Estate Planning, Trust and Probate Administration: Real Estate in Probate, with Robert J. Silverman

0:03 Welcome to Probate Weekly where we get together every week with leading professionals in probate administration, litigation, estate planning. Really excited to have today Robert Silverman, attorney here in California to talk about kind of a broader picture of where probate in particular intersects with real estate. We in fact we met through a real estate agent who kind of put us together on a transaction. Robert, thank you for joining us today.

0:25 Thank you for having me. So talk to me how often as a probate attorney, how often are you involved with real estate transactions in the sense that you may not do all the work, but that they are central parts of the probate that you're working on or the estate plan that you work on

0:39 Very frequently. I'd say it's more probable than not that I'm handling a probate that there is some real estate involved and a reasonable amount of time, excuse me, the real estate needs to be sold during the probate administration. My background is in real estate, so it's right up my alley. I've been a broker for since the dinosaurs roamed the earth and so I'm quite familiar with real estate transactions, C forms and so I do get involved in screening contracts, listing agreements, purchase and sale contracts, making sure that everything is in order and that's going to please the court. Whether it be a need for court confirmation or not.

1:34 So, let's talk about that. Even let's talk about first cases that don't need court confirmation. What I would call the routine probate administration cases and a customer has a property and they want to sell it and they may say, "Hey, I have a Realtor® and I have an idea what I'm going to do with that." Do you make referrals? Do you allow them to kind of vet their own people? Do you want to vet the agent before they get the listing agreement signed? Where what role do you play in that process before the listing starts?

2:01 Yeah, any or all of the above. I let the client take the lead. Some clients are you know close to one or several Realtor® and u they have no need or desire for a referral. But I work with lots and lots of Realtor® in a lot of different Oops.

2:36 Okay. Reasons. I Oh, I we lost you there for a bit. Okay. So, I'm not sure what to do here. May I just make a note to go back. Let me start from the beginning again. So, let's talk about the standard case where there's a probate and a there's real estate involved. And I think what you said was that, you know, you allow the customer to kind take the lead and vet it. So imagine a customer says to, "Well, I have a real estate agent. I want to sell the house." Do you expect to see the listing agreement before it's ex executed? Do you get it after the fact and double check it? Do you not bother with it if you know the real estate agent seems to be legitimate? Let them handle that. What role do you play in that process? I'm somewhat flexible, although I do greatly prefer and tell clients that I greatly prefer to look at the listing agreement before. There are a few you know, typically they use standard forms and there's not a lot to object to, but a couple of things in particular I look at. One is our my client s going to be signing it or asked to be signing it in a representative capacity as the administrator or executive of the estate as opposed to individually.

4:13 That's important. There's no reason for a client to take on potential liability individually when they're acting in a in a representative capacity. So, that's a an easy flag and a relatively common flag that I have to wave to say, "Look, we need to change this." the other is the listing term. Oftent times, Realtors® want a longer term. They want to do more marketing. They're going to be invested in it. I understand from the real estate agent standpoint why they would want a longer listing period of time. When I say longer, I'm talking about, you know, 6 months or nine months or a year. Whereas all the standard forms and the courts really frown upon or just reject more than 90-day term. So, it can always be extended.

5:14 Yeah. I think as a real estate agent, I've seen I've had customers come me and not be happy with the real estate agent and the listing would say six months. I'd say technically it's invalid. And I mean I'm not an attorney giving the legal advice. I'm giving them here's the code and here's what this says and here's what my broker tells me we're allowed to advise you and based on not being valid you can walk away from it. And I think of course there's always issues with that. But very a common mistake agents make if their default six months is on appropriate you have to limit to nine month to 90 days. So okay so a real estate agent. So here's a question that we often ask as Realtors®. So do I send it to you beforehand? Let the customer do that. To me, I feel like I should just default. I know who you are. Send you a copy. You can delete the email. I'm not going to be offended. But at least I sent it to you. You have the chance to look at it or the chance to reply back and say, "What the hell are you doing? You know, this really isn't a probate, it's a this." or would you rather not get the instruction because it's just causing you more work than you would be bothered with up front? What's the best practice for an agent?

6:17 Are you talking about the listing agreement or the purchase and sale contract? Let's talk the listing agreement first. In the very beginning process, I and for me, I feel like I always want to send it and use as an excuse to start the relationship with the attorney, like what do we talk about? Well, you want me to call you and say hi and tell you my life story. But if I'm meeting with a client of yours and I got that far, that might prompt a conversation. Hey, who are you? What do you do? And as a Realtor®, if I give you the listing agreement before it's signed, at least you have the chance to look at it and if I made a mistake, catch it. If not, feel good about me, I guess, at that point.

