Real Estate Title Problems in Probate Court, with Attorney Mina Sirkin

0:02 So, one of the things I always say, it's not a problem until it's a problem. Then you have a problem. And in real estate, one of the problems can be when the property is to be left to somebody else. The decedent passes. What happens with the property? Well, you say, "I have a will." Well, that may or may not work because the will is not going to get you out of court. You're going to take your will and go to probate court. And then if there's a problem with that will, you need attorney to help you through those the litigation that might come as a result. One of the people we deal with who's done a great job, I've been involved with both with her and her clients, also been on the other side a couple times, unfortunately, Mina Sirkin, who's a probate attorney specializing in litigation based here in the valley in California. Mina, thanks for coming back on our program.

0:45 Thanks for having me, Bill. So, you know, the most common problem I get that people talk about that involves litigation is your mom and dad died and they either had a trust or they named my brother in the will, we opened a probate and you know, nothing seems to be happening except for he's collecting rents and he has access to accounts and the person feels like they're not getting information they're entitled to. Now, a probate has a little more specific controls commonly in trusts, but there are some legal requirements. What are the types of things that people get litigation on where you can protect somebody and protect their interest in property when maybe they're not the sole beneficiary, they're not even the administrator or the trustee, I guess, but they're concerned about their assets.

1:31 Well, one of the things that a beneficiary can do is they can demand an accounting. And if the trustee is unwilling to provide an accounting then after 60 days after the demand is made you can file a petition to compel an accounting which would then show what came into the trust and would left you know if there's rents to be collected assets you know the expenses to be paid I think that that would resolve the issue at least for the beneficiary to see what happened. Now if they see something wrong in the accounting of course you they would have to object to the accounting and file various other types of petitions to get the relief they want. but the very first step is demand and accounting and when that demand is done then you know there's a you have to give a reasonable period of time for the trustee to give it to you. Now, unfortunately, if you're a beneficiary, you're supposed to be receiving some assets or some income perhaps or theoretically and you're not. Now, you have to get an attorney. is this the same as litigation where you really are starting up front with, you know, a substantial retainer or, you know, is it contingency or does it start slow? Can you hire can somebody hire you to start the process of requiring notice and then, you know, the motion for accounting and follow up with that?

2:55 What's that process look like? Well, there's different parts. You know, if you're just, you know, being retained to compel an accounting, you know, it's a relatively small amount of retainer, we kind of can tell what can happen. But then when it goes to court, if the other side objects to an accounting or causes delays for one reason or another, then it can get expensive.

3:22 But most judges are pretty good at ordering accountings. their simpled order. You know, if you're a trustee, you've acted from this state to this state, account for what came in and what left. And you know, that that's something that can be done. It also forces the fiduciary to allege what the property was worth at the beginning and what it's currently worth. So there is a parameter there for those. But most litigation is done on an hourly basis. some that are done on a contingency. It just depends on it's a case by case evaluation.

3:59 I think also at the initial evaluation, one of the assets you bring to a relationship with a client is your deep knowledge of the players in the industry, right? I'm always interested that your comments on certain attorneys because I can just maybe see the number of cases involved with or the number of times they go to court. I may not have been in court or I might see just the 8:30 calendar which is pretty light generally speaking but you've been across a lot of the attorneys in Los Angeles and the ones you haven't been across that's probably a problem right there right so talk a little bit about what does that mean the experience you have in this business and the kind of the tight-knit network of people that are the good guys

4:37 Trust estate litigation is a fairly small market of attorneys there although there are some newer ones coming in that I don't know. Of course, I don't know the younger set of lawyers that are coming in. We're getting to know them quickly, but after 34 years, the number of lawyers that kind of stayed in the practice is fairly finite. So, we tend to come across the same lawyers again and again and again, various different cases. So, we're somewhat familiar with their how they operate in the case, which is very helpful actually. It's called institutional memory. Institutional memory helps you know gauge you know the they say the way you do one thing is just the way you do everything.

