There are so many notice requirements in a probate. Here are some of my notes from the proabte seminar I gave this week. This focuses on some of the notice requirements you need to be aware of. Contact me with questions. -John
- Notice to Creditors, Beneficiaries and State Agencies – What Is Required
PRACTICE POINTER: Always err on the side of caution. If there is a question if they should be put on notice I recommend putting them on notice.
- The PR is responsible for putting many people, entities and agencies on notice of the probate estate. There are timing issues as to when you put them on notice.
- In addition to this specific mailed notice, of course, publication is required in the city where the decedent resided prior to the Court issuing Letters to a PR. It should be noted that the publication requirement is NOT satisfied by publication in the county and, in fact, some Court’s do look for publication in the actual city the decedent resided in (PC 8121) so be careful with your newspaper selection.
- Pursuant to PC 9050 the PR should put “known or reasonably ascertained creditors” of the decedent on notice of the probate administration. When advising the PR I send them a list, as an example, of potential creditors that includes the following:
a. The hospital or rest home, if any, where the decedent died.
b. All physicians or other health-care providers who treated the decedent.
c. All ambulance companies used.
d. The landlord (if decedent rented) or mortgage holder (if decedent owned property).
e. All employees and providers of services (gardener, cook, accountant, maid, etc.).
f. Utility companies (gas, water, electricity, telephone, cable television, etc.).
g. Note payees (may be found by reviewing tax returns for the list of interest deductions).
h. All credit card companies (also return any credit cards cut in half at the time the notice is given).
i. Anyone who sends a bill to the decedent.
j. Any securities broker who may have a margin account or other obligation due.
k. Those interested in the decedent’s guaranties or contingent liabilities, which may appear on any financial statements of the decedent.
l. Creditors of the decedent’s business if it appears likely that there may have been personal guaranties or if the business is not incorporated.
- I typically recommend putting taxing agencies on notice including the California Franchise Tax Board, the IRS, county tax collector and any other tax collector that may be applicable for a certain decedent. The notice to the Franchise Tax Board is now required in probates within 90 days of letters issuing (PC 9202).
- It is good practice to always put the county tax assessor (or tax collector) on notice of the probate as there can be a reassessment and/or supplemental tax bill after death. This comes up in a case where the beneficiary, or heir at law, does not qualify for parent-child (or grandparent-grandchild) exclusion from reassessment or the proper form was not filed. (BOTH ATTACHED AS EXHIBIT JBP-5) I put the assessor on notice by filing the Estate Change in Ownership Statement (ATTACHED AS EXHIBIT JBP-2) and I file the parent-child exclusion form as soon as I ascertain who will be receiving the real property.
REALLY IMPORTANT PRACTICE POINTER: In all cases a parent-child (or grandparent-grandchild) exclusion form should be filed PRIOR TO REAL PROPERTY BEING SOLD and within 3 years of transfer (death). This is especially important in probate estates (and trust administrations) where you are selling the property as you will inadvertently create a large supplemental tax bill if you don’t file before the real property is sold.
- One other entity that it is important to put on notice is the California Department of Health Services (Medi-Cal). Notice (FORM ATTACHED AS EXHIBIT JBP-6) shall be sent to the DHS along with a copy of the death certificate for the decedent and any predeceased spouse. Such notice shall be sent within 90 days of issuance of Letters. DHS then has 4 months to file a claim. Typically they reply with a letter stating there was no usage by anybody with that social security number. In some cases they reply with a detailed bill of Medi-Cal use. As the government tends to be a priority claimant it is important to establish if the bill is correct and if the government is entitled to collection on that claim. There are situations when Medi-Cal is not entitled to reimbursement; for example, when any of the decedent’s heirs at law are disabled or if the decedent received Medi-Cal coverage before age 55.
PRACTICE POINTER: When in doubt put them on notice! I always suggest to my clients that they put everybody on official notice of administration of the estate by sending the Notice of Administration form with a blank creditor’s claim form. I recommend doing this to heirs at law, beneficiaries and anybody who may have expended money before or after death in regards to the decedent or her estate. I often put the PR herself on notice in case they have to file a creditor’s claim in the estate for some reason. The bottom line, to me, I want to know who all creditors are so when the probate ends I know my client, the PR, does not have anything to worry about!