6:47 Yeah, it's always better to do it in advance. I mean, it's a little bit em it can be a little bit embarrassing for the real estate agent to move forward, prepare and, have the client sign the listing agreement and then have and then I say, gee, this, that, or the other thing should be changed and then the agent has to sort of backtrack and change it instead of doing it in advance. So, it's not good for the agent and the client may or may not kind of feel awkward about it as well. So, it's a great idea. I tell my clients, "Please ask your agent to send me the listing agreement in advance before it gets signed." they don't always follow my instructions. Funny how that works. We give as real estate agents and attorneys and other professionals give advice to their clients, but they don't always follow it. And so,

7:41 No, customers don't do everything you tell them to do. Right. If the if the agent is proactive and also wants to build relationships and trust, good idea to send it in advance, even if the client doesn't bring it up.

7:58 Now, probate is an area where there's often there's more likely to have title issues in any of the part of real estate. Meaning, 99% of real estate listings, you pull the public record and it has the deed on there and the last deed on there's the right name and you can feel pretty comfortable. 99% of the time a probate is more common that yes there's so and so there but who died who died first who was a parent of who? Who was a child of who? Who's related to who? And while it might look like the last deed but there might be two or three other parties there might be objectors. The attorney's aware of some objector there was a ex-wife out in the world somewhere. So for me as a Realtor® the best case is to pull a actually get a preliminary titana report. Most how companies won't do that if you don't have a listed. I've worked some relationships that allow me to do that, but I know there's some attorneys who do the same thing. So, let's talk about that a little bit. Do you get full title reports? Do you get profile packages from attorneys? Do you have Realtors® get that for you? How do you check the title to make sure you know, you know, where you are, at least as far as the documents?

8:59 Yeah, we have databases or a database that's pretty comprehensive. So, we can do some research on our own. We also have relationships with title companies and we typically get a profile and then shortly thereafter as soon as practical we absolutely want to look at a preliminary title report so that we have a much better understanding about what the chain of title looks like.

9:26 Yeah. And I would say as a Realtor® if I already have a prelim and you have not yet attached that with a listing agreement so the attorney who wants to can look at it and or a copy of it to refer to it later. But I think it's just kind of the best practice.

9:38 So assuming that the listing is done correctly, and that's I know mine are done correctly, but not all are. So at some point in time, the property is listed for sale. And then you want to go into escrow. So let's talk a little bit about that process. Often times I find in probate, we have the remaining heir who is controlling the property somehow. Maybe they're three siblings and one took care of the parent and in their mind they're entitled to live there forever or they don't their child or not, but they want to and can't afford really to move somewhere else unless they change your life. And I think the thing that I've come to realize is these people act like they're trapped animals because they kind of are, right? If you spent your whole life living at home, you never really had a job, never paid rent, even if somebody gives you $500,000 proceeds from a probate, it only lasts so long. And so is it just here in LA or it might book a business? I see this even nationally regularly. Is this becoming more of a problem where there are people who just can't move out of mom and dad's house and then they're willing to kind of tap the whole probate process as a way to stay in the house for free basically?

10:48 Yeah, that's a great question. It's a we run into this fairly often and there are a lot of different ways to resolve it. Ultimately unfortunately we have to evict the person you know in some circumstances that's usually of course the last resort but you know again I have enough background in real estate that I think I have some tools to some strategies to employ to discuss it with the client and the client's sibling who's being who lives in the property and find ways to help get them out. Sometimes it's there's a often there is an estate is illquid. There's no cash or very little cash and you got the real estate. So and the person who's occupying the property u may not have resources to move. So sometimes of course real estate agents and their firms have programs to advance some funds. So we do I'm not sure in other states because we're I'm in California here, but in California we often or sometimes avail ourselves of the cash for keys strategy where we entice the occupant to move out based on getting them some cash and condition the cash upon them moving out. And so there's an easy way and a hard way. The easy way is, you know, take this cash, you know, use the resources, go and move out. You're going to have to move out eventually anyway. And, the hard way is if you don't cooperate, we're just not going to have any choice, but we need to, you know, hire an eviction attorney and get you evicted.

12:41 I found one strategies we use is where there's a beneficiary the rather than evict eviction the threat really is partition because at the end of the probate if the property's distributed if we can't if we can't sell it then all we can do is distribute the property equally and now you living in the house you're going to have no more income coming in but we're going to sue for partition of the property and if you lose in California law you can be liable for all the costs and all the attorneys fees and all the holdover costs and all the firm market rent that you didn't pay and that's going to come out of your you know beneficial interest in the estate at some point and that has been a faster path to solution than eviction which at least I'm in LA it's like we just can't evict anymore. I mean literally I had a case with me yesterday a duplex in Hermosa Beach two duplex so two tenants and Hermosa Beach has an ordinance that you cannot evict other than for cause. In fact my tenant my tenant landlord rights guy his most active business now is checking criminal records of tenants because if there's something going on there you can evict for cause for drugs that becomes then a possible solution. So this is an area that's becoming much more challenging. I don't know if you see that. I kind of work in the lower income I think more than many do, but it's increasing in the it's just becoming more of a problem. I just feel like that's a title wave that's just coming into our real estate market overall.