5:25 So the so it's helpful in getting cases resolved too. If you know you've settled a case with someone before you're much more likely to be you know inclined to want to settle with that person again because you know that makes everybody's life easy. I'm sure like me you've seen in court, you know, attorneys walk in who look very lawyerly. They're wearing a their man two $3,000 tailored suit. They have all the accoutrements. They come from a big law firm, but they don't know about probate notes or they, you know, don't know that what works in civil court is different in probate court. And I and I, you know, I see that all the time that the attorney who doesn't really do probate but does civil litigation is really not effective or nearly as effective as somebody who specializes in the probate court, knows the local rules, knows the judges, knows the attorneys. you know, when somebody's talking to you about representing them, obviously you're this is your specialty is probate litigation,

6:28 Right? probate and trust. I'm concerned. Yeah. Those three things that are all handled in the probate court. You're not doing DWIs. You're not doing corporations.

6:37 No, I don't. I don't venture out of probate court. Sometimes you have to sometimes you have to go to civil court on a probate matter. It just depends on the situation. And then sometimes a civil attorney will come into probate court on matters, but it seems to me once they get past a general filing of credit claim or something, they're a little over their head dealing with somebody like you or competing with somebody like you or what's the right term? Not competing, but advocating against your client's interest. They're they're a little in over the head is my experience

7:07 Sometimes, but they're also sometimes when somebody comes from civil court, we get a fresh view of, you know, how somebody else sees a probate case. So sometimes it actually works well. They come in from civil and they bring with them some of the you know the data they collected in civil and sometimes it applies well in probate and sometimes it doesn't. It just depends on the nature of the circumstances of the facts. It doesn't work well when someone comes from civil to conservatorships.

7:41 Rarely does it work. but in probates sometimes it's all right. Sometimes it's fine. yes, they get lost in the details, but that learn there is a learning curve for every type of case and probate's about a year and a half if I was

7:59 At least at least I would think. yeah, I saw one recently. What was interesting, I was I have a pro case that's in civil court and I guess the judge issues like a proposed ruling in writing before the hearing and I thought, well, that's kind of cool. like you're going to see how he's going to rule and the reasons why he's ruling and I'm not quite sure how you would object to it or what the process looks like, but in our case, it went our way and the other guy didn't do anything. We just showed up and you know, the other the attorney, but it was just interesting how the process is so different. I think the other thing is probate court litigation, but probate court in general is so processor, at least it seems to me. I'm sure when you get to the case and there's hearings and motions and you're arguing that that it's very much about arguments and research and positioning, but seems like so much activities is procedure that you're going to have if you don't follow the procedures, you're not going to get a chance to make your case to the judge.

8:54 Yes. If you miss the procedures three times, the judge can just deny your case. So, you got to clear all those notes and then the judge will give you an opportunity to go one step further. It all seems to me that no, I mean, I've been in court a lot of times, not as much as you have been, but it just if you're going to object or fight some other party, it never goes well for the pro per. Meaning, I've seen pro pers fumble through the administration on a simple probate. And I get they want to save money and they have nothing better to do with their time. Okay, maybe. But if you're trying, if you're really your sibling is doing something wrong with the property and you're at risk of losing it just seems the process is so against the objections and filing motions and filing objections at Tommy Manor and noticing people that there's just no way a pro per can manage that.

9:46 It's harder. It's it's harder, I think, for a probate for a pro per to navigate the nuances, especially when you got one pro per against another pro per. We see that in many cases

10:01 Where, you know, both siblings don't have an attorney and then the judges tend to get frustrated with that because no one's following, you know, a straight path here. You know, we keep tell the judges keep telling people this, you got to clear these notes. By the time they come back to the next hearing, they've forgotten that they got to clear the notes first.

10:21 You know, I think when I was young, when a judge would tell you something like that, you'd pay attention and you do what the judge tells you. Somehow today I think people watch too much television where judges are arguing and they argue with the judge and I always feel like that's not going to end well. Like just do what the judge told you. They told they gave you the answer. That's the answer you're going to get. And in general arguing with them is never a good look. I don't think.

