Spousal Property Petition (SPP) v. Full Probate

I recently discussed a case with a potential new client. The facts are similar to other cases I have seen before and I thought it might be helpful for you, my loyal readers to hear of such a case. I have simplified a few of the facts and modified so this is similar but not identical to any real client, but generally here is the situation:

  • I was contacted by Wife;
  • Her husband died recently;
  • They have a house in his name alone as “his sole and separate property;”
  • There is a signed deed to husband but it’s possible wife did not actually sign it (deed fraud?);
  • A combination of community property and separate property were used for the down-payment and/or mortgage payments;
  • They have two kids together and there are no other children;
  • The house is the only significant asset;
  • Let’s say the house is worth about $400,000 for simplicity;
  • Husband had no will or trust.

What to do?  How should we attack clearing title in the California probate court under these circumstances?

First and foremost I look at what is best for my client? That’s my job as an attorney. We have the ultimate “fiduciary rule” and always should put our client first!

ATTORNEY FEES

Attorney fees are certainly one of the first things to consider so let’s compare the options.

A full probate, for a $400k estate, would cost about $11k in attorney fees plus about $2k in Court costs.

A spousal property petition alone won’t be enough as the property is listed in her husband’s name alone and there is a separate property component that we won’t be able to overcome based on the facts of the case. So we likely have a combination of an SPP and an under $150k succession to real property. So two probate court petitions.

These other petitions do not follow the probate fee schedule. Attorney fees are based on what each attorney charge. I would guess a range of $3,000 to $10,000 in attorney fees for each petition plus court costs for each petition.  So, as you can see the family could easily spend more than the cost of just doing the one “full” probate petition.

If this were a million dollar house then I might have a different conclusion.

However, attorney fees are not the only consideration.

CREDITORS AND TAXES

Another consideration, for which procedures to use, are creditors and taxes.  Each case is very unique here. I will not discuss this case specifically but some factors we look at are:

  • Is the decedent the only name with the creditors or did the spouse sign too?
  • What type of creditors (credit cards, mortgages, reverse mortgages, lines of credit, general creditors)?
  • Are taxes owing by the decedent?
  • How much is owing on the debts and taxes?
  • Other personal and unique factors.

FAMILY

A big issue is who are the next of kin and are they friendly. In this case it is mom to the decedent’s children and she believes they are all in agreement and friendly. In many cases the prospective client is “evil step-mom” in which case we would need to take a more aggressive approach to establish as much of the house is community property as possible. In that instance the SPP might be a good choice. In a friendly case the full probate might be better.

OTHER FACTORS

Each case is so unique.  Does the time matter? An SPP can be done in a couple months while probate is more like 8 months.  Are they trying to sell the house? What county will we be filing in?  The list goes on.

CONCLUSION

In conclusion, don’t jump the gun. Consider all the facts of the case, evaluate your options, and then decide which plan to go with. If I can help evaluate your case call me or send me an email.

-John Palley

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