14:12 So, that is a very interesting point. And are you sure you're not an attorney, Bill? No, this is all I do, though. All I do is real is probate and real estate all day long. So, I've got I you know, I try to say attorneys with respect. I don't know the law. I don't feel pleadings, but I know my niche pretty well and I'm here to help. But I've done a bunch of them. So, that's the key thing.

14:32 No, I'm impressed because I mean the on the one hand, the caliber of real estate agents in my experience has gone up dramatically in the last several decades. I mean, I got my license I'm just going to be revealing how old I am here, but by indirectly, but I got my real estate license decades ago and my broker's license a couple of years later.

14:58 And you know, over the decades since I've been l since I got my license, I've just seen you know, an overall big increase in the expertise and the sophistication of real estate agents. Having said that, partition is a legal doctrine that quite a few agents really aren't familiar with, and it's an excellent one. And I've run into it over my career outside of probate. A co-owner comes to me and says, you know, I've owned this property with my brother or my friend or whoever, and for quite a while, I want to sell. He doesn't want to my co-owner doesn't want to sell, so we're not we can't put it on the market. I've offered to buy him out at what I think is a fair price. He doesn't want to do that. I'm stuck, right? I said, "No, you're not stuck. There's this wonderful doctrine in California and probably in virtually all states that allows a co-owner to go in and into the court and force the sale of a property in more than 95% of the circumstances. U and so that so it is a good tool in probate. The benefit of doing that is as you say, Bill, instead of having an eviction and problems, we just close the probate and we distribute instead of distributing sale proceeds after a sale of the property that takes place during the probate. We actually distribute the property itself and fractional interest in the property to a third 30, you know, 33 and a third percent to each of the three you know kids who are who are inheriting for example. And then let them deal with it by agreement or by filing partition action after the fact.

16:56 In some respects, I mean, it's e it's easier and cleaner and better, but it also just kicks the can down the road. So, you have to sort of weigh the pros and cons of just taking care of it within the probate before the probate closes or, you know, letting it be an option by distributing the property. Itself. That's actually a very there is an alternative there.

17:24 I think that's going to be continuing growing and frequency in that we both have more militant tenants/occupants often with the beneficiaries. But once they're a beneficiary and they co-own the property, they lose all the tenants rights and they lose all the eviction protections. They're now just an owner of the property and in fact all the costs go against them at the end if you're if you're victorious and so I think that becomes a tool that you know some be careful what they ask for and I we've been using that successfully where we said look we can sell with you without you and I'm the Realtor® I don't really care one way we're going to sell it I'd like to sell with you we get a higher price I like to avoid the legal and I get paid now rather than you know nine months from now or a year from now but you know you're going to lose and you're going to lose big. You're going to pay your attorney, defend yourself, and the other guy's attorney. That's why I think partition should be a growing area that I think there are a lot of real estate agents that don't understand it to then bring it as a possibility to an attorney. Meaning, I don't think there's too many Realtors® who should advise their clients to seek partition. I think what they should do is say, "Hey, you might want to run this by an attorney or I have an attorney. I run it by him kind of prepackage it and say, "Hey, I talked to attorney Robert Silverman. He kind of agrees that you might have a case here for a petition. Maybe you should do a consult with him as a solution to this.

18:45 And so I think this is an area as Realtors® that we should be more involved with. And I think, you know, I saw a statistic on how much property I want to say I saw a stat that nationwide there are like over a million homes that are vacant over various disputes. And I and that number is just increasing with evictions and things like that, but vacant, not so I guess it's not evictions, but other legal matters. And there's a case where we can move the inventory more quickly if we're aware of it. So every Realtor® that calls, let's pay attention, take a look at partitions and learn about that a little bit as a tool. So, okay. So, now we get into the contract and we have offers and such. You know, what's the best practice? Some properties you get one offer at a time. Some you get five or 10 right away. My practice is to create a spreadsheet with all the offers that come in, give access to the interested parties so they can access it when they want to so they can kind of see the scoreboard if they want the individual properties and then at some point before we accept it I make a recommendation to my client say hey here's who I recommend either accept this one or counter or counter these whatever where do you want to get involved in that process as

19:52 Good question let's go back just for a second I just wanted to was thinking about the partition thing just a note for those in California there was a reform in reform legislation in the area of partition in California about five to seven years ago and we don't need to go into the details here but the partition became a little bit more accessible some more rules that are well suited to sort of family situation co ownership situations including probate. I just want to mention that it's an even better and more accessible solution based on the fairly recent reform of partition law here.

