Advanced Questions in Probate, with Robert J. Silverman

0:02 Really excited to have back again Rob Silverman, attorney Robert J. Silverman, attorney in probate here in the state of California. And since we met a couple times today, I decided we take a chance maybe go into some advanced topics that real estate agents and petitioners, executors, administrators, fiduciaries, vendors should know about. And we have a real life attorney, though he's not representing us or giving us legal advice, he can help us understand the process and explanation. So Rob, thank you for joining us again today. Thanks for having me again, Bill.

0:30 Okay, so let's jump right into it. Let's talk about spousal petitions. You know, oftentimes I'll see a situation where there's an argument. Is it a spouse? It's not a spouse. Were they married? Were they not married? Is there will not a will? And people say, "Oh, no, it's easy. We don't need a probate. We just need to do a spousal petition." I would say, "Well, that isn't easy. It's different. It's a different document." Talk a bit a bit about the op the options of spouse petitions versus a standard probate.

0:55 Sure. So if somebody was married and passed away and let's say they died intestate they died without a will and let's suppose like a lot of married couples their all their assets were acquired during the marriage. They didn't neither spouse brought anything into the marriage and kept it separate. Neither spouse inherited or at least the deceased spouse, the first spouse to die, didn't inherit anything during the marriage or receive anything by a gift. Those are all sort of separate property. so everything was acquired during the marriage and everything is community property. community property dying without a will, community property goes to the spouse. and you'd say, "Well, fine. do a probate." And at the end of the probate, then all that the community property, which is the 50% that was owned by the deceased spouse, will end up going to the surviving spouse. So 50% there's you know, a million dollars of assets and $500,000 of it belong to the deceased spouse. That has to go through probate, right? No. Wrong. a spousal property petition is what it's called is filed or can be filed and you basically petition the court. it's not you don't follow the same rules as a probate, but you file a petition with the court alleging that the deceased spouse owned these assets as community property and they should be confirmed to belonged the that the 50% that that belong to the deceased spouse should be confirmed to belong to the surviving spouse. There's a hearing that's set depending on the court, a lot of different courts in California, depending on the county. it's a couple months to six months. And whenever the hearing takes place, if

2:59 Everything is in order, the judge issues an order that says yes, the 50% of the community property that was belonged to the deceased spouse is now owned by the surviving spouse. Done. No publication, no notices, no creditor claim process, no inventory and appraisal. All the typical things that need to be done in probate don't have to be done. Simple. It's relatively simple. Notice petition. And it's usually it's not nothing, but it's a lot less expensive typically than a probate. if there are if there's even if there's significant separate property well so that's the basic bill there is and somebody might say well what if the what if the deceased spouse owned a bunch of separate property too well if the then there probably has to be a probate because not everything can be confirmed to the surviving spouse unless there was a will if there's a will that says all of my assets go to my spouse if I die first. Then not only community property but separate property can under the will be done by spousal property petition. So assuming a surviving spouse files an 850 petition, gets the court to confirm that all the assets are in fact community property, does the court then issue an order and is that able to be used to grant property or sell property or transfer title or what's the process look like to actually get the title transferred to the name of the surviving spouse?

4:44 Yeah, good question. So, it's similar to a probate in that when you have real property and you have the final order in a probate, that order gets recorded and that serves just like a deed.

4:57 The final order that says the spouse is entitled to this or that piece of real property in a probate petition. It's the same with a spousal property petition order and that is similarly recorded and then it is effectively like a deed in that the surviving spouse is [clears throat] then cleared to refinance, sell, do anything that any other owner of real estate can do.

5:25 Now, you mentioned it's less expensive than probate, but it's not free. Meaning, if you have a million- dollar property, a probate might cost 10, $20,000, $25,000 or more. or you have legal fees and expenses and depending on 850 petition it might be maybe my experience about half of that but still a substantial amount of money. Does that sound about right as a general rule? It really depends a lot. I mean, attorneys have different rates throughout the state and some do these on a flat fee basis, some do it on an hourly basis, but you know, I would say a reasonable range for a spousal property petition, if everything else, there's no sort of weird facts and anything strange going on, is going to be anywhere from call it 3500 bucks to seven or $8,000. Now, that's a big range, but there's a big range of experience and fee bases by attorneys. But in any event, yes, you're to your point, when you it doesn't take based on the statutory fee formula, it doesn't take a real large estate to get above well above 10,000, 15,000, 20,000. And it would be unusual even for very expensive attorneys to charge that for a spouse property petition.