10:41 Well, you know, people come to court and they want to air their grievances. A lot of times judges will give them an opportunity to say what's on their mind,

10:50 You know, but if you've gone a half hour, you've taken a half hour of the court's time. Yeah. And in airing that grievance, the judge has to move his calendar. You know, there's 50 items on the calendar, they cannot give somebody a half hour

11:03 Alone. On the positive side, I think that having an advocate who's experienced, knowledgeable, known within the court is so valuable. I always go back to the first case you and I worked on together. It was a contest between two heirs or potential heirs or whatever, two parties who thought they're entitled to the to the property and they agreed to have a special administration done. So, they were going to just sell the property, put the money in the bank and over argue about the property. Classically, in a limit authority case like this with court confirmation, you can't sell the property for less than 90% of the court's appraised value. And in this case, we got the appraised value and then discovered there was serious mold problems where we were lucky to get I think it was about 85% of the value of the property and we prepared and you presented to the judge and said here was the you know inventory appraisal here's the best we can here's what we discovered you know nobody's offered anything better than that and while many people say you can't sell it for less than 8% the answer is well we did right so talk a bit about what it takes to get the judge to maybe you know that great pictures of baseball work the outside of the plate. In some cases, you're getting those edge cases approved or discretionary case approved. Is a difference between the client getting what they came for or not? Talk a little bit about working those edges a little bit.

12:25 Yeah, I mean, if you're inside the ballpark as opposed to if you're outside the ballpark, there are differences, but I mean, it depends on how far away you are from the 90% and what efforts you actually made to get to the 90%. so the judges will often will question the brokers, well, what did you do? What' you do to get this offer? how many views did you get? How, you know, how many offers did you have? Was there any actual negotiation? They want to know that there was some good faith effort to get the best and highest price and this is all you were able to do. And so maybe if in that particular case, if you had come to court and told the court that yes, we had three other offers, but after the inspection report, you know, they dropped out and this is the remaining one. that is likely to be, you know, something that the court would consider because you know, there's substantial amount of effort was made in the sale of it. It just depends on the circumstance and also the condition of the property. You know, hoarders, houses, judges understand those are not going to sell for market val the fair market value. That's just the way it is.

13:42 Especially the appraiser doesn't see that or note that they don't know the difference and then you know so they're appraising based on the outside and the inside is a complete nightmare. Yeah. I mean appraisers could you know identify by category whether or not you know that this is of average condition or below average

13:57 But I don't think that that gives you a whole picture. Pictures though of the interior of the property do tell a thousand stories.

14:07 Yeah. So if you do have pictures if you're close to that 90% or if you know you're below it and you display you know what the interior looks like you know I think and even you know judges who have seen these over and over again they just want to know you know if I'm if I'm the buyer am I going to be paying full price for this house

14:33 When we have court confirmation I'm sorry. We don't have confirmation. You have full authority. you know, people often feel like, well, we don't have to really do anything. Well, you still have to get a notice of proposed action by heirs or various parties. And I've seen a couple different strategies on that. I think again I think I was involved with the one where we got a notice of proposed action. The other party objected to the sale and I was able to contact the objector and say, "Listen, you can object, but all it's going to do is we're going to go to court and here's the process and here's the expenses and you're going to lose. You're paying for half of all that." And, you know, ask me questions about why we sold for that price and I was able to get him to drop his objection. I know there a couple different strategies on when to file the notice of proposed action to file it either once you have a contract and you're clearing conting contingencies some attorneys when you list a property right away does the time run out on it what's your strategy and I also saw one recently I listened to attorney explain why if she can get the parties to agree to do proposed action maybe at 95% of the list price so that if there are concessions or it doesn't sell full list price you don't need to go back out and renotice. What are your thoughts on the best strategies for notice of proposed actions? And I know it varies by case, but do you have any particular thoughts on that?

