Understanding the Probate Process, with Attorney Beti Bergman of Peninsula Law

0:02 Welcome to Probate Weekly. We get together every week and interview leaders in the probate industry, often attorneys, but also real estate agents, investors, key vendors. Really lucky to have today Beti Bergman, who is an expert probate attorney I've come across and been on some deals with and interviewed previously. She's a previous guest located in the Peninsula, South Bay area of Southern California. And we want to talk about kind of the basic probate process and what problems seem to get people tripped up along the way. So Beti, to me, typically probate is kind of like we didn't plan properly or something happened, the cows got out of the barn and we need attorney to help us get the cows back in the barn. Is that a fair way to look at it? That's one way to look at that. That's for sure. And so probate is a is a court process that families kind of have to go through to essentially ultimately transfer someone's assets to their beneficiaries or heirs and you find yourself in the probate court doing this if you didn't plan at all, meaning you didn't put any sort of estate plan together and you're dying in testate or if the only thing you put together was a will. Now sometimes people think if you put together a will that you don't go through probate. That is incorrect. If you have a will or nothing, you are going through the probate process.

1:21 Again, that's a court process to really the goal of that is to transfer your assets to your heirs or beneficiaries. So again, I think it's an important point that still I've been doing this podcast for 5 years. Is the number one misconception people think that they have and it might be true in other states, right? There are states where a will avoid a probate. I know there are some states but or the deeding might avoid probate but in California whether you have a will or not a will does not get you out of probate. A will is and the way I try to remember it is a will is probated in the probate court. Right? Okay. So the number one mistake people make is not having even a will. Right? It's one thing to avoid probate with an estate plan, but even you have that even a will at least will help determine or influence how things are divided. Correct. So will is better than nothing. It just doesn't avoid probate. That's correct. So, we'll at least get your wishes in writing and you the your heirs of beneficiaries, whoever's going to step up as your executive, personal representative, administrator of the estate. These are all different terms for who's going to be administering and distributing your estate. But the will that person who's in charge is going to have to abide by the will. So at least you have your wishes about whom you want to give your things to written out. So will is at least that and it's better than nothing. Otherwise, Uncle Sam has that plan for you and it's going to go through intestate laws.

2:59 Well, I would say it's worse than that. Uncle Sam's a little nicer, but Uncle Gavin Newsom in California. I tell people that if you don't have a plan, the state of California has one for you. And it's like the DMV. It's just not as customer serviceoriented as a DMV is. Oh, right. So just real quick terms since you mentioned them. So an executor is one where there is a will and they're named to execute the terms of the will. Correct. That is correct. So executor is Yeah. If there's a will in place, that's what you call the person who's in charge. And administrator be if there is no will or the will isn't in effect or will is somehow invalid. The court appoints an administrator. Since there is no executive, the court appoints an administrator to administer the estate. That is correct. Okay. One of the common misconceptions I have as a real estate that I see as a real estate agent is the idea that the only person who can file the probate would be the next logical heir, whether it be a spouse or the oldest child. But the reality is in California, we have a unique law where almost anybody can file a probate in a state. There's a priority as to who gets approved as the administrator. Talk a little bit about cases where it's not maybe the one heir or the one of the three children but somebody the outside might want to file a probate.

4:16 Yeah. So you have there's a priority of appointment who gets to be the administrator or if someone is not named in a will to be an executive. So there is yeah so there's that priority appointment that's written in the probate court of who could get appointed and it really goes down to spouse children next to kin and there's a whole long laundry list of who can get appointed down to a public administrator if there's no one who can do this but who can petition it's usually the person who is going to be appointed will petition that's who's going to petition cuz they have the interest in getting this done or if they're a beneficiary or something like that, they're interested in getting this probate underway and getting the estate distributed. Now there's rules about who can be appointed. If they're out of the country, then you can't you can't get appointed unless you're Yeah. And so Oh, here's something I wanted to say. Yeah. Okay. So, if you're out of the country, you're non-citizen. You're out of the country. So then you may not be able to get appointed. If there's someone who has priority of appointment and nominate someone then the person that they nominate get the same priority as the person nominating them. So that's something.

