Trust v. Trust

August 31st, 2010

I met with some giddy newlyweds last week.  They were about 70 years old and really they define the word GIDDY!  As the kids would say, “OMG!”  We met to discuss their estate planning needs. Though not worth millions they do have assets that they have worked hard to gather.  Also, they each have kids from previous marriages.  Should they get a trust or should they just trust each other!?

I suppose being an attorney since 1994 has caused me to be a little jaded. During that time I have seen countless situations where the surviving spouse (most typically in a second marriage situation) decides to change things in favor of their kids after their spouse dies. That is, let’s say they have a trust that is totally revocable (or amendable) by the surviving spouse. This means the surviving spouse can change everything. The original plan said that the assets would be distributed 50% to her kids and 50% to his kids after the second death… however, things change.

The reasons for the change of heart are endless.  People tend to favor their kids over all other people in the world, there is often stress with step kids, people feel less affinity for their step kids if they don’t talk to them much after the kid’s parent dies, kids can have undue influence on their parents, and the list goes on and on.  In the end it IS about MONEY and money can make people do strange things! 

So clients are giving a choice… trust or trust.  That is, should you set up a trust with protections for your kids or should you trust your new spouse!? My clients last week were common of many I have met with over the years. About 70 years old, they each had assets from before marriage, they each had kids from a previous marriage and they wanted to take care of each other first and foremost.

The options are endless of course. However, let’s pair it down to the main options:

1) A totally irrevocable trust- that is a trust that can not be changed at all after the first spouse dies.

2) An A/B  irrevocable trust – that is a trust that becomes partially irrevocable after the first death.

3) A totally revocable estate plan – that is to just TRUST the surviving spouse to do the right thing.

With the clients last week it was mainly between 2 and 3. The house was the main issue.  I suggested a trust that would become partially irrevocable at the first death to provide some protection to the children of the first spouse to die. That trust would give the surviving spouse the complete ability to live in the house forever but at their death 1/2 would go back to the kids of the predeceased spouse.

They did not like the complexity or the idea of spending money on a trust. I told them another option was to create a joint deed (actually “community property with the right of survivorship”) so that the house would easily transfer to the surviving spouse. I explained that the surviving spouse would then own the house and they could do anything they wanted with it! I said they each could write wills dividing the assets 50/50 after they were both deceased but those wills could be changed at any time.

They looked each other in the eye, smiled and with a Viagra induced gaze they said, “we trust each other.”  They decided to do nothing and just trust each other!

Of course we all want to think that option 3 is the best. We all want to think we can trust our surviving spouse. We all want to think people are good in this world. However, time and time again we are reminded that simply trusting each other doesn’t always work out.

Should they do something different? Of course my lawyer brain says yes but I can’t force them to do anything.  Plus, I truly hope their plan of trust works out and that the surviving spouse does do the right thing.  I truly hope that the surviving spouse does give the pre-deceased spouse’s kids the personal items of their parent. I hope that the surviving spouse divides up the house, or proceeds from a sale, after their death. I am a dreamer!

The reality is simply that death and money often combust into a wicked situation!  Though the questions and answers are not easy a well drafted estate plan can provide for each spouse and insure that your wishes are followed after both of you have died. Again, let me repeat the questions and answers are not easy so be prepared!

Call me if you want to set up a solid estate plan to take care of your spouse AND your kids!  -John

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Reviewing Your Estate Plan

August 15th, 2010

The percentage of people that actually have a completed estate plan is pretty low.  I don’t know the exact number but it’s well under 50% and could easily be under 20%.  Of those 20-50% of the people who were organized enough to get your estate plan done in the first place should you review it at some point?

Well, the way it often goes is the client signs the estate plan, puts it away and forgets about it. Some people remember to put later acquired  assets into their trust but certainly not the majority of people. However, how many people have a document sitting on a shelf, collecting dust, that is simply not accurate anymore.  It may be inaccurate due to family change, asset change or changes in the law. The key is knowing when to talk to your estate planning attorney and, if in doubt, set an appointment to review things!

Times in life when you should review your estate plan:

- Changes in the law;

- New Marriage;

- Divorce;

- Kids or grandkids are born;

- Assets change drastically (up or down);

- Serious illness;

- Change in family business plans;

- Retirement;

- Change of jobs;

- Financial irresponsibility of a child;

and the list goes on and on.