15:54 Well, we generally would like to give them the list price because, you know, obviously that's the first line of objection that we usually get is you listed it too low. So once we get over that hurdle if that is you know something that that's close then once we get offers and you know contingencies are ready to be removed I think then we go back to our beneficiaries and we just tell them listen here's here's what we got and if somebody has an objection they can come back and tell us otherwise you know when we have objections the only thing that we can do as lawyers is take it to a court and have the court decide whether or not, you know, that objection should go forward or whether or not the sale should go forward. but you're right, it does create unnecessary expense. Sometimes people are fine. You know, we'll we'll say, you know, the house was listed at a million, but we got an offer for 900,000 and this is non-contingent and it's ready to go. Is everybody okay with that? people will generally you know respond one way or another and I think most of our cases are fairly successful in terms of you know because the brokers are wise about pricing the properties so that they're usually within a parameter you know of what we think that they should sell for. And beneficiaries are advised, you know, we're not going to get exactly, you know, the listing price, but we may come close or sometimes we think that the listing price may attract a lot of buyers. It just depends on, you know, where the propertyy's located and its condition. And in that case, you know, no one's going to object to you getting, you know, an offer above an asking price. is only

17:57 Below the asking price. But yeah, we generally like to communicate with the beneficiaries and we know our beneficiaries personalities fairly well from the get-go.

18:10 So, we can tell, you know, usually if we're going to need to go again and renotice after contingencies are removed or not. But most of the times people will tell you in advance if they're okay with the listing price.

18:26 Just kind of curious about your opinion on something. the core rules haven't been updated, but real estate the businesses was changed dramatically a year ago where it used to be as a listing brokerage we would have our clients pay us the full commissions for all real estate transactions both sides 5% 6% and then we would offer a portion of that to the buyer agents in writing in the MLS that they would know that they'd make an offer for on those terms. And in LA, the local rules limit for court confirm sales to 5%. Now, you know, as my listing agreement only says my share, which is two and a half or 3% depending on whatever the number is, but let's say most commonly two and a half percent. And I had a case where the buyer's agent asked for three and the attorney said to me, "Well, they're three and your two and a half makes five and a half." And I said, "I appreciate that, but the local says five, I'm only collecting two and a half. They're getting a credit to cover the buyer side. they're not paying the commission. so technically is compliant. Has that has that change come to you at all? Have you looked at this?

19:34 Yes. Yes, that change has come to us and the judges still hold us to the 5%. So they really say, you know, if you're going to give a credit and where that credit was for you know, a reimbursement to the buyer of the commission, we're still within 5%. So I've had I've had a situation where they the judges have said that but sometimes we credit for different things. Sometimes

20:02 Sometimes the credit is you know we credit for all kinds of various things in different sums. But again that's circumstantial just depends on the case.

20:13 I have to tell you I have told buyers agents listen I you know it could be limited to 5%. It's not my decision. You might consider your commission two and a half, ask the for half percent commission towards closing costs and then your buyer side you can ask for 3%. And it'll all it'll all work itself out. And I said, you know, is that is that dishonest? Well, no. It's all in writing. and how the again these are complicated things. It'd be nice if this the court updated the rules to be more precise, I think, but it is what it is. So, we'll we'll just go.

20:45 That'll take a while. [laughter] That'll take some time. Do you and then does that 5% rule in your opinion apply for just court confirmed sales or even for standard full authority non-confirmed sales?

20:57 LA County says 5%. So regardless of court confirmed or full authority that that that's what it says. Interesting. Have you ever seen that picked up at like final accounting? Because I'm wondering when that would be an issue on a real estate transaction without court confirmation. Theoretically, who's catching that? And if it's not till the end is

21:19 The probate attorneys catch that that that's the and then the judges might deduct you know any difference from the executive's compensation.

21:31 That's interesting. That's interesting risk that you got to be aware of because yeah I mean you we try to be mindful of that you know every time we have you know a sale happening but you know there's a lot of things that that go on in sales that aren't necessarily on the accounting but the accounting does show a copy of the closing statement usually. So the closing statement will identify, you know, what occurred,

22:01 Right, in the process. Interesting. I think that's one of those things where there's probably a lot of pending transactions and not enough hasn't been caught enough yet to be to everybody's attention, which one I'm paying attention to because eventually my guess is that's going to come down at some point. That's just too easy to

22:17 Yeah, it's it is identifiable from the closing statements that are attached to accountings. Usually,

22:25 You know, a good chunk of the people follow my platform are real estate agents. and we get all kinds of people, attorneys, families, heirs. but, you know, a good chunk of real estate agents who, you know, want to do business with attorneys, want to earn that business, earn that relationship. What are one or two best practices that you see for real estate agents that, you know, develop business relationships with you that merit you referring to business? What are the things that you look for?