20:42 Yeah. So fast forward to the contract. You know, I'm a big believer in collaborating and you know lending my expertise and giving feedback, but on the other hand, I like to stay in my lane. I don't expect that the real estate agents are going to give clients legal advice and I typically don't really get involved in the nitty-gritty in terms of spreadsheets and which of multiple offers to accept or not. That's the Realtors® know the marketplace better than I do. And they know how to best manage a transaction and coordinate and advise the client. So I generally stay out of that and I let you Bill as the Realtor® whatever Realtor® I'm working with advise the client and figure out what offer is best. Now there you know it probate there can be some reasons to expedite as opposed to other situations where there it might not be as big a need to expedite. You know there are other circumstances that might be need to be factored in with a probate but in general you know how to do that better than I do it because you do it all the time. You do it on a daily or a weekly basis and so I kind of stay out of that. Do you want to see the you know I recommend to the client to sign maybe signed offer accepting or a counter offer. Do you want to see that before they sign that?

22:26 Absolutely. So once they're you receive the real estate agent receives the u the two, three, five offers, whatever it is, multiple offers, they're going to discuss it with the client. They're going to make recommendations about which is better. After all, there are a lot of different factors. It's not just price, right? It's, you know, inspections, it's contingencies, it's the, you know, how long it's going to take to close, it's the strength of the borrower. I mean, there's all sorts of factors. And so I let the my client and the and the real estate agent sort of filter, but when they've gone down to the offer that they want to accept, I want to take a look at it before it gets signed. Now, your practice is exclusively California,

23:17 Correct? And you're based in Northern California, but I think you service a number of counties. I do. I've done probates. I've done hundreds, many hundreds of probates, practicing 32 years. And I've done those probates in probably, 25 different counties from the, southern border to the northern border of California. Lots in Santa Barbara. I have one in Santa Barbara now. I have I have LA probates and San Diego fairly frequently. So even though I'm in the Bay Area, the most of the rules on probates are the same. They're state rules. There are some local rules, but we have access to those local rules. I have excellent probate parallegals. I have three of them. And so whichever probate parallegal I'm working with is going to look at the local rules. A lot of court appearances are remote these days. So you know, so it's not a big deal for me. You know, I don't have to fly down to, you know, to Los Angeles to attend a hearing for a client. So I handle probates throughout California.

24:30 Yeah. I remember I used pre-COVID used to always meet attorneys from out of California, out of Southern California who'd fly in and there's times where it's natural like somebody in San Francisco owns a property in LA or vice versa. Others, you know, for whatever reason, the C chose an attorney from the north and they'd fly in fly out and that meant the attorney is flying. It also means the customer is paying for that time and so in some way ways it saves the client money. It and I don't think any attorney really wants to fly and get paid per hour or travel time. They much rather get paid per hour for legal time. So I think the online thing my only my only wish is that attorneys would be put as much energy into their online technology and skills as they did traveling because if you're not going to travel and you're going to use online you know not you but there are some who don't have a proper camera don't have proper audio and every court has its own technology whether it be Microsoft Teams or Zoom and I feel like if you know I know I work with multiple counties I've learned to be proficient at all of them and I see some attorneys where my technology is not working today. That's not really acceptable today. That's like saying, you know, my car didn't start. You know, get an Uber, get a taxi. Like, that's not Nobody accepts that at a court appearance. So, I you're right about the court appearances. I feel like we need to raise our standards and overall. So, but talking towards that, I'm a real estate agent, but I love to learn about the process and I really try to where I can zoom in or whatever the remote process is where I can to watch to be there in case a question comes up on a case I'm involved with to be available to be support. Is that do you see real estate agents do that?

26:06 Is that a common practice? Is an uncommon practice? Are you uncomfortable with that? Would you rather me not be there with your on your case or are you don't carry the way or where are you on that?

26:16 In terms of appearing at hearings and so forth. Yeah. Yeah. I know we say appearing I mean I'm not saying to check in with the judge and say I'm here though often times they require that. I just mean I just want to watch and see what's happening and be available in case you in case something comes up.

26:29 Yeah, that it's an interesting thought. The it doesn't come up that often here in my practice. Hasn't come up. Once in a blue moon the you know an agent will want to do that. Of course, they need to be there in cases of where court confirmation is required, but most of the probates I handle have what's called full independent administration. Meaning that the client the executive, the administrator has full authority without going into court for getting the judge to confirm the sale and with bidding and different offers and so forth. That doesn't have to happen in the vast majority. But I can't think of a case where a real estate agent has asked to appear. That's it's an interesting thought. Some you know sometimes the CL I mean often the clients ask and I tell them the vast majority they don't really want to appear. I'd say hey if you really want to appear but it's not going to be that exciting and there's no requirement for you to appear. I'll do all the appearances on your behalf. Well, I think as a real estate I would recommend every real estate agent to listen in on hearings on your cases. It's so educational. You see how the attorneys work. You see different attorneys. They all have a little different style and approach. You'll see the attorneys that you've worked with previously as a way to say, "Hey, I saw you recently online as a kind of a opener." But I think I always learn something how the judges react. I think the most surprising thing for me, you know, you're an attorney, so maybe you were trained this way, but for me, is that the judge has such discretion, like they can pretty much do what they want. I'm not saying they break the law, but I'm saying that law is like a pretzel by the time some of these judges are done with some of these rulings. It's just interesting to me how they can kind of work things when they want to, and if they don't want to, they can be hard. So, but I would recommend all agents to go online.