Some of these can be more major problems than others. Getting married is probably one of the biggest. Let’s say you have a will or trust that leaves 100% of your assets to your children. Let’s say you get re-married to a lovely man. He is warm and sweet, loves your kids, puts a roof over your head and on and on the list goes of great attributes that this man has.  Then you die. Do your kids still get 100% of your will or trust?  Let’s say it was 100% “separate property” that you acquired years before marriage and you never co-mingled the assets with community property.  Still? Do your kids still get 100% of the assets?  What if you died on the honeymoon?  Still?  Do you still think your kids will get 100% of your assets?

The laws in California are very clear that your husband is a “pretermitted spouse.”  Simply put this means your hubbie can make a claim against your estate for his intestate share as if you had no will or trust!  If you have 2 or more kids that means he could make a claim for 33% of YOUR assets and if you only have 1 child he could go after HALF.  Let me say that again… HALF!

On the other hand you could revise your will and trust just before marriage to say you are contemplating marriage and still intend to give your children 100% of the assets.  Then you would do an amendment immediately after marrage stating you are now married but you still wish to give all (or whatever amount you decide) to your children.  By preparing proper, legally binding, amendments to your estate plan you have reviewed your estate plan and avoided the Gov-enator changing your estate plan for you!

This is just an example. I have more! 

I encourage you to contact your estate planning attorney to review your estate plan. If you don’t have an attorney call me!

-John

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Getting counsel

July 30th, 2010

I primarily represent the fiduciary in my trust and probate cases. That is I represent the trustee, executor, administrator or personal representative. That is, the person who has been in-trusted to gather assets, determine liabilities, deal with taxes and eventually distribute the assets. However, there are some cases when I represent a beneficiary.

In most of these representations I am just monitoring the proceedings to make sure the fiduciary does what they are supposed to do, answer questions, be the middle man to communicate with the other attorney and give my client peace of mind that they are being treated fairly. A lot of times the attorney for the fiduciary will not discuss matters with a beneficiary. Since they only represent the fiduciary they feel they can’t talk to you. In my opinion some of these attorneys take this to the extreme and just won’t communicate with a beneficiary who is not represented.

In my opinion though the attorney represents the fiduciary they can share general information.  They also can share documents that have been filed with the Court. A lot of times just that little bit of information will make a beneficiary feel better. However, when the attorney won’t take their call, won’t return calls or just says, “I can’t talk to you I represent the trustee,” they are creating potential conflict. It’s too bad because it’s avoidable!

People just want to know they are being treated fairly. In most cases they are being treated fairly but without counsel it’s hard to know.  When you are in the dark it’s hard to know.  When you have an attorney on YOUR SIDE you can sleep better as you will be in the light!  I enjoy representing beneficiaries as I know what to look for and know what the other attorney and the fiduciary should be doing. If they aren’t doing it I let them know!

Likewise I have a case right now where I represent the Executor in a probate case.  The family is not sophisticated and one of the heirs at law is not only unsophisticated but also a hot head. The combination is bad. Since she doesn’t understand what is going on she just objects.  I have tried to help her as best I can since I don’t represent her. However, she is not taking my help since she doesn’t understand it. She keeps saying she will get her own attorney and my client thinks this is some big threat. I keep saying, “great, I hope she gets an attorney.”  If I had an educated probate attorney to talk to this case would be nearing the end and everybody could get their money and move on with life. Instead I got an uneducated hot head questioning everything and creating problems for everybody. As an attorney this is quite frustrating!  I keep hoping she will find a knowledgeable probate attorney to represent her.

In most cases the beneficairies probably don’t need their own attorney but there is nothing wrong with it. I know I advise my fiduciary clients to do things properly so I have no problem with someone looking over my shoulder and keeping an eye on things.

If you are a beneficiary of an estate and want beneficiary representation contact me. I would be happy to hear about your case and see if I can help. If I already represent the fiduciary in your case then nobody in my firm can represent you but I certainly encourage you to get your own counsel.

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California Pet Trusts

July 20th, 2010

In the probate world we like to say if there’s a question the answer is in the California Probate Code. However, this wouldn’t apply to people leaving money to their pets, right!?  That only happens in the movies, right!?  Well, guess what… California Probate Code section 15212 covers PET TRUSTS.