22:49 We look for honesty. That that's for sure. We look for diligence. You know, there are people who go out of their way usually in trying to solve the problems of a case and you know, realtors are good at that. Realtors can pick up the phone and talk to somebody in a way that we can't. So, I think that those are very valuable skills that we like to see. I have seen some brokers that went out of their way, you know, if the property needed to have the bathroom cleaned up, they set somebody specifically for that. didn't charge us for it, just considered it as just part of the service.

23:31 You know, those are all just goodwill. So, it just depends on, you know, the situation. But having the skill to talk to beneficiaries is probably number one on my list.

23:42 Interesting. And what would you say? What about two things you've seen that are problems that would cause you to go, "Wow, why is this person still in the business? I need to avoid that."

23:50 Greed. [laughter] Greed is bad. Greed is bad. We have to be We're fiduciaries to these beneficiaries. You know, our clients are fiduciaries to the beneficiaries. We have to be mindful of what we pay out of the estate, especially, you know, when it does come to commissions and costs and things of that. We want to make sure that things are fair.

24:15 You know, I can't explain why something costed $17,000 to the court and to the beneficiaries. I have to be able to justify that spending $17,000 actually resulted in bringing 25,000 or something greater than that. Right.

24:34 So, we're mindful of those things and yeah, so but I think we've had for the most part have had really good real estate attorneys that handle this area. Most everybody that comes in understands the difficulties that we have with beneficiaries. And people are grieving. They're mad. They're mad at everybody. They're mad at the broker. They're mad at the attorney. They're mad at their sibling, doesn't matter who it is, they're mad at them.

25:08 You know, the pro business in LA used to be much more opaque in that you had local courouses that handled the probates, you know, years ago and they consolidated that, which I thought was great. And then I think also the COVID while a lot of problems, I think being online, not knowing who's watching you is also opened things up a bit and made things more consistent. Whereas in the past, I got into this because the house across the street was a probate and the listing agent wouldn't give me any information and I'm trying to get my best friend to move across the street. And I was really upset. I said, "Well, that's how I do business. I'm going to make that my life's mission to unseat them." but nowadays, I think that things are much more it's it's a group of people who kind of all know each other, at least attorneys for the most part, know each other much more carefully, especially when you get to the litigation side of it. So again, I think some of these questions I've asked are more of the exception, not the rule. and I think over time things have just the five, six years I've been focused on probate, things have improved, I think, tremendously in terms of it's kind of harder. I think with COVID and the staff and the budgets and all that, but at the same time, it's more it's more transparent what's going on.

26:18 Yeah, I think so. I think some of that is different. You know, there is a lot of value in being there in person. I think when you see somebody you know eye to eye there is a different type of interaction

26:31 That occurs which in sales you know 99% of the sales are in court in person but most of the other transactions are done online or on the phone and something's lost in that you know before we used to be able to go to the cafeteria with someone and sit there and after lunch the case was resolved you know, everybody would take back a proposed resolution to their clients and come back with an okay to settle. but that does not happen that much anymore. So,

27:07 I think that's a problem. If there's one thing I think it's it's especially with attorneys, it's easy to demonize the other party. You know, when you're a room with them, it's a lot harder to do, I think, because you see that they're human and to their face, you have to act with a certain amount of propriety and professionalism. And if it's all just on Zoom calls and emails, I think it I would imagine that make the settlement process more challenging for you.

27:30 Yes. That that has become more challenging. And I'm sure used to I'm sorry, people are litigating more now because that face-to-face interaction even among siblings is gone.

27:44 And imagine used to resolve matters because you just happened to be in court one day and bumped into the opposing council, not by some meeting. Hey, can we do this? Can we do that? you know, just kind of formally you're on one matter together, another matter, you're opposing each other and things kind of work out. Whereas today, like you say, not meeting person as often, I'm sure just makes those opportunities less common.