6:42 And typically these matters are heard in the same courts for probate are like in LA County, it's in the probate court. So in essence, you're in probate court. You're just not the material is a spouse petition as opposed to a probate case or the petition, but really at the end of the day, it's it's you're [clears throat] paying maybe half the price, but something. And you're in the same building in front of the same judge. hiring an attorney kind of do the same thing. So to oftentimes to customers when they say well it's not a big deal you know well it's not a big deal unless it's a big deal right?

7:13 Yes. This is if you think of it just as a simplified process that's less expensive. it takes a lot just [clears throat] even if the fees aren't hugely different the procedure is a lot involves a lot less bureaucracy and takes a lot shorter period of time typically

7:37 Shorter once you're there but at least in LA County when you file the 850 petition your first hearing day is not for six months right

7:45 On a probate theoretically with full authority you can get it approved in 35 40 days, get your order and sell the property and close escrow before then. So again, it's not it's different. I think this is where clients really need to get sit down with the attorney and you're you're laying this out, but I think it's really important to get your clear plan. What are you trying to do? And so given that it would be faster in some cases to do a probate than a spousal, does one have the option to probate as opposed to a spouse petition or is that not appropriate? yes, absolutely you have the option. There are rare cases where even though it's going to be a little more expensive and it's going to take more time it's appropriate and helpful to probate something. For example, there's a creditor's claim period in probate in a full probate where once the petition is granted for probate and letters of administration or letters testamentary are issued, there's a four-month creditor's claim period. if not if known creditors are notified and you know and they don't file a claim and unknown creditors it doesn't matter if they're not known they're not going to get a notice and but with nevertheless they're required to file a creditor's claim within four months of letters being issued. If they don't do that it's all over. So there's more finality.

9:20 There is no such claim process with a with a spousal property petition. So if you were concerned that the decedent had lots of creditors and it may be better to get closure and finality on the creditor side, you might file a full probate instead. One of the things that's interesting as a real estate agent, I'm I'm literally dealing with this today in a couple hours when a buyer is buying a property and you ask them, "Well, how you going to hold title?" they don't know. I'm not an attorney. I'm not allowed to give them legal advice. Though, I can send them material from an attorney or from a title company that lays out what their choices are and why they might want to make the right choice. And often times people say, "Well, it doesn't make a difference. Joint tenants or community property. What's the real difference? But there is a difference. Talk a little bit about the difference when a when a married couple buys. What are the differences in terms of survivorship or transfer of property or maybe it's not important? It's overstated. how important is specifying for a married couple joint tenancy versus community property or not or separate property if they maybe have a prior marriage situation. Yeah, titling is one of my you know featured topics when I'm giving talks and when I'm talking to clients. I mean the vast majority of our clients since we do a lot of estate planning, [clears throat] excuse me, in addition to probate you know we're we're forming helping clients establish living trusts and living if you own property and it's titled in a living trust then you get a pass from probate.

11:00 So, it's typically the best way to hold title. There are some exceptions, but let's say somebody didn't want to married couple, they just didn't want to do a living trust or they hadn't gotten around to it. So, they said, "Well, we'll get we'll get to that soon." And but meanwhile when you close escrow you have to you know and many real estate agents are asked by their clients the sort of the responsible thing to do would be to say if you're a realtor is to say I can't give you specific advice about that or I'm not supposed to because I'm not an attorney and it has important legal and tax ramifications. C form, purchase and sale agreement has got in bold as everybody knows and has for years it says hey the manner of taking title has serious legal and tax ramifications. and they and it does. So [unclear] the joint titling in California at least there's in other states there are some different forms of holding title. there's tenants of the entirety and there's some other forms that that don't that that aren't here in California. But in California, there's joint tenancy, there's community property, there's community property with rights of survivorship, right of survivorship, and then there's tenants in common. and basically going through tenants in common is undivided interest. so if you own a tenants in common you have an undivided 50% interest with whoever the other tenants in common are.

