Conservatorship and Probate Property Sales, with Beti Bergman

0:03 So, probates are tough enough, but conservatorships, which are handled in Los Angeles County at least in the probate court, they look like a probate, they sound like a probate, they often the same judges, rooms, and so on as probate, but they are they can be a whole different animal when it comes to in particular selling real estate involved in the conservatorship. I'm really excited to have today Beti Bergman, who's been on the program several times. She's a probate attorney in the South Bay who specializes and does a lot of work in conservatorships. Beti, thanks for joining us today.

0:33 Oh, well, thank you for having me. I always love being part of this show. So, a conservatorship already to my mind already means something went terribly wrong, right? I mean, it probate, okay, people don't plan, they don't sign the documents, but conservatorship is something really went wrong health-wise, didn't plan, or something's going on that requires some extraordinary legal assistance by definition, correct?

0:59 Right. It comes into play when someone loses their competency and they can't make decisions for themselves. And if they don't have something in place like a power of attorney, a trust, a health care directive, so that it get authorizes someone to have legal authority to make decisions for them, then you're in the position of having to file for conservatorship, so someone can get appointed by the court to make legal decisions for this person. So, that that's what when conservatorships arise.

1:35 Now, I get the phone calls, I'm sure you do, too. I get phone calls on the real estate piece where they want to sell property and mom has questionable capacity, and they rush in a power of attorney form and say, "Is this going to work?" And the problem is usually the form isn't sufficient for a real estate transaction because there's some particulars that are needed by the title company to insure title. And then they can't go back to her cuz they just went to the doctor they just discovered she doesn't have capacity. So at what point is it too late to avoid a conservatorship and then you know what happens at point once you realize your mom's on title we can't sell the house without her signing something but she doesn't have the legal capacity to sign these documents. What's the next step?

2:18 Yeah, that that is such a shame if that happens because it a lot of times I also get calls from a family member that says oh my mother can no longer make decisions for herself. Can I get a power of attorney for her? And when that mother is no longer has the capacity to retain an attorney a family member can't get it for them. That the person who is creating the power of attorney needs to have the capacity to create that document and to sign that document. So that's that's what's important and once they lose that capacity someone else can't get that for them. If they're in the position of yes they need to sell this house now and this mother the person who doesn't have capacity can't sign these documents you are unfortunately in the position of having to get a conservatorship over that person so someone has legal authority to sign any sort of sale papers for this property for that incompetent person and what you have to get if this person gets appointed by the court to be the conservator it would be the conservator of the estate. There's two types of conservatorships over the person and over the estate. So over the person is to make medical health care personal decisions for this person. Over the estate to make financial decisions property management decisions things like that for example of selling a house. And so if someone does get appointed what they're looking for is what's called letters of conservatorship and then they would record it so they are on record as the person who can dispose of this property.

3:55 What's the timeline from filing to getting a hearing and being approved as a conservator, typically? I'm sure it varies. Well, the case is that It varies.

4:04 What's the common timeline? And the courts do consider conservatorships as a priority because they understand that there's someone in need of some help and some supervision. so they do consider those cases as needing priority. But unfortunately, the especially LA County, it's it's very you know, people are bogged down I mean the courts are bogged down because LA County's huge and I'm sure other counties may be like this, too. And so you file the you'll have to retain it Someone has to retain the attorney. So all this takes time. Someone looks for an attorney and then finally finds maybe someone they're comfortable with and then they retain the attorney. The attorney has to prepare all the petition papers and so there's several instruments that need to be completed and filed with the court. And then you file that and then there's a period where probate investigator comes out and a court-appointed counsel gets appointed and so many things need to happen before this court hearing and then the court hearing happens and then you have to get the order after the hearing. So all that you know, you're looking at least a couple of months at least. And once you get that court hearing then you need to get the order signed by the judge. Let's say it all goes well and the and the judge says, "Okay, you're going to get appointed.