5:40 So for example just understand a real world case I've worked recently. The heirs were in this case children lived in Mexico didn't speak any English at all. You know, they you know, would have had tough time administering the state even if they were appointed. They couldn't be appointed because they were residents of another foreign country, but they hired the attorney and the attorney in turn hired a professional fiduciary that they nominated to act as their administrator. And so, in essence, they had the priority of being the heirs. They said, "Well, you know, we're in charge and we appoint so- and so." And so to use your words, that person has the same priority as the heir does, the nominated professional. That is correct. So that's a perfect example of where that would come into play. And so then the professional fiduciary can get appointed. Yeah, and as a real estate agent, that's a great one to work with because the professional fiduciary is professional. I mean, it doesn't mean they're perfect. It means that at least there's some semblance of business in their life versus so often. One of the challenges, one of the challenges I face, and maybe you can speak this a little bit, is that the heirs often don't have the business acumen. They don't understand that when you're inheriting a million or $2 million estate, it's like running a million or $2 million business for about a year or two. You wouldn't hire just anybody, you know, in a company to run the business. You would need a professional or somebody who is experienced. So talk a little bit about maybe heirs who struggle with filling those shoes and then how do you help them get the right help to do it for them? Yeah, that yeah that's great that you bring that up because also for heirs and beneficiaries or family members it's emotional to them too and sometimes there is a let's say if nobody's named and someone has to figure out which of the siblings which of the children are going to be appointed as administrator when they all have the same priority of appointment and there may be a disagreement and you know there's what happens in probate is a lot of

7:42 Childhood good emotions come into play. Siblings may not get along. That's all unfortunately kind of the norm and the exception is that when they do get along. So a private professional fiduciary is sometimes a really great answer because they're a neutral person. So they're going to get in Exactly. Run it like a business. You know, they know what to do because this is what they do as a profession. And they could come in and get this administered and get it distributed without the emotions involved. And yeah, and they'll be they'll be neutral about it instead of the children fighting amongst themselves about who gets to administer this. And then a lot of times what happens is there may be distrust if they if the siblings don't get along they think like hey this person's I don't know skimming off the top or giving themselves more or even though probate is a court supervised process and you should not be able to do that because you do have to get the ultimate accounting of the estate approved by the court. You do have to reveal all your transactions and what fees are going to get paid. However, unfortunately, someone who does get in charge of an estate sometimes get a little power crazy and they start using the estate for their own benefit or not according to how they're supposed to be running it. And then that it's going to come out in the wash. It's going to come out and not in the wash, not in the end because you do have to account for everything that's happening. Private professional, you know, that won't be happening because they're a professional. I mean theoretically I'm sure there's bad ones out there but yeah for the most part private professionals should get be able to get the job done without that kind of emotions and a professional is being appointed to be the administrator. They're not representing one of the heirs. They're really working on behalf of the entire estate. So they have a fiduciary responsibility to all the heirs rather than you know if the heir if you one of the heirs happens to be administrator

9:45 There's that temptation theoretically at least the independent fiduciary is at least obligated by law to be independent right that is correct that's correct and even if there is an heir or beneficiary who is acting as executive administrator there is that really there it's a conflict because they have to be neutral impartial but then they're also a beneficiary so they may be somewhat biased towards themselves. I'm not saying that happens all the time. It does work a lot that there's a beneficiary who is an administrator executive and it works just fine but for sure the private professional is not going to have that interest. Yeah. I think that's where people when they become administer the temptation you know for some people again if your whole life you've never had a business where you control $2 million or a million dollars you know there are you know people run businesses and they have those same temptations and they have to deal with them they have stockholders or owners or whatever and that's they deal with a regular basis but sometimes for the individual it can be a bit much one of the things one of the other challenges I find is that clients often assume that everything to do with a probate is a respons responsibility of the attorney. They don't understand there's a distinction between the role of the attorney and the role of the administrator. Things like, you know, opening bank accounts, getting bonds, signing papers in a timely manner. How do you advise the client kind of where your job ends and their job begins? You want to empower them. You want to motivate them. You also need to maybe clarify for them what they're supposed to do. What how does that process happen? Do you have a intake process or do you have a meeting to go over that or form or how do you handle that process?