28:20 So, one thing before we finish up on the full authority is and you know, as an attorney, you do your job properly and everything goes according to Hoyle and you have a full authority, which means you have a sale and maybe you have to do a notice of proposed action expires and you go forward towards closing. As a real estate agent, on the form we put may not be required. There's no there's court confirmation is required if it's a limited authority. We know it's required for whatever reasons and there's a may not be required. There is no not required. Why is that? Because sometimes the we don't think it's going to be required is required because somebody raised their hand and there's various reasons but one is they if somebody objects to the contract during the notice of proposed action. So talk a little bit about notice proposed action. As a Realtor® sometimes I'm aware of the other beneficiary who may object and I'm advising the attorney. Hey, let's get this thing through as fast as we can because I have a feeling they're asleep. Legally, you have to serve them. Legally, they have 15 days, but let's not give them 16 or 17 days. Let's give them whatever the law requires. Let's give them that and not anymore. And sometimes I feel like attorneys dillydally around and they give that objector a little extra time. Next thing you know, you have gum in the work. So, talk a little bit about why it's may not required as opposed to not required even on full authority.

29:41 Yeah, that's you know getting into the weeds a little bit, but it's really important. I guess first I'll say that I encourage real estate agents to use a appropriate probate addendum. There's C forms that are specialized and they benefit everyone. They benefit the client, they benefit the agent and the and the brokerage firm to reduce potential liability. So the notice of proposed action is one of those forms that perhaps a lot of agents don't really know about, but it is important. So if there's full administration, you're right, it's not that it's that a court confirmation is definitively not required. It may be required because there needs to be a notice of proposed action. So contract is signed right then and there or very shortly thereafter the attorney probate attorney should prepare and send out a notice of pro proposed action to all people who are entitled to that. That's the that's the heirs certainly the beneficiaries of the estate. Why? Because you don't want them complaining after the property has already been sold and complaining andor filing suit. So they have 15 days from the receipt of this notice of proposed action to object to the sale. It rarely happens, but when it does, it's nasty.

31:12 And then what do you do? Well, first of all, the buyer the buyer is aware because the contract included probate addendum court confirmation may be required. So you haven't upset the apple cart and caused a potential problem with the buyer so they know. And you go into court and figure out what the objector's objection is. Frankly, my experience is a lot of times that is the objection is irrational. Judges can spell that out usually very quickly and they will dismiss it and they will go ahead and order the sale to proceed. But once in a while there is a valid objection and the court doesn't want a property sold when any of the beneficiaries object to the terms. So the notice of proposed action has the key terms of the proposed sale and the and the accepted contract. But it is being flagged in case there are any objections before the thing closes escrow as opposed to creating a nightmare having it close and then having litigation afterward. So, the classic case I had a classic case of this where we had an objector and we were selling a property for I think it was like couple $2 million or something and the objector had done an appraisal was worth, you know, twice that they thought on paper. The appraisal had a serious defect in it that I spoke to the appraiser about and they which was the lease had a undermarket lease for a long term and so at that income value cut the value of the property in about half. So I'll just never forget when the judge you know called the case and the objector stood up and said selling it too cheap. Now it was a court confirmation sale. We had we got we had publicized this the property for listing. We had given them the time to make their offers. They had plenty of time to put an offer together. So the judge said, "Okay, so you say it's worth $4 million. Do you want to offer 2.1 million an over bid? No. Well, sorry.

33:16 Yeah. So, like you're right. I do think 90% of the time the objections are completely irrational and you want to flush out what the you know the basis is ahead of time because you know if you now it might be did something wrong. It might be that your client did something wrong but as long as your client and you follow the procedure you know you don't have anything to concern yourself with. And at least my experience is 9% of the time the judge just at the bench, you know, declines the objection and moves forward or handles the objection and moves forward with it. Occasionally have a problem and then now they want to schedule hearings. You have to go through all that process. So let's talk about go back to a little bit now to talk about the court confirmation process. And you mentioned something that because you said it matterof factly because I think you have the right high standards expectation of Realtors® which is for a court confirmation sale the Realtor® should be in court. Now maybe during COVID maybe you could do it online and find some way around all that but today there's no excuse not to be there. Yet I find less than a quarter of the of the real estate agents or attorneys show up for court confirmation hearings where theoretically somebody can show up with a check and be there to overbid. So talk about the requirements on a court confirmation. You're the attorney. Do you have the Realtor® go instead of you? Do you have the at the Realtor® go with you? Do you go instead of the Realtor® not needed?