5:26 You know, submit the order and then it's the order submitted with the court and then the petitioner is waiting for that order to come back from the court. and sometimes it takes a lot longer than you want it to. And I recently did have a case that fell right into that and the proposed conservatee was really she had cancer and she was at the end of her life. She was already living longer than was anticipated. We did need to get the order and letters because she was her condition was very fragile and things need to get paid. The facility the home she was the conservatee was in need to get paid. And the conservator proposed conservator needed to get the money access to the money to pay this. And unfortunately this proposed conservatee died before we got the order and letters. Yeah. And yeah and we and attorneys like me who are trying to get the conservatorship papers pushed through we really have no controls over the courts. We can bug them and keep asking, "Hey, where's the order? We're waiting for this. We've been waiting for this." Things like that and but we have no control over the courts. We just have to sit there and ask and it just goes through the system as it does with everybody else who's waiting for their order and letters and things like that. So you know the I guess the lesson is to try to get a some sort of plan in place so you don't ever have to be in that position where you're filing for conservatorship and waiting for conservatorship order and letters and things like that. but it does happen often that that's not the case and so we're filing for conservatorship.

7:16 Well, in the real field at least in my experience when you have a conservatorship and then the conservatee passes is well, they certainly didn't have an estate plan to avoid the conservatorship. They don't have one to avoid probate. So now the asset that was previously you get a conservatorship to process now you begin a probate case basically from the very beginning and that's a whole 'nother process and could be the same attorney but you got to start over again, right? Or I should say you have to start a probate not over again. You have to start a probate you never did one before.

7:44 Exactly. And so that so and so that [laughter] again going back to this case that just happened with the conservatee died, we are going to have to open a probate because that conservatee, the person who died did not have a plan in place. And so now we're in the position of having to probate the estate because there's just no trust. And there's no and a lot of people need to understand even if that person had a will that go through probate too. So you have to open a probate for a will. Some people

8:14 A will is like a ticket to go to probate court. Maybe you get a better seat, but you're going to probate court with your will. You're not There's no getting out of probate court. That's the biggest misconception with consumers and real estate agents that I try to say this in every episode. This is in California. Other states There's some states that are different, but California whether you have a will or not, you're going to probate court. A state plan with a trust may avoid probate court. No guarantees there, but for sure it improves your likelihood, but if you have a will, the only place to process it is in probate court. Get in line, fill your paperwork out, wait around, and talk about it.

8:49 That's right. That's right. And I have to say just to brag a little bit. I think I had I'm unique and I had one case where it was a conservatorship, we sold some property, and then the conservator was the attorney was able to move the assets into a trust. So we sold some assets in the trust for the conservatee, which was which was great. But then one property was left out of the trust. I'm going to research this property popped up out of nowhere, and we sold that through probate. So the same customer I sold a conservative property, a trust property, and a probate property within a one-year period. I think that's that was some sort of LA County record. So okay. And just to go back a little bit cuz this is an important point I think for people listening when you get frustrated in the orders. Obviously you're right, Chris right with everything, but you're right when you say that you have to wait for the court to do the order cuz in LA County me least the judges don't consider the orders set before the hearing date. So, you have to wait till the hearing date, then submit the order and letters that you want signed,

9:44 Exactly. get the judge to sign them. The judge might be on vacation, the judge could be busy, or the paper could be rejected by their administrator and they're waiting for you to resubmit. In your case, you're saying you follow up on it, which is great. Many attorneys are scared to follow up on it, and I tell the real estate agent, you can go online and see if they've submitted the paperwork or not because I've had attorneys say, "Well, I submitted the paperwork two weeks before the hearing." And I'm saying, "Well, that's like that's submitting it. That's the same thing. It's saying, 'I don't know what I'm doing' because the judges they in LA County the process is they don't consider those orders before, at least in probate court.

10:18 Right. And there's things like if there is property involved, the conservator that got appointed needs to post a bond.

