I was presented a really interesting hypothetical recently. I thought it would make for a good blog post as there are a lot of intricate turns. It gets into issues of how to hold title, how to distribute assets between husbands and wives, and how small estate options work after death.
In this case Harold and Wendy owned a property worth $125,000. More interestingly they actually owned 10% of a property worth about $1.25m. Why is this more interesting? The loan on the property is about the same. H and W are now deceased and the rest of the owners on the property want to sell it to get out from under it. H committed suicide after committing fraud on a number of real estate deals. W, was innocent in the transactions, and died
It seems a day does not go by without speaking to a potential new client regarding their parent’s trust not being properly funded. There are different reasons this happened but the end result is they need to hire an attorney. This blog post focuses on the interplay of the small probate estate and funding a trust post-mortem.
HOW IT HAPPENS
A trust does not get funded for so many reasons. The most common are:
1) Client did trust themselves (or with on-line service or forms) and didn’t get assets into the trust;
2) Client hired a paralegal or inexperienced attorney and they didn’t properly take care of trust funding;
3) An asset was acquired after the trust was established;
4) The asset was an oddball thing that even a good attorney
In 2012, the law in the state of California changed regarding small estates. Currently, California Probate Code §13100-§13116, the Small Estates Law, says that if the value of the decedent’s estate at the time of death is less than $150,000.00, the estate does not have to go through probate. An affidavit is signed which is then used to distribute the estate to the rightful heirs. The affidavit has to be signed at least 40 days after the death of the decedent. If the estate is administered under the typical probate provisions, there are no documents needed for filing with the Superior Court.
The $150,000.00 limit on the value of the estate includes the following assets: Brokerage accounts, mutual funds, bank accounts, stocks, bonds, and real property not to exceed a value of $50,000. O
I met with a new client today whose husband died recently. She said she went to a local attorney, who was very nice, and told her she would have to do a full probate to get the house out of her husband’s name and into her name. The grieving widow, luckily, decided to do a little more research before hiring that attorney.
The problem is that this attorney didn’t know all the options or… worse. Let’s just assume he didn’t know all the options. The problem is a lot of attorneys say they are “probate attorneys” because they have done a probate before. This does not make one a true probate attorney. Doing one or two or even 20 probates does not make one an expert.
If you are looking to hire an attorney find someone that:
1) is a CERTIFIED SPECIALIST IN ESTATE PLANNING TRU