34:36 What's the best practice to be there in case and of course you hope somebody shows up to pay more for the property which puts more money in your client's pocket?

34:45 Yeah, I always go. I mean there's just in my view there's no excuse not for an attorney not to go and the real for the reasons you stated, Bill, it's important for the agent to go. You know, like you say, the it's in the best interest of the estate if there are over bids, and you never know, you can't know in advance, whether or not somebody's going to trot into court and over bid. And so, you know, the Realtor®, the listing agent should be there and, be prepared, for, you know, whatever may happen. It's not a lot, you know, they have advanced notice. So I don't I don't think there's a lot of good reason not to show up.

35:35 Well, and so just for those watching those real estate agents, you know, this is an attorney saying he kind of expects you to show up for those sales. But why would you not a go to court just once to check it out and b a chance to meet the attorney? You know, we all everybody else says, you know, it's so hard to cold call. It's so hard to get in people's offices. Well, the attorney is going to be at the court that day and they're going to be waiting around a while, right? No court ever starts on time, never finishes on time. You're in the hallway having a cup of coffee for, in my experience, 90% of the time you're there. Why? And there's other attorneys, there's other investors there. Why would you not go? I don't understand that part. So, I wish I could make that a rule. And I like the way you said that in a sense you kind of expect it. On the flip side, as a Realtor®, I'm always surprised at how many attorneys don't show up for it at all. I've I represent a lot of I regularly represent over biders in court, maybe a couple times a month, and I would say maybe a court of attorneys show up in person nowadays. And theoretically, I show up with a with a cashier's check. And now, you know, they're surprised. The judge says, "Well, did you is somebody there to check it?" I'm there. I can text you a copy of it. The good news is I don't have to let the check out of my hands. And I've had attorneys ask me, "Will I wait in court for an hour while they drive in from wherever they're at?" Well, depends. You know, if I want a relationship with you, yeah, I'll wait around for an hour or we can meet somewhere. But if I don't want to, it make life difficult. And that becomes now a disadvantage for your client.

36:59 So, I think attorneys in particular, at least in California, at least in Los Angeles, you should show up. I don't know why that why that's not so okay. So, now let's say we either have a full authority, we pass through the NOPA stage, or court confirmation, courts confirmed, and now we go to closing. We close the escrow and the seller the real estate agent gets paid but who doesn't get any money yet? The seller or the estate the estate gets it but not the beneficiary. So talk a little bit about what that is what that is and what that looks like before they get paid.

37:31 Yeah, that's a distinction that is lost among a lot of folks. They think, okay, they're very encouraged at the beginning of the probate process or before the attorney is even hired when the attorney, myself, I tell them, look, you know, you've heard, you've read that probate's a long process. It can take a year or longer. And they're envisioning, gee, I have to wait to sell the property. No, I tell them as soon as you get issue, you know, the petition for probates approved and your authority which is in a for in a form that's issued by the court called letters of administration or letters testiment depending if there's a will or not. But that as soon as you are granted that at the beginning of the process, you can go ahead and sell the property. But as you point out, Bill, that doesn't mean that the sale proceeds when the escrow closes is going out to the beneficiaries. No, it's a two-step process. One is you sell the property, the sale proceeds go into an estate bank account, not in the client's bank account, not in the beneficiary's bank account, but in an estate bank account. And nobody can take that those funds. And the client is not authorized absent a court order to distribute those funds to a beneficiary, that has to wait until the probate closes. Or occasionally there's a when there's a real need and justification in the later mid to later stages of the probate. We can petition the court for a preliminary distribution of some funds if there's a need. And it's and it's compliant with California law, we can petition for a preliminary distribution. That's fairly rare. Most of the time, the beneficiaries have to wait for all of the proceeds of a real estate sale and any and all of the other probate assets to get distribution of that upon the closing of the probate when the judge signs the

39:35 Final order on the final petition. So, there's a couple things that brings up obviously. First, you mentioned the word bank account, and you know, I always recommend a bank that specializes in fiduciary accounts because they're familiar. They understand the process. I've never had a customer tell me they walked into a branch at Bank of America and were happy with the service they got. It just seems like it's a problem. And so, how do you handle do you handle the open the bank account on behalf of your estates or do you have customers do that? Is there a particular bank that you want to promote or recommend here online?

40:11 I typically let the clients do that because oftentimes they have a local bank or a regional bank and that's where they do their banking and they have they have some relationships there. So we don't get usually put kind of prescribe or recommend particular banks unless we're asked about it. But we make sure to work with the CPA who's going who's preparing the tax returns for the estate and at the very beginning get a tax ID number which is real important because a lot of times you know or sometimes people might be inclined clients might be inclined to go down and try to open an estate bank account and one of the first things they're going to ask is hey first we want to see a copy of the letters of administration or letters testimentry and second what's the tax ID number and the client says Oh gee, I don't know. Maybe it should be my social security number. No time.