10:26 Mhm. So, you can't, you know, get officially appointed until you post that bond. The important thing is to get pre-qualified for the bond before you even file these petition papers because some people don't qualify for a bond. And then there's alternative ways to still get appointed like placing assets in a blocked account or doing other things. so, there is so, you want to get ahead of that and see if the proposed conservator will qualify for a bond and can get appointed because that bond needs to get filed along with the order. The letters will not issue unless this person posts the bond. So, all those things there's a lot of moving parts to get all this in place.

11:06 And it's not that any of it is particularly deep legal theory, it's very detailed procedure. I think probate differs other than when you get into litigation, it's really about these procedures and there's there's exceptions, but generally everything has to follow the rule. And in LA County, my experience is it's got to follow the rule or you're going to go back to start and start all over again. Just

11:25 You will, yeah, because otherwise things will get rejected. They'll get bounced back if you if you don't follow all the rules and know all those tiny little procedures that need to get put in place before things are filed and things are issued by the court. So, yeah, that's all important. Otherwise, that's just going to take all more time if things aren't done in the proper procedure.

11:45 I don't know if you guys went to somebody in a court and the you know, verbally court the judge approved it. He had turns to the clerk said, "Okay, prepare the order." And the and the clerk is printing out the order and hands it to the judge and just says, "Okay, here's your order." I'm like, "Wow, if only it happened like let's get you Imagine the time spent." Now, it might be that he wasn't as busy or I again, I'm not I'm not impinging on the judges in LA. They have a whole different case load. So, but still it was like a it was like a miracle. You can just print out the form and sign it right in front of us. That was fantastic.

12:14 Yeah. [laughter] So, selling property in conservatorships is somewhat different in than probate though it's handled in probate court and it's in the probate book or the probate chapter of rules and such. But the procedures are different. So, talk a bit about when is court confirmation required? I think let me just ask a question. Is it true that anytime we're selling the property that's the residence of the conservatee that requires court confirmation by definition?

12:40 That's correct. That's correct. So, if it's a conservatee's residence, then there are again procedures that you need to follow that's different than let's say other real property you may be wanting to sell in a conservatorship estate. So, the conservator needs to have if they are able to have a discussion with the conservatee and ask them tell them that the house needs to be sold and why and try to get the conservatee's position as to whether they will consent to that sale or not consent to that sale and then you have to report that discussion with the court. So, that's that's very important and you do need to do the court confirmation for the sale. That's unlike other real pieces of real property that you may want to sell in the conservatorship estate, you still need the court confirmation. Now, there's a probate code called 2591, where you may get authority to sell real property. The residence is different though. The residence always needs the court confirmation. But, there's local rules and most counties, I think, have the local rules where you need that court confirmation anyway for all real properties that you're selling in a conservatorship estate. And I'm happy to cite that rule for, LA County, which is where I am. It's [rule number unclear]. And so, it any sales of real properties, you need the court confirmation in conservatorship estate.

14:01 Is a court confirmation like on a probate requires publication, requires an attorney to appraise report, the sale has to be within 90% of that appraised value? I have seen exceptions and the judges have discretion, but in general, it's going to be hard to get that sold other than with an appraisal report at [unclear] of value of the appraisal report. And then, there's a potential overbidding process, which happens as well. So, those are the That's all the same process that goes on a on a on a probate sale. and the difference here is you don't have heirs kind of getting the profits. And you don't have an heir, hopefully, involved in the victory of getting the property at the cheap. So, how does it Does it look different in your experience than a probate sale court confirmation? Are they Are they identical? The processes are almost identical. Are they identical in terms of real world?

14:52 Yeah, they are. They are. So, with the court confirmation is subject to overbid. And so, you do give notice to any interested persons, anyone who has requested special notice. That is something that someone can request and get notice of things like this. someone that may be related somehow to the conservatee may be interested and want information about the conservatorship proceedings. They would get notice of this. And, at the court hearing, the court confirmation hearing, it is subject to overbid. So, people can come and bid on the property and the court will sell it to the highest bidder. And someone can object. So, anybody that gets notice of the sale can come and object and say, "No, we don't want this sold. The conservatee should stay in the house." And then that kind of prolongs everything because then it's kind of thrown into some sort of litigation. The conservator can ask for They can ask for instructions from the court as to what to do in a situation like this. And the court will let people argue about why this shouldn't be sold or should be sold, things like that. So, that that prolongs that process if that happens.