28:04 The opportunities are less, but you know, we've learned that you have to actually call people and try to make an appointment to come to some kind of resolution. But yes, it was easier when you bumped into somebody in the courthouse and said, you know, I need five minutes of your time,

28:21 Right? And they gave it to you. They gave you that five minutes. Right now, getting people the phone is so challenging. It's it's really interesting how people on one hand, they're not driving to or from court or sitting in court for hours a day and yet it seemed like they're less available. Well, how did that all that work out? And I know

28:36 You know for you the challenge is I think I'm sure like me you know with technology now and online you know and signing things with edocs it's so much easier to do the business that it's easy to get lazy about doing the relationship stuff and I imagine with attorneys it's challenging that you don't see each other. you know that said and I know like me you have a busy life you have a family life you have you know ups downs we all have stuff that goes on. Do you make an effort? You know, have you I know recently I try to make an effort to get out more because I say, "Well, if I don't make myself go to events, I don't ever have to meet anybody, but that's not good or healthy." I don't think from a business.

29:14 It's not healthy. No, it's not healthy to do things just online. I think there has to be some effort made by everybody to meet people and, you know, you haven't seen somebody for a number of years, they might look very different. I mean, I don't know, [laughter] but you have to have some human contact. I think I don't know how this is all going to work out with AI coming into the picture. I think that's going to change the humanness of things even more.

29:42 Well, I think I think for you the blessing is it's going to make it a lot easier for people to do routine legal work poorly and then that will lead to more litigation, I think, at the end of the day. And I think the litigation, it's kind of like the military. While on one hand, you know, there's conflict, the other hand, with more technology, it's kind of like, you know, drones that can shoot people and, you know, more missiles. I feel like the AI is going to give attorneys more efficiency to have more petitions, more motions, more fruitless stuff that you have to search through. But that's going to make having a great attorney like you on your side, I think, more important going forward.

30:20 I think there's going to be a give and take of things. There's going to be a lot of self- filers, a lot of errors. The courts are getting frustrated, although I noticed that, you know, even courts are saying that they're going to go use AI. So, we're going to get unusual and strange probate notes perhaps in the future, but that don't apply mainly because the AI is not trained, but that's to be seen in the future.

30:48 Don't think with it. You know, I look at the go online look at propane. I imagine over time if they train on their own data, it would be extremely efficient, right? Rather than waiting for the attorney, they could spit out an AI version of it early and make it available to view. Not to say it's binding, but at least, you know, give you some idea based on their knowledge and how they look at doc because the data source they have would be so valuable. I would think

31:12 I think there would be some value to that. But although recently I've got a probate note that said where's the promisory note and the real estate rents in this in this accounting and I looked at the accounting I was thinking we don't have any real estate in this case and we don't have a note I don't know what it was talking about so it created more work to have to explain that we don't have any but you know I don't know how that's the data the data needs to be you know vetted And things need to be I think there's going to be some training all around. I think

31:50 I think that area has a lot of promise just because you have a defined training sense that if they do it properly would benefit all of us really knew you know the actual data of cases filing dates things like this I think would be helpful. Well look I've left we've gone a little longer than we planned on and at your hourly rate I got to cut things off here. I'm just teasing. Mina thank you so much for always being so generous with your time and information. you know, just for those watching, I met her in court when I first started, I think about six years ago, and when I really started going to court for probate and but she, you know, kind of took me by hand and introduced me to people and let me watch things and really learned and has been nice to be a guest here multiple times. Mina Sirkin, who's a probate, litigation attorney here in Southern California, [phone number shown on screen]. If you can't get that because you're driving, reach out to me. I'd be honored to make that introduction. Mina, thank you again for your time and for your generous spirit in this business.

32:42 Thank you very much, Bill, for having me again and I appreciate being on your show. Thank you. Fantastic. And for the rest of you, this was Probate Weekly. We get together week with probate attorneys, litigation attorneys in probate. Not often as accomplished as Mina, but she's always been a great guest to help us learn. Hope you learned some things today. I know I do. The advantage I have is I get to ask the questions I want. If you have questions you want to have asked, please send them to me. Let me know your feelings about this episode. Like it, subscribe, put any comments you can. If I can help anyway, reach out at Bill Gross Probate. As always, make today your best day ever. Thanks so much.