41:03 No. And there should be a separate tax ID number. Sometimes probate attorneys obtain that from the IRS. We don't because we want things tax related things to start and finish with the CPA. That just depends on the attorney. But it but it's important to get an estate tax ID number distinguished from distinct from any social security number of the client or any of the beneficiaries. And then establish a bank account. And it's usually pretty straightforward for the client to do that. We if a client is has difficulty then we'll help them go down I'll have one of my parallegals go down to the bank with them or whatever if they need help to do that. It seems to me the Wells Fargo and Bank America still ask for a cert a wet certified copy of the letters versus there's other banks I work with that will just take a an online version because you can verify online. I was I always say to them I could more easily forge a wet signature certification than an online one you could check whether it's legitimate or not. Why would you consider that being a limiting factor? But you know frog and bank I think love punishing small users and really don't want those that have business. So, and then you mentioned also in passing I think an important part which is the accountant who's going to file the tax returns but is the accountant the one who does the financialist for the you know final reporting as well and is there a particular account that you work with or do you have the customer find them on their own?

42:34 Often times the we use the CPA who was preparing and filing tax returns for the decedent prior to death because that just makes sense. They have the background. They have a lot of information. They have information about income tax basis of assets and so forth. So that's easy as long as they're competent and they're willing to do and they have some experience doing fiduciary accounting which is which is tax return preparation and filing for periods of time post death. That's different than a 540 and 1040 which is your routine state and federal in California anyway state and federal tax returns. This is fiduciary returns are report income and expenses that for periods of time post death for which a social security number shouldn't be used any longer but so we will sometimes we say look we have a number of CPAs we use and we like who are very experienced and if your CPA is not willing and able to do it or doesn't have much experience with handling probate and fiduciary tax returns then we recommend that you go with you know talk to these folks.

43:52 Yeah. And at the end of the day if the paperwork's not filed then the customers not get the distribution. So the accounting of the estate is critical. The filing tax return becomes a critical process. The bank account the EIN number to open the bank account becomes critical. All these things are going to expedite or delay the customer getting their money at the end of the day. So, you mentioned another word that I think is important in my business growing, which is fiduciary. More and more, maybe I'm kind of growing up the food chain of probate business, but larger estates larger probate cases and larger trust administrations often have somebody passes and rather than the heir step into the role, they're named in the will as the administrator, whatever, they're not capable of doing all the work involved. If there's a business or portfolio of property for example and they'll hire somebody to do the work for them as a fiduciary that their job is strictly to represent the estate and they're not the attorney though they can be an attorney they're not the accountant though they can be an accountant the Realtor® though they can be a Realtor® as well but they're really they're kind of replacing the role actively of that person so talk a little bit about working with producers I would think for you that would be you know better business. I would think that'd be business we're doing with a professional in some regards that it's you're more able to kind of flex your legal muscles and less time maybe having to explain things over and over but also more complicated cases I would think. Yes, the role of a private professional fiduciary, I should say licensed private professional fiduciary in California is really a wonderful opportunity and fiduciaries can be take the role of assisting the family member who happens to be the executive, the administrator of the estate u or they can be the direct

45:57 Representative. So I have two different probates, one in Santa Barbara and one in Sacramento right now. Each of which I represent my client who is the administrator of the estate is a private licensed private fiduciary. To go back for a second. Many people don't know that at least from California there is a licensing scheme a set of statutes that allow experienced u professionals who have certain educa meet certain educational requirements to be certified as a licensed private professional fiduciary. They are by statute insured bonded and have a certain level of experience. So we sort of raised the bar. 20 years ago, 30 years ago, you could just hang a shingle out and call yourself a licensed fiduciary. You didn't have to have any experience or credentials. And now we've elevated that into a licensed profession. They're often very good and so they can play an important role in the probate process or trust administration and a lot of other roles either indirectly or directly as a client.

47:16 So I'll give you a little additional detail on that I've learned which is in California I think is the only state at least was as at some point in time that has such a license position. No other state requires it. So good for Cal. Normally California is like doing the wrong stuff in my opinion on so many areas but with crazy laws. This is a good one. I think that we created this role and we've created this industry that I think fits a need. There are people who need somebody in that role and rather than just hiring an attorney, having that industry kind of creates a different aura. But you're only required to have a license if you're doing more than one at a time. And so I got called by an attorney once who said, you know, asked if I would do it. I said, "Well, I'm not licensed." I said, "I know, but it's just one piece of real estate." and I know you can handle what it is." And I did it and I would say it was fun. I learned a lot. But ever since I've now made a made a list of my own food stores to send business to because, you know, it's just not what I normally do. I'm a salesperson. I'm a you know, I'm not really that administrator and they have a tough job. It's an interesting position. I think it's one of the few where there's not enough people. And the business there is growing and so anybody who's interested in that I would recommend take a look at becoming a a licensed professional fiduciary particularly in California I think it's a great opportunity well Robert we've covered a whole wide range here on estate on the probate what we didn't get to is avoiding probate which is you know all we talked about were once the cows get out of the barn how we wrestle them back in but obviously the best way to avoid all this and just kind of last few minutes would be to have a proper plan so that there's something in place so when somebody does pass we can avoid a lot of the costs and expense and stress of estate planning.