16:04 You know, I would think that in conservatorships if it's a residence, either they're already out of the property or they are There has a There's a plan in place for when the property is sold. Meaning, they have some sort of a home or facility or family member, something that they've already kind of worked through before you even start the process. Unlike, you know, some homeowners sell, you know, I was one. I put my house on the market once and I didn't really know where I was going to go, but I knew we wanted to sell and we wanted to move out of the area. but with conservatorships, I imagine you have to have a plan in place and you have to probably explain that to the court. What the plan is. Are they going to a nursing home? They're going to a facility? They're going to

16:39 Right. Right. So, there needs to be What alternatives are available for the conservatee? Because the court's main concern is the protection of the conservatee and the conservatee's best interests and well-being. So, there needs to be a plan. Sometimes it's unavoidable to sell the residence because that's the biggest asset and the conservatee needs caregiving. There's a which is very expensive, and that may be the only source of funds that can be used for that care. And even if the conservatee doesn't want it, or, you cuz that does happen, the judge will order it or approve it not nevertheless just because that's the only way to protect and pay for the expenses of the conservatee. And it is unfortunate, but it does happen.

17:30 You know, I've been involved in a few cases personally where, you know, for the safety of a parent, you know, they just couldn't live on their own. they're widowed, they're had health issues, they had, you know, falling down, safety issues, security issues. And, you know, yet, you know, because they had sound mind, we couldn't talk them out of it. Like, you know, it's it's not so simple. It might be a better decision for them to sell their house and move to a facility that's safer and better care, but there's something that that people get scared. You just sitting me there cuz you know, the line I hear all the time is, you sitting me there cuz you want me to die there. And it's like, well, no, we want you to live a better life. I imagine with conservatorships, even though they may not have capacity, they still have some ability to express something, and I'm sure that's a natural reaction for them, too, right? Crying and I've seen it in court and resistance. And yet, there's no other financial option that's medically sound, right? They're in the house by themself, they're falling down, they can't afford a 24/7 care in the house. And so, they're looking to move for to a facility that's properly designed for elderly people. What is that like? That must be a challenge in the court. And then, you know, is it And you get one you get one sympathetic daughter and the whole thing kind of falls apart, I would think.

18:48 Right. I mean, it's hard for everyone. It's hard for everyone involved in when something like that happens. I mean, alternatives should be explored before we get to that point. You know, reverse mortgages are out there. That That's a possibility. But, sometimes that's that's the only thing that you can do. yeah, and yeah, it's just it's just unfortunate. It's unavoidable unless some people plan ahead of time, but planning that's a financial matter cuz even if you plan, if you don't have enough money saved up for caregiving at home, which is very expensive. It's it's it's just a huge expense. That's the most expensive way of getting care is having private caregivers in your home.

19:35 Right. and so probably all the majority of people may not be able to afford that. Right. Honestly. Right. so if there's family members that can help and there's a lot of times there are family members who will come forward and be able to, you know, kind of take care take care of the this conservatee, but that's not always the case and that and they have to be moved into a home, a facility or something like that that costs less than a private caregiving.

19:59 Yeah. And it just seems like again, like I said, there are facilities that are designed for the safety and the fuller life. You know, I think that like in my experience, we have family members who are living very small lives by themselves and some of these, you know, facilities have, you know, group activities and there's, you know, group meet, you know, meals, group games, group outings and such. And you say, you know, "Mom, Dad, look how much better life you're going to have." And the reality is they feel like they're just going to go and wait to die. And they, you know, while some people, you know, flourish in those environments, those are challenging. And then you see in I would see in court, you know, they would have the, I guess the investigator would say, "No, she really wants to move." And recount like the whole horrible and the whole and the poor attorneys are like, "We don't really have a choice. Like I'm not heartless. I'm trying to save this person's life." So, you must have some pretty thick skin to sit there in court and deal with these situations. [laughter] You seem like such a nice person. I just can't imagine that situation.