Come on, we are California, remember!?  We do everything in a progressive manner!  Probate Code section 15212 in part (a) provides, “(a)  Subject to the requirements of this section, a trust for the care of an animal is a trust for a lawful noncharitable purpose. Unless expressly provided in the trust, the trust terminates when no animal living on the date of the settlor’s death remains alive. The governing instrument of the animal trust shall be liberally construed to bring the trust within this section, to presume against the merely precatory or honorary nature of the disposition, and to carry out the general intent of the settlor.  Extrinsic evidence is admissible in determining the settlor’s intent.”

Not only is there a law but it’s to be liberally construed to create these pet trusts. In fact, pet trusts are pretty simple. They basically provide that the money is to be used for the pet(s) until all pets, alive at the date of death of the decedent, are deceased. Also, it only applies to household pets but you could probably take that definition pretty far. After the last pet dies the money is to be distributed as provided for in the trust instrument. That is, the document might say “I leave $25,000 in trust for my pet snake, Jake, and at Jake’s death whatever is left shall go to brother Bob who is a used car salesman… that snake.”

Ok, I ad libed a little but you get the point. You also would want to name a trustee to manage the money. This should be a trustworthy person!

I know what you are thinking… “do I really need a trust to leave a few bucks so my friend can take care of my dog?”  Of course not!  You can just give your trusted friend a gift in your trust, at death, and mention in the document that you hope they will take care of your pet with the money.  We often write something like, “I give my friend Jack my pets at my death along with $5,000 to care for them if I have pets at my death.”  However, it’s precatory(or “optional”) language so make sure the friend is trusted.

In my experience a pet trust is applicable for cases with pets that will live a really long time (I think birds and turtles can live 50+ years), where there is a lot of money, or where you want to leave a house for the pet to live in. Oh yes people really do that!  You also could set one for while you are alive to take effect when you move to a nursing home and Fido, your great dane, can’t go with you!

In the end make sure your attorney is a qualified estate planning attorney. They should be familiar with the probate code for pet trusts and can set up a document that takes care of your pet when you are no longer here to do so yourself!

Call me with questions!  -John

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Probate/Trust Mediation

July 11th, 2010

Your attorney has recommend you go to mediation to settle the dispute with your brother related to your mom or dad’s death.  Or maybe the probate Judge has ordered you to go to mediation before they will hear your case any more in Court.  Will mediation help you settle your dispute?  In this attorney’s opinion mediation will resolve most situations… but sadly not all. The reason many probate and trust disputes end up in Court is because tensions run very high after a parent’s death. Sibling rivalry issues from 65 years ago may come back to life. Issues related to the caretaking of one’s parents in their elder years may come up after death. In general, people just don’t act completely rationale when they lose a parent… AND then the other issue that clouds many people’s minds… MONEY.  Death and money combine to be a wicked force!

People end up in Court, and/or facing mediation, when they have a dispute which the two sides can not agree on a fair resolution of.  Maybe one person thinks they should get $250,000 of mom’s estate and the other person (usually their sibling) thinks that number is closer to $10,000… or zero! What’s right?  Well, most likely both sides have merit. Most likely the attorneys for each sibling have told them the good and bad to their case. Often a mediator can come in and solve the dilemna. 

Let me first clear up a common misconception that the mediator comes in, says “let’s split it down the middle,” and you walk out 25 minutes later. No.  Mediation often takes all day or, in rare cases, multiple days.  In reality the mediator will generally listen to both sides present their case in a room (often a meeting room at a law firm).  Then the mediator might meet with each side alone to give their opinion of the good and bad of their case.  Yes, the mediator works hard to get a resolution but they can not force you to settle and the mediator does not make a “decision” like a Judge that is binding. A mediator trys to get both sides to see the light, agree and end the lawsuit!

A mediator is usually another attorney who practices in the area of estate and probate law (assuming your mediation is in this area of law of course). In some cases a retired Judge is used. In any event the person is an intelligent and level headed individual with knowledge of probate and trust law.  Mediators are typically paid by the hour and will bill for prep time for the mediation, travel time to the mediation, the mediation itself and any follow up work. They typically charge fees like most lawyers do; maybe $200 – $400 per hour as an estimate.

Let me clearly state a mediation is not Court.  However, you can generally get your case to mediation substantially faster than you can get to Court. Thus many people prefer mediation. Also, mediation tends to be substantially cheaper in attorney fees and I mean $UB-$TAN-TI-A-LLY!

So, let’s back up. Before the mediation your attorney will prepare a mediation brief outlining the case in their view. The other attorney will, likewise, prepare a brief showing their view. Often there is some overlap where the parties agree and then a lot of areas with no overlap.   Focusing on the issues with overlap is first to confirm the common ground. Then the mediator will delve into the dark side and try to resolve the OTHER issues!