12:35 If you do that with your spouse that's usually the worst way to hold title because it pretty much guarantees a probate. there is no right of survivorship. There's no sort of automatic transfer when one jo when one tenant in common dies. Tenants and common is very appropriate if you take title with a friend or your brother or sister or a parent or whatever because each party wants to be able to do whatever they want with the asset when they die. So they if you have a will and you have tenants in common, you can you can will your 50% to whoever you want. So there are tenants in common has a place but it's it's very rare that that would be I can't think of an instance where that would be advantageous for a married couple. You really want something with right of survivorship. What does that mean? It means that upon the death of the first co-owner and here we're talking about spouses. the there's sort of an automatic by operation of law automatically the surviving per o co-owner owns the interest that was held by the deceased co-owner. That's only possible with two forms of title here. Community property with right of survivorship and joint tenancy. and so it doesn't mean it's absolutely 100% as soon as the person dies you own it. You have to file a form but it's perfunctory. there's an affidavit that gets filed with a death certificate and then title is cleared in the name of the surviving spouse. So, it's pretty easy and straightforward. there's a catch with community property here. You can hold title as just community property that doesn't hold with it a right of survivorship. So, if a if a married couple holds title just as community property, but it doesn't have that tag right of survivorship, then it's going to it's going to require a spousal property petition all that cost and inconvenience just because they didn't they didn't specify on the

14:40 Title with right of survivorship. Wow. That's I didn't realize that. Well, thank you for clarifying that. That's it's a important you know and it and of course you ask the customer this question when they're faced with like two million pieces of paper to sign and review and they're liable for every single word of every one of the two million pieces of paper. and it's you know as an agent you can't say well this is what's really important of all that stack this is one to get right but part of me wants to say from a business point of view that's one to get right. Make sure you have the right you know in some cases people don't want to have survivorship. Maybe there's a prior marriage and they have kids they want to provide for from the prior marriage and so that's not the appropriate way. Good reason to get an estate plan. Good reason trust rather than leave it to the deed. But that said, and I and the other thing just to add a little mustard on your on your comment, you're going to take title as something, right? You're going to if you're going to buy the property, the escrow at the end of the day is going to put something. I'm sorry about that. My do not disturb expired. you're gonna get a deed from this the seller to you. And so the question is what's it going to say? And you know I've been in court where people bought property over bids and the judge will say how you can take title and say well just Bob and Mary Smith. Okay but how do you want to take title and the judge can't give it legal advice and you know they're taking it wrong. They're going to get a deed that says Bob and Mary Smith and that's probably not really what they want at the end of the day. So thanks for all that.

16:06 Yeah just to just to interject Bill about that. Bob and Mary Smith. Somebody who's attending this might say, "Well, you didn't say anything about just the names, Rob. You said tenants in common, joint tenants, etc." Bob and Mary Smith, that's deemed to be tenants in common. If it doesn't specify the default is tenants in common,

16:29 Which I think is the worst of all ways. The whole title as a real estate agent, that's the most problematic because you have no survivorship issues. You have tax implication issues, reassessment issues. You might have legal issues on who gets to make decisions, who gets to live there. I mean, it just really opens up a can of worms that you know certainly can be prevented if with proper planning. But when they just say, "Oh, just Bob and Mary Smith is fine." And as long as you get along with your wife, I guess it's all fine. As long as you're both alive, you know, it's great. It's only a problem when it becomes a problem. So,

17:00 And just another point is that a lot of title companies have this chart and this matrix and it's complicated and they've got on one side the forms of holding title and the other kind of the various implications and you read it and your eyes you know twirl around in your head and it's very difficult. I mean yes it's better than not having any instructions or any information. I years ago thought there's got to be a better way. So, I put together a digital brochure on the various forms of holding title in California and the pros and cons of them. Anybody who's listening here can is happy, you know, watching can send me an email and I'd be happy to send them doesn't cost anything. just happy to send them my digital brochure on the manner of holding title and the and a and a brief summary of the pros and cons.

18:03 But of course, the best alternative is make sure you get it right when you buy the property because the other thing that happens is well we'll just do it now this way and then we'll fix it later. A sometimes they don't fix it later. That's I think sometimes a Heggstad petition. Well, we meant to fix it we forgot to. or B, it's not insured and you kind of lose the advantage of the title insurance. Not that it's be-all end-all, but you're paying for it. Why not get that transaction insured? So, there's no question who you meant to send it to. Excuse me. Okay. Next topic I want to run by you is the new $750,000 threshold AB 2016 streamline probate. a lot of fanfare was passed. How active do you see that actually in the marketplace?