20:55 No, and I and I've done so many of these cases, and I've also on the panel of court-appointed counsel, so I'm representing a lot of these conservatees in positions like that. a lot of times the court will the court will appoint what's called a court-appointed counsel to represent the proposed conservatee and when a conservatorship is being implemented, sometimes they the courts will pull them in just for some of the sale of the residence to see if that's the best thing to do and have an advocate for that conservatee. So I've been in that position many times and I'm there advocating for the conservatee and if the conservatee doesn't want it that that is my job to object to that the sale of the property and a lot of time you know the courts have seen this all of us have seen this many times and sometimes the courts you know understand that that that's still only the only option is to is to sell the residence because there's just no other source.

21:56 It's the best option. I mean it's hard to say that to people but sometimes Yeah. just safety wise I mean we went through one case was just heartbreaking for a family member to watch their parents struggle and it's like if you just move them and they can put a nice facility a nice like a adult senior facility it look great like I would move in there it was it was nice. But you know but again you know there's a there's a legitimate concern you're just you know putting me off you just want to sell the house and pocket the money and that wasn't the case at all but it's hard to it's hard to convey that I think you know in that process. You know the other the other thing I see is that it by its nature conservatorships are very public open transparent and then that leads to more things to disagree on. So I know when I used to go to court every day you know pre-COVID I would see hearings and there were you know they would submit accounting and they'd say well you know and you know Beti took so and so to McDonald's and there's the receipt has two hamburgers but you know we're only paying for you know mom's hamburger and not for not for the daughter's hamburger and they're you know I would watch the court argue for 15 minutes and think with all these attorneys here that just cost like a hundred bucks in attorney's fees to save $15 on a hamburger and a coke, right?

23:15 I know and everybody could have had a hamburger or two by then. I know and that's true. but if it wasn't put to that level of scrutiny that and people know that or somehow the word gets out then everybody could be buying hamburgers for everybody and know like oh we can fly under the radar and you're right. I mean with you know several attorneys there talking about that accounting that's a lot of money a lot of fees getting spent. And the purpose is to protect that conservatee and their estate and make sure it's not getting spent inappropriately. yeah unfortunately the that that kind of thing does happen. If it's very negligible I've seen everybody agree okay let's let that go and let's focus on the big ticket items. But it's also on the other hand it's very important to scrutinize all the expenditures that's going on because there have been fiduciaries whether they're a private or lay people a private professionals or lay people that have spent money in an estate and that shouldn't have been spent. Let's put it that way.

24:32 [laughter] And you know especially you know a lot a lot of press is has been out there about more celebrity cases so you hear about that and so that that's when the public really hears about you know what happens in the estate and what got spent and things like that.

24:50 You know one of the nicest people I've ever met in my life was Jay Leno and to see him go to court for conservatorship for his wife and you think for all the money he must have spent for attorneys in his career, I mean,

25:00 Yeah. you would think he spent tens of millions of dollars. He must have made hundreds of millions of dollars. So, you would think tens of millions of dollars in attorneys fees over various contracts and negotiations and whatever and did not have a plan that would protect his wife's medical decisions. Like who was not paying attention to that? That's when I just and I've met him. He's just the nicest person I've ever met. He's just amazing guy and just so

25:23 Yeah. But this is hard that So, that this where it comes out I know that part of your practice also is estate planning, avoiding conservatorships. And so, I guess I would say what are the warning signs? Because if you don't have a plan, that's bad enough and anybody can go like that, I guess, theoretically. But, you know, sometimes some of these things are incremental. Health is more incremental I think sometimes that capacity to you know, cognitive ability. Although there's accidents and so on. What are some of the signs that somebody really needs to think about this? Like, hey, mom's really not on her game now and while she doesn't have all that She's not a, you know, tech billionaire, she's she has a house. We need to protect her medical decision-making ability. What are some of the signs that you think people need to really think about getting into action and getting a plan put together of some sort?