The mediator will often put one person, and their attorney in one room, and the other in another room. The mediator will then go back and forth between the two rooms trying to narrow downthe differences and come up with common ground for a settlement.

If both parties agree the mediator might call them into the same room for a meeting to confirm the details. Then the attorneys, and the mediator, will walk over to a computer and start typing out a settlement document. The people do not leave until the settlement is reviewed and SIGNED!

In my experience mediation is a fabulous way to resolve disputes in the trust and estates arena. I encourage you to look into mediation to settle your disputes. If you need an attorney call me. If you need a probate and trust mediator call my associate, AMY RUGGLES, who has the training, patience and knowledge to help you!

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The Importance of Specialty

June 9th, 2010

If you drive a Lexus do you take it to the Ford dealer to get serviced?  Likewise, if you drive a Buick do you take it to Honda dealership for service? My guess is you don’t. My guess is you want someone who specializes in your type of car to fix your car.  What about food?  Do you go to a hamburger place and order fish?  Or maybe you go to a Mexican restaurant and order pancakes?  My guess you go to the type of restaurant you feel like that specializes in a certain type of food.  Doctors? 

Well, you get the point.  How can the same not be true for your lawyer? If you get in a car accident do NOT call me because I do not know the in’s and out’s of personal injury cases. Likewise, if you get charged with a crime please do not call me with your “one call” because I do not know the first thing about criminal defense.  I know all about wills and trusts though!

When you are thinking of hiring an attorney look at their web site, look at the state bar website, and then ask the attorney. I can tell you 100% of my practice is dedicated to wills, trusts, probate and estate planning. ONE-HUNDRED PERCENT. I do not dabble in any other area of law.  When you are deciding who to hire to organize your family’s estate do some research! Check the other attorney’s backgrounds and find out if the dabble in estate planning or have dedicated 100% of their professional life to one area of law.

If their website says they practice a large list of areas that means they are a generalist who is probably not as knowledgeable at estate planning as someone like me who is a Certified Specialist in estate planning, trust and probate law as determined by the State Bar of California Board of Legal Specialization. This means I took a second bar exam… yes, I am that crazy! A one day exam only in these areas of law. Once I passed that I then underwent a deep background check where lawyers and Judges confirmed to the state bar that I know about trusts, probate and estate planning.  For you to hire anybody but a certified specialist is a mistake in my opinion!

Go to my website, go to lawyers.com, go to the state bar website. Every place you look it will say that I do wills, trusts, probate and estate planning. If you find a website that says I do anything else let me know so I can fix it!

If an attorney tells you (or their website shows) that they practice in several areas of law how can they be GREAT at it?  I know attorneys who think estate planning is just filling out some forms. It is NOT that simple. I promise.  The mistakes that can be made can be devastating and can cost your family huge amounts of money, can cause family strife and can usually be avoided!  Use an attorney who focuses their law practice on estate planning if you need a new trust. Do not make a mistake and let a slick talking salesman tell you anything different. You do need to use a specialist!  No, it’s not brain surgery but I know you wouldn’t want an orthopedic surgeon doing your brain surgery so don’t select a family law attorney to do your estate plan.  Select an ESTATE PLANNING ATTORNEY to do your estate plan!

In closing, if you need to know about wills, trusts, probate, estate planning, family limited partnerships, life insurance trusts, qualified personal residence trusts, QPRT’s, QDOTS, heggstad petitions, 850 petitions, probate court petitions, living trusts, loving trusts, revocable trusts, powers of attorneys, health care directives, Qtips, living wills, family LLC’s, family FLP’s, estate taxes, gift taxes, annual exemptions, generation skipping taxes, property taxes, capital gains taxes, and the list goes on then YES please call me!

-John

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A little mis-direction

June 4th, 2010

I have written before about asset protection. It’s the hot item right now as people are getting sued, finding out they co-signed something they should not have, and finding out that personal guarantees mean you can actually be personally LIABLE!  Today I am going to write about a simple thing you can do with your current (or about to be set up) revocable “living” trust to give you a small amount of asset protection.