48:59 So let's just talk about is there one or two issues you know I think that anybody in California who owns property should have an estate plan most commonly with a trust anybody with kids should have an estate plan to name guardians for their prospective children yet getting people to do that it just seems to be a problem. You do estate planning. What do you do to help people go from being interested to motivated to actually fulfilling their estate plan?

49:26 Yeah, that's a great question and it's also really key because you know you know an ounce of prevention is worth a pound of cure, right? I mean if you know we serve people and I have a very vibrant probate practice but we also have an extremely vibrant and robust estate planning practice and certainly you know there's no shortage of people who don't plan and end up going into the default which is probate. But not enough people are aware of the fact that if you establish a revocable living trust and you fund it properly, that means you transfer substantially all of your assets into it. And in the grand scheme of things, it's an investment. Attorneys who do it like myself. It's not it's not, you know, an inexpensive proposition, but in the grand scheme of things, it's way less costly than having your estate be subject to probate because probate has incur you incur statutory fees typically, not hourly fees, and it's based on the gross value. Many of many real estate agents and other professionals are aware, but it's statutory fees and they go up pretty substantially for a relatively modest estate. Call it a million dollars of gross assets in California. That fee is $23,000 to the attorney and the executive is entitled to exactly the same fee. So you have a million you have one property that's a million dollar gross value and in many states that's a that's an incredible property in California that's a relative I mean that's a fairly routine value in California. You've got $46,000 in fees and a few thousand in cost. You're talking about $50,000 in fees and costs.

51:24 I guarantee you can do good estate planning including a living trust for a small fraction of that. So when people are educated you know they get that and they feel like it's going to be a gift to their loved ones even if it doesn't necessarily give them a lot of direct help. They know that the legac the legacy they're leaving is going to include having a smooth private rather than public process where the cost and the inconvenience are going to be a fraction doing trust administration than u than doing a probate.

52:02 Well you know Robert I look forward to invite I'm going to invite you to join my Estate Planning Podcast where we get strictly estate planning. I know you cover estate planning as well as probate. This is Probate Weekly and I know you're an expert in that subject. So, I really appreciate your time today. If somebody's interested in learning more about working with you either for probate or estate plan, what's the best way to get in touch with you?

52:22 I think we have the screen below. My website silvermanjaffe.com. Oh, actually, you know what? I should have caught this. I'm sorry. This has this is my old website w down below rsilvermanlaw.com. The current one is silvermanjaffe.com and or you can just email me. I think you have the correct email address. The email address is

52:53 There. My production team just up Oops, that's still there you go. No, that Yeah, let me get the stuff in front of that out of there. My production team here is on it. But

53:02 Okay, but there you go. Silvermanjaffe.com. Email is an easy way for folks to get in touch with me. Or you can look at our website. Couple of things, too. I'm happy to send out or have my staff do so if you send me an email. There's three things. One is I have a real estate titling brochure that I think can be very helpful for real estate agents and anyone. Which talks about the pros and cons of various methods of holding title to property in California. Number two, I have an estate planning primer. Hey, what's estate planning about? Not only trust but powers of attorney, healthcare directives, what's that all about? And then third, I have a monthly email newsletter that I send. I write a topical article about real estate planning, probate, every month. Send it out. If you want to get on my, email list, doesn't cost anything. Any of those things, I like to provide resources. So, please just go ahead and shoot me an email and request any of those things and we'll take care of it. And real estate agents. I think getting on these newsletters and his website is a great source for additional content. Realtors® always say, "What content do I post to my clients about probate and estate planning?" And I would say, "Well, here's a couple great opportunities that aren't going to cost you anything." So, Robert, thank you so much for time today. I know I learned quite a bit. Hope everybody else here did as well. And thank you for your time and look forward to talking again soon.

54:27 Likewise. Thanks for having me. And for this is Probate Weekly. We get together every week and talk about probate administration, litigation, estate planning, avoiding probate with leading professionals. You can go to probateweekly.com if you want to sign up and get notifications. You don't have to put your phone number in but you can put your email address and we'll send an email reminder. Then down below you can subscribe to the verse audio formats as well as you can see the past episodes on YouTube. You can continue the conversation on our Facebook group. Probate Weekly is the Facebook group and love to have questions there. If you have referrals, you're looking for an attorney or a Realtor® in other states or have questions in other states, love to have you participate there. I'm Bill Gross. This is a weekly program. If you like this, please put like, questions, comments, subscribe if you like more of this. As always, make today your best day ever. Thanks so much.