26:10 Oh, it's so important to get way ahead of the time where someone starts you start suspecting, oh, the capacity's diminishing. Because once again, the person creating these documents need to have the capacity to retain the attorney to prepare these documents for them. So, the attorney needs to speak with the person creating the documents and that person needs to tell the be able to tell the attorney what they want, what they don't want and things like that. So you don't want to wait until -oh, we think some capacity issues are starting to crop up. Get way ahead of that game. I mean, everybody should have a plan in place. really as soon as you become a an adult with I mean, if not anything else, get at least a health care directive power of attorney. If you have nothing to put in the trust, and then if you once you have a house for sure, you want to get that living trust in place. because how do I put what was I going to say? The because it's it's just it's just you don't know what's going to happen. You could be young and something can happen to you.

27:28 So, you don't think like, "Oh, I'm not going to need that. I have many years to think about that." And you know, estate plans are older people. And that's not the case because I've had a lot of conservatorship cases where a young person got into I have a case that where the I mean, I think he was in his 30s, and they got into a car accident. And he became incapacitated, and the wife is taking care of him, and they needed a conservatorship. So you want to plan for anything. And being elderly with dementia is not the only reason people become incapacitated.

28:07 Yeah. And I'll tell you that that case with the young person, I mean, that got into a huge litigation because the parents became involved. There was a fight over who should be conservatorship. There was a wife and the parents and things like that. And so, you know, if you don't have that nomination cuz in the estate planning papers, you nominate who you want to be your conservator. And that will have priority over other people. And if you don't have that, then there's a fight over who should be it. I mean, there's still a statutory priority of who gets appointed, and the people could argue like someone's not fit to be it for whatever reason, but you know, the best thing you can put in place is some sort of plan to so that your wishes are known and these are legal documents that have effect. So you should put that in place really anytime in your adult life.

29:03 [laughter] You know, I had a I was in court one day in the research room and this couple came up to me and their son had been in a motorcycle accident and was in the hospital incapacitated in a coma and they're from Japan and of course they didn't have they didn't even know about you know a conservatorship or you know laws and everything and the and the young man had some substantial assets and they you know they had assets to make the right medical decisions they just didn't know what to do and obviously at that point you need to get an attorney and but it's like what a shame if you just filled out some forms ahead of time they would be able to walk in the hospital and make the decisions and I think you know now I know when I go to the hospital cuz I'm older I think I go more often to doctors they're very careful to ask about a medical directives and I know I'm in the Cedars system and they put it right in your profile if you have it or not

29:48 Right. It's very important and the reason I when they ask that I always feel like they're looking out for themselves of course they're also looking out for me because if I have the directive and it's on file then and they know where it is then you know at least they know who to call and ask questions of but if you don't have anybody there it's not it's not pretty it's not it's not a good place to be so well look we can go on for a long time I know I've taken a little longer than we planned on so I do want to bring to an end but Beti thank you so much for sharing with us some of the issues on conservatorships and real estate in particular and I think just conservatorships and I think of nothing else hopefully today was a horror story to scare people getting to an estate plan even if you don't have a lot of assets get one in order to I think prepare you in case of you know God forbid in case of some sort of a medical issue that you're not able to make decisions and that way you don't get somebody else involved so thank you so much if you want to hold of Beti at [phone number shown on screen] is the phone number and the website we have up there is peninsula.law, P-E-N-I-N-S-U-L-A dot law if you want more information. Beti, thanks so much for being with us today.

30:56 Oh, thank you so much for having me. Really it's such a pleasure always. I always learn so much from you. Thank you, I really appreciate it. And for those for the rest of you this is Probate Weekly we get together every week with a new episode talking to attorneys who specialize in probate administration, trusts and in this case conservatorships which is part of the probate process. Hope you learned a lot, I did. Love to get any questions you have, any comments. Feel free to put them in the social media you're watching or reach out to me at Bill Gross Probate on social media. As always, make today your best day ever. Thanks so much.