11:26 Yeah. So we it all of that all you know when we meet with the client and once they get what's called letters of administration or testamentary the letters is the instrument that the court issues to give this person the power to do what they need to do as administrator or executive. And once they get that, we of course advise and counsel the client about what their duties are, what their obligations are, and what their liabilities are if they don't kind, you know, make sure they don't do things like co-mingle their own personal funds with the estate funds, things like that. But we also put all that in writing. So once those letters get issued, they get a letter that outlines, you know, what their duties, liabilities, obligations, all that. So hopefully, you know, it's clear enough. They've been told orally and in our letter that we always send out about how what they're supposed to do, what their obligations are, what their duties are and you're right. So they have their own set of job, you know, tasks and what their job is as a ex executive administrator and the lawyer has their own job and in California the statutory fees are the same. So the attorney is getting paid exactly the same as the administrator and executive. So it's a percentage of the gross value of the estate and so they're paying getting paid exactly the same. So that means they have they're really then theoretically because of that payment schedule should be doing 50% of the work that the attorneys are doing. But we are doing different things. Of course, the attorney is doing the legal work and advising the client about what the legal tasks are, what they're supposed to be doing. And the administrator does do a lot of actual tasks like collecting the mail and figuring out who the creditors are and who needs to get paid and yes, opening the account and u managing that account and things

13:29 Like that. Nice simple. I mean, I think I think the most people don't appreciate how much work's involved until they're done with it. And I like the way you said that. You know, you're you are right. The statutory maximum fees for attorneys is the exact same, at least in California, as for the administrator. Theoretically, they're getting paid the same money or half each for doing half the work. And of course the c the client can't do the legal work, doesn't draft the petitions and forms and doesn't have the filing and all those responsibilities. And so if you take all that same time and say well really almost everything but the legal work is supposed to be done by the administrator. And I know that sometimes clients don't expect that they well can't you just open the account for can't you just do this? You can do a lot of things but you need somebody to do it. Either you do it or you pay somebody to do it and they have to get paid. Right. So it seems to me that communication that there seems to be a breakdown there at least in my experience that customers go in expecting it to be a lot more done for them and at the end maybe aren't properly prepared. And it also I've done a couple as a fiduciary paid you're allowed to do one at a time without having a license in California and an attorney asked me to do one and I thought it was a great learning experience. I would recommend everybody to try it if you really want to learn this business, but it's a lot of work. Like opening a bank account is not simple. Yeah.

14:54 And then getting the like in one case we overpaid by accident like $200. Well, to get $200 in the account was hard because you don't have checks and they don't accept a on those kind of accounts with some banks and it I mean it's a lot of work. It's not it the reason you're getting paid is there's work involved in this. Yeah. Exactly. There and you know this doesn't come up as much in probates but sometimes in trust administration where you know there's a family member a child or whatever is becoming a trustee and they think okay no I'm going to wave my fees I you know I'm not going to I don't need to get paid for because trustees can get paid too and then they realize how much work it is and they think okay I think I will take some fees I'll never forget I had a family member who initially appointed me as the successor trustee on the trust because I'm in space and I do real estate and the oldest and whatever. And at some point, somebody for some reason recommended her to have one of my youngest sister to do it for whatever reason. Partially because my youngest sister is very wealthy. She married a guy who's done very own business. And I think it has something to do with it. If I had a guest, but whatever reason, she called me like all, you know, concerned I'd be upset that I wasn't going to be the trustee. I'm like, that's great. Thank you. I didn't want to do it because it is work. I just don't think people really appreciate that.

16:14 So, let's talk a little bit about trust. I think another misconception is that if you have an estate plan, I.e. If you have a trust, you avoid probate. Well, that's not quite true, is it? Because every case that's ever been litigated on a trust is held in probate court. When I look at the list, there's plenty of trusts that go through probate court. So talk a little bit about how often does that happen and what are kind of this the common causes that cause people to go into have to do with probate court in a trust administration situation. Yeah. Yeah. And of course I come across so I do a lot of probate and trust litigation. So I so I do deal with these kind of cases and so the cases the trust cases that are in court that come across my desk I may be disproportionate to what's going on out there. I may not see some trust administrations that's getting done without someone hiring an attorney like me. However, I do deal with a lot of cases where there was a trust, but yet here we are in court dealing with it. And usually that's because someone is suing someone about the trust. This could be a variety of reasons. It could be because they're actually contesting the trust and saying, "Hey, someone unduly influenced mom to put, you know, change the distributions or whatever." So, someone's actually contesting the trust or someone is suing the trustee because the trustee is not doing their job. The trustee is responsible for doing annual accountings to the beneficiaries until the trust can get distributed. A lot of times the trustee maybe fails to do that for whatever reason and then a beneficiary is filing a petition to compel an accounting compel a the distribution because this trustee is just sitting on the trust and not doing their job. Now this happens a lot because once again I don't know what it is human nature someone gets in charge they have the power and they think well