A standard revocable trust provides NO asset protection for you. However, what is a very common method of determining a potential defendant in a lawsuit?  Lawyers look in the real property records.  Amazingly the public records show what real estate is titled in your name, what you paid, what your down payment was, what your first mortgage was for, what your second (or re-fi’s) were for, what banks those loans are with, and a whole host of other information.  Yes, it’s PUBLIC.  Also, a lot of older records include your phone number even if you have an un-listed number.  Call the county assessor and find out what public information there is out there about your house.  

What if you could put a little hurdle to make it more difficult for potential litigants, or just random crazy people, to find what property you own? It’s just a little mis-direction play but it can be a touchdown in your asset protection.  Though you may be unlisted in the white pages you likely ARE listed in the real estate records which are likely search-able on many websites!  Let’s say you live on Main Street and your name is John Smith.  Most people would call their trust the “Smith Family Trust.”  Now that’s good but it’s still in your name and thus shows up in name searches.  What if you changed your trust name to the “Main Street Trust?”  A person wanting to sue you would do a search for “Smith” and they would not find your house or other real estate as they are titled in the name of the Main Street Trust! 

NO this is not an impervious wall but this will reduce your chances of a lawsuit and will put up one additional wall to make it harder for lunatics (or criminals) to find out where you live. Check back in a few days for another simple tip like this….

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The Best Time to do estate planning

May 25th, 2010

I generally say “let me know about two weeks before you need it” when people tell me they are thinking about getting their will or trust done.  Yes, I smile and sometimes wink after saying that. The fact is we don’t know when our two week timer has started… and when it’s going to BUZZ!  Thus, you should get your estate plan done NOW while you still can.

While certainly more people do estate planning as they get older there is nothing wrong with planning when you are younger.  In fact, you often can set things up which can have an incredible impact later in life… or after death.

For example, people with young children should definitely get their estate plan set up because if, in the unlikely event, there is a joint death you can leave a mess with your kids and family.  There can be fights over who should be guardian followed, the day your kids turn 18, by the enrichment of a salesmen at the local luxury car dealership. Get your affairs set up now while you can still make all the choices and avoid these problems!

Another great example of estate planning that can be incredible at a young age is life insurance planning with an irrevocable life insurance trust. The creation of a life insurance trust, at a younger age, can create an incredible financial legacy for your family for generations and/or the charity of your choice. This is because the lower cost of life insurance (due to low mortality rates) coupled with the time value of money make it so you can crate a huge pot of money… and if it set up correctly, with the irrevocable trust, can be 100% tax free, and creditor protected, to your spouse and children! The life insurance lobbiests have set something pretty amazing up so utilize it to your benefit!

Lastly, it’s simply more pleasant to do your estate plan when you don’t know how long you have left on this great earth. I have met with countless people who are cleaning up their affairs at the end of life and it’s not fun for either of us! Also, it can be tough to get some assets properly into the trust if you only days or weeks to do it.

In short, get your estate plan done now so there is no rush!

Having said all that, it’s rarely “too late” to get your estate plan done as long as you can call me from your hospital bed we can probably get it done! I have put documents together, and been to the hospital for a signing, within hours of talking to the client on the phone.  However, I prefer to get it done before I feel like an “ambulance chaser” walking down the hospital corridor in my finest suit.

Call me and let’s talk about setting up your estate plan now!

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Estate Planning for Pets

May 21st, 2010

I recently met with “Mabel,” an 85 year old client with a dog named “Buddy” who she loves very much. When Mabel dies who will take care of Buddy?  She believes her neighbor will take Buddy but will he?  Can Mabel do something to provide more security for Buddy?  Herein lies a problem when the pet owner dies without having made plans for their beloved little friends. It is quite possible for a beloved pet to become homeless or forgotten. In either instance, the premature death of the animal is possible. For most pet lovers, like myself, this is not an acceptable outcome. 

The first step in the planning process is to find friends or relatives who are willing to care for your pets, and provide them with a good home. You then need to find a qualified estate planning lawyer. You need a lawyer to draft, at a minimum, a durable power of attorney and a will. Both documents should clearly state who you desire to care for your pets if you become unable to do so yourself. You may also choose to leave some money to the caretaker with the intention that it be used to provide for the pet.

Contrary to what we see in the movies, most states do not allow a person to leave money directly to their pets.  However, in 1991, California established Probate Code Section 15212, which gives a pet owner the ability to set up trusts which can last for the lifetime of the pet. This is an important change over prior laws, particularly for people with animals who are likely to live a long time.

Trusts CAN be set up to take care of your pets at least in California!  I have personally drafted some pretty intricate trust provisions for pets. It can be as personal and specific as you desire!

