possible)
  13.   Document all marketing and pricing work very carefully
  14.   Standard commissions
  15.   Disclosures that are not provided by PR or trustee: The Transfer Disclosure Statement, The Seller’s Questionnaire, Earthquake Hazard Booklet, Earthquake Hazard Questionnaire, the signature on the Natural Hazard Disclosure but the report needs to be provided, and Smoke Detector Compliance.
  16.   Disclosure that are required by PR or trustee: Lead Based Disclosure, Data Base Disclosure (Megan’s Law), Water Heater Disclosure and strapping, and disclosing anything that is personally known by the representative.

 

IV.     Real Estate Sales in Trust Administration

  1.    Overall a trust administration is much simpler than a probate but….
  2.    Probate code says “may” instead of “shall” for trust administration
  3.    Court not involved unless someone gets them involved
  4.    Simpler than probate but lots of traps (Notice plus specific gifts)
  5.    Duty to inform – Probate Code 16060
  6.    When can you sell a house owned by a trust?
  7.    Listing Agreements – Probate form recommended but not required – No max
  8.   Trust Advisory – CAR Form TA
  9.    Short Sales in Trusts?  (Protecting other trust assets)
  10.    Selling Upside Down Houses – Convert to probate?
  11.    Disclosures (still must disclose known material facts)
  12.    Notice of Proposed Action and/or Court Confirmation – 45 day – PC 16500
  13.    Document all marketing and pricing work very carefully
  14.    Standard commissions
  15.    Crossover between trust administration and probate when there is a trust but

house is not titled in trust at death – “Heggstad” petition

 

V. Pursing Probate and Trust Listings

  1. Probate Court records are public (some Courts are relatively accessible on-line)
  2. Lots of low ball offers by investors
  3. Contact attorney or contact the individual?
  4. Make it easy if you contact attorney (Case Name)
  5. Customer service is still what wins you clients

 

VI.   Conclusion

  1. Working with a qualified probate attorney will make you look good
  2. Title companies are the actual makers of law!
  3. Contact me with any questions!

 

John B. Palley, Esq.

JOHNSON, FORT, MEISSNER, JOSEPH & PALLEY

1555 River Park Drive, Suite 108   Sacramento, CA95815

916-920-5983 (Ph)      916-920-9379 (fax)

palley@lawofficeinc.com

www.californiaprobate.info

 

THINGS A PROBATE/TRUST LAWYER LIKES TO SEE IN A

REAL PROPERTY SALE

 

 

 

1)        Market Analysis Report in writing

2)        Probate Listing Agreement

3)        Marketing Plan

4)        Keep detailed log of all marketing and offers

5)        Use of Probate Sales forms

6)        Fax/email agreement once fully signed

7)        Title company information to attorney

8)        At least 20 (or 45 – trust) days for escrow unless discussed beforehand

9)        Final closing statement

10)  Plus, everything you would do for a “regular” client!

Probate Process from Start to Finish for Paralegals

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We are pleased to announce that John Palley, our lead probate attorney, has been chosen to be the lead speaker at the April 18th IPE seminar on the Probate Process from Start to Finish.  The seminar will take place at the Sheraton Grand on J Street in Sacramento. The brief outline is below. If you would like Mr. Palley’s complete outline please email us.

HOW TO FILE AN ESTATE IN PROBATE COURT 9-9:45 John Palley

Distinctions Between the Modest and Larger Estate
The Estate Timetable and What Needs to Be Done
Steps for Proving the Will
Steps for Challenging the Will

WORKING WITH EXECUTORS AND ADMINISTRATORS 9:45-10:30 John Palley

Duties of Executors or Administrators During the Probate Process
Paralegal Contact With Executors or Administrators
How Misconduct and/or Removal of Executors or Administrators is Handled
Compensation
Special Administration
Duties of the Attorney for the Executor – Who is the Client?

HOW TO PREPARE AND FILE THE INVENTORY 10:45-11:45

Preparing the Inventory – What Every Paralegal Needs to Know
Statutory Requirements
Notice
Working With the Attorney to Collect, Maintain and Manage Assets
How to Successfully Solve Common Inventory Problems

ADMINISTRATION OF THE ESTATE 12:45-1:30

Dealing With Creditors’ Claims
Disclaimers
Assisting With the Estate Cash Management
Insolvency
Preparing Partial Distributions

ETHICAL PERILS IN THE PROBATE PROCESS 1:30-2:30

Distinguishing Between Privileged and Non-Privileged Communications
When the Client Asks for Legal Advice – Knowing How to Say “No”
Protecting Your Firm From Malpractice Actions – Tools You Can Use to Meet Deadlines

DEALING WITH SPOUSE’S ELECTIVE SHARES 2:45-3:30

Homestead Allowance
Dower and Curtesy
Spousal Rights and Personalty
Rights of Election
Procedures

UNDERSTANDING THE LAWS OF INTESTACY 3:30-4
CLOSING THE ESTATE 4-4:30

Tips for Assisting With Final Accounting
Preparing the Distribution of the Estate to Beneficiaries
Discharge of the Fiduciary