18:57 Well, it's a brand new law or relatively new. It's new as of 2025 in February at the end of February of 2025. new law passed in California that was designed to sort of streamline and make a lot less expensive and a lot less bureaucratic the process of transferring on death a piece of real property. if somebody dies and substantially and they only have a property that that was a principal residence and is valued at date of death of le of $750,000 or less. we know California is expensive in general and it that doesn't work with a lot of properties, but there are lots and lots of properties still in California that are not worth more than $750,000. If that's all or substantially all you have and you die, there is a an expedited procedure where the essentially it's done by valuing the property. You get a the probate referee who's basically like an appraiser who is associated with the county in which the person died and you have them do a what's called an inventory and appraisal that just says okay this 123 Main Street in you know a wonderful city is was this owned by the decedent and the val the appraiser or the probate referee says yes it was worth you know $650,000 on date of death. You take that inventory and appraisal and there's a form that gets filed and signed by the rightful successors. That could be the people in a will who it's a valid will that was signed and says my property goes to Betty. then Betty signs the affidavit and files that in

21:02 Probate court with the inventory and appraisal showing the valuation and that effectively is the end of it. And that and that again serves as evidence that concrete, you know, definitive evidence that Betty is the new owner. and so it is it can be very useful. the catch or one of the catches is it's got to be principal residence. It's got to be under $750,000. And if there let's say there's bank accounts and there are investment accounts and other assets, automobiles and all that is, you know, three or four or $500,000. Well, then you have to do a probate for those assets. And at some point, you may just, it may be, well, let's just throw in the real estate and do a probate with all this stuff. Or you can do an expedited probate with the principal residence for under 750 and you can do a smaller probate. so all told, it's going to be less expensive to do that if you have less than [unclear]. It's a weird number, so let's just round it off and say if you have an aggregate of less than a couple hundred thousand of other assets, then you can do what's called a small estate affidavit for the for that property and you can do the expedited probate for the $750,000 or less real estate. So you have to sort of look at all the various assets but when it fits it is it's much quicker and much less expensive than doing a it's sort of like another option. You've got, you know, full probate, you have spousal property petition when that fits. You have a expedited probate with the 750 or

23:07 Less. And then you have this small estate affidavit which can't involve real estate. That's just miscellaneous kind of personal property. So you it's like a puzzle and you just make sure that the pieces work h how do the pieces work best for the client to make sure that the process and the costs are sort of minimized. I know when the this was passed there was a lot of excitement. A few attorneys in particular were putting [clears throat] together you know fixed price options for this and some streamline procedures for this and anticipated but I just don't think I've seen that many of them and the attorneys I've talked to I haven't talked to anybody who's done one yet. I've seen some that started and then there were hiccups along the way that prevented it. But it doesn't, it seems to be one of those things that it sounds great in practice, but there's not that many, that fit that bill here in California.

24:01 It's true. I have a very active probate practice. and I'm doing a few of them. but not you know you would think well this is going to be very prevalent because it's such a great thing and it is when it fits but and I started one actually a couple months ago the client was quite sure that the property a lot of deferred maintenance that the property was worth less than 750. We sent it to the probate referee. I said I'll try it. I no guarantees and I'll bill you on an hourly basis for it and it's you know not going to be all that expensive because there's not much in the process. And the u the appraisal come came back at $875,000.

24:49 Right? And my client said, "Well, can you go back to the probate referee and maybe have them adjust it to lower it?" And I said, "Yes. You know, give me a list of all the defects and the problems with the property." And ultimately the bottom line is the client threw his [clears throat] hands up and said, "Rob, there's no way that we can list enough defects that's going to lower it that much in value. We don't really have any choice. Let's just go with the full probate. You warned me, Rob, that we may have to do that." So sometimes you don't know until you run it by the probate referee and get the inventory and appraisal. So, that's another issue and that can be a little bit in time and cost before you even know whether or not you're going to qualify for this if you're if it's going to be close. Well, I will say to the real estate agents listening, this is a chance to help out because the inventory appraisal report probate referee theoretically does a driveby only like they don't get access to the inside. I mean I mean disparage organization, but I don't believe they actually drive by the property. there was a time when they would charge extra for photos and be like 50 bucks or 75 bucks in the old days and I saw that you know up until recently it seems like it just stopped and I'm not sure exactly why but I don't actually believe in my experience and I'm not here talking about any particular case they actually do drive by and so it creates opportunity that if we have good information give it to them before they do the report. Yes. So if we can show comparables and we show how much nicer they are and how much it would cost to get to that level, then you can give that to the report the referee beforehand. And I find most of them appreciate they're they're listed publicly if you know the name or when they file the probate the name of the probate attorney pro referees on the form. You can find who they are and you know coordinate that with the attorney obviously and your client but you can cooperately send them information ahead of time. And I think this is one of the opportunities of realtors we have to create some extra value because like in your case if it was if it was true they can get them to come below. Not doing anything nefarious. I'm saying

26:52 Just give them comps, give them pictures, show the photos of the comparables with the beautiful kitchens and the views and then your house that's falling apart. you're saving your customer way more than your commission. That's really where we earn money for our customers. I think

27:04 100%. That's a great comment. there's no reason whatsoever not to provide the information before you know before they do that. and you can always supplement that with even additional information and you're also very right on drivebys. I don't I'm sure some do it but the as a percentage I'm it's very rare that where they actually take the time to do it. I mean to their you know to their credit the information that's available is so robust that probably a lot of times there's not a big need for them to drive by. And what are you going to get from driving by? You may get some information but it's limited. The only really you know effective way to determine if there's substantial defects and so forth is to actually go visit and go in the property. And I can tell you that that doesn't happen or that's extremely rare.

28:08 Yeah. In the old days, you didn't know if the house next door was a crack house or heavy traffic just by the address. Nowadays with Google Maps and MLS, you can really hone in and see most of those. And so again, I don't know that probate referees need to drive by, but we as real estate agents, if we know, we've been to the property, we know more, the opportunity is to share more information. And I think at the end of the day, more information helps everybody. One of the lessons I wanted to chat about a little bit because I know you have a lot of experience with this is special administration, right? There's there's the normal case you're you're you file a petition either for full or limited authority and there's c it takes certain time and there's there's you know defined rules but there are times when you can't agree on who's in charge or you can't wait to get somebody appointed for all the authority but something specific has to be done. Talk a bit about the tool of special administration and how you can use that to help protect an estate. Yes, special administration is a very important tool and essentially when you u file a petition for probate that is we call sort of general administration and that requires a noticed hearing and most of the courts in California are sort of under manned and you know don't have enough support and so what happens is the time between the filing of the petition for probate and a hearing where if it's approved, letters of administration are issued, which really starts the probate and authorizes the personal representative to do things like sell the real estate and take control of the assets and really start it materially is is a long period of time. Two three months at least, but some courts are even further out than that. So, there are times when, let's say there's a reverse mortgage and there's a foreclosure notice or a

30:05 For happens, right? I have a whole podcast on this topic, by the way, a whole separate podcast. Reverse mortgages. I'm sorry. Go ahead. But yeah, that happens regularly.

30:13 Yes, it does. It's common. And so, there just isn't time. And so you so when you file the petition for general administration, this is sort of normal petition for probate, there's a box check, special administration, and then you have there's some attachments and essentially you explain to the court why there's some urgency to get this heard and to allow the your client as my client as the proposed personal representative to have certain hours early. They can't do everything that you could do because that would be just a general administration and that requires a noticed hearing. But you can take control, for example, you can ask to take control of the real estate to get it sold because it has a reverse mortgage to be able to pay bills and you know, creditors and to manage the property that has tenants in it. there are so many different situations where there's more urgency. you're there's there's a squatter in the property or you know there have been there's been you know damage done by you know derelicts in the neighborhood and somebody needs sooner rather than later to actually have authority to go in and take control. So you spell out the particular powers that you are asking for and you can do that on a an expedited basis. Different courts have different periods of time in different processes but essentially you can usually get that done in a shorter period of time as a week or a few weeks as opposed to waiting three, four, five months for a general probate hearing.

32:05 Yeah. And so that's appropriate for forclosures I think is the is the number one most common example I see of that. Managing property, collecting rents, paying bills, paying mortgages. I think running business is another one I see occasionally where I have one a case where we the petitioner had to you know make payroll and collect money and transfer accounts and such. And so the court allowed them to do that. U of course have to have a bond and there's you know other you know protections that the court's going to impose and things like that. So, well, look, Rob, I really appreciate a chance to kind of get into some details. You obviously are very experienced these matters and to get into some of the little weeds a bit, nuances. I appreciate I know I learn quite a bit when I speak to you and I hope on behalf of people who listened as well do. best way to get in touch if you if somebody wants more information or to engage your firm for probate or related material, silvermanjaffe.com is the website,

32:57 Right? And up front, we have also the phone number as well as contact information. Robert, want to thank you again so much for being available today to share with us again. You've been so kind with the time overall in the past and happy holidays and continued success and we'll talk to you soon.

33:13 Always enjoy it, Bill. Thanks for having me and happy holidays to you and the folks who are attending as well. Thanks so much, [unclear]. This is Probate Weekly. We get together every week and issue a new episode. Usually with probate attorneys like Rob Silverman, actually not often as good as that and with as much detail, but try to learn to be better at our craft, whether it be for attorneys or real estate agents or vendors, how to be more successful helping our customers. If I can help, please like, subscribe, reply, email. If you have suggestions for topics and or guests, let me know. I'm at Bill Gross Probate. As always, make today your