Above all else make sure your attorney knows what provisions to put into your estate planning documents in regards to your pets. There are many attorneys with thirty years experience who have never provided in a will for a pet, so make sure your attorney knows what they are doing so that your little Buddy will be protected!

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Real Estate Sales After Death

May 18th, 2010

At least once a week I get a call from a perspective client that goes something like this:

ME: “Good morning this is John Palley….”

CLIENT: “I need your help fast… we are trying to sell mom’s house… it might be in foreclosure… and the mortgage company won’t talk to me since we haven’t started the probate yet….”

ME: “How long ago did mom die?”

CLIENT: “Well… she died 3 years ago but I have been busy, and my brother isn’t helping out, and then I got divorced, and my dog is sick, and….”

ME: “I want to help you out… and I CAN help you out….”

However, in most of these cases the only way I can help is by filing for probate.  The probate process, though not the end of the world, is slow. If the client above contacted me on May 18th I would most likely get “Letters” issued to them by the probate Court around July 1st. In some cases, if it’s an emergency, we can get Letters issued earlier via an “ex parte” petition to the Court.

Ok, so once Letters are issued by the probate Court then what happens?  Well, Letters allows you to stand in the decedent’s shoes. That is, you make all decisions for them as if you were them… but there are some extra rules involved.

So we file the probate May 18th, you are appointed Administrator on July 1st and then what….  Well, generally we want to get the house sold as quick as possible… especially in this down real estate market. I encourage my clients to prepare the house for sale, interview Realtors, look at market analysis reports from the Realtors, and do whatever else they reasonably can so that the listing agreement can be signed on July 1st.

Once the listing agreement is signed you can start accepting offers!  Well, maybe the offers don’t roll in like they did back in 2004 or 2005 but if a house is priced right it will sell!

Once you have an accepted offer you (or more likely your Realtor) will provide that contract to me.  In most cases Court approval is NOT needed. Instead I will send then out the Notice of Proposed Action to all interested parties.  That provides them 15 days to object if they do not think the sale is fair. People do not generally object but if they do it’s likely because they feel the house has been sold too cheaply.  If nobody objects the house can close escrow 15 days after the Notice of Proposed Action was sent out.

If a person objects then we revert to a Court auction.  Unfortunately this greatly delays the sales process as we have to publish in the paper, post at the Courthouse, and send notice to all interested parties. The Court hearing will look a lot like a cattle auction down at the county fairgrounds.

The Judge will generally have a number of probate matters on his calendar. Anywhere from 5 to 85 depending on what county. Let’s pretend this case is first. The Judge would call the case and then the Judge (or the attorney) would announce the sale as follows:

“Calling the estate of John Doe, case number p5319, this is a petition to confirm sale of the real property located at 1234 Main Street.”  The Judge would then say “the bid is $200,000 and if anybody here today wants to bid the first overbid will be $220,000. Does anybody want to buy the property at 1234 Main Street for $220,000?  Going once, going twice… hearing no offers the house at 1234 Main Street is confirmed to Bob Smith for $200,000….”

The Judge will likely sign the order right there and an organized and efficient attorney (like me) will pick up the order and get it to the title company that same day so that the sale can close escrow ASAP!

The above illustrates the two most common ways to sell a house in probate. The first is by Notice of Proposed Action and the second is by Court auction.  There are other situations that arise.  Here are a couple we deal with:

First is the situation where one family member wants to buy out the other family members.  This can be done but care needs to be taken with the transaction. There are many problems that could develop. A common problem is a child is buying the house but the attorney has not properly established a distribution agreement to maximize the chances of the parent to child property tax exemption form being accepted by the county assessor. This is crucial as a re-assessment of property taxes can create a huge, and very long term, tax impact for the person who is keeping the house. 

In this type of family transaction it is also is crucial to get the house valued properly so all interested parties agree the price is fair.  This can be done by agreement, valuations by one appraiser, valuations by multiple appraisers, or some other means.  Though the probate referee has to appraise the house their appraisal is the date of death value which is not always relevant as so often it has been many months since the decedent’s death.

Another situation we have been seeing more and more is probating upside-down real estate. There are cases where we can get YOU money even if an upside-down house is the only asset in the probate case. Yes, really!  Call me to discuss!

If you have any real estate situations dealing with property after death please contact me!  Or, if you want to get a living trust in place, before death, and avoid much of the above drama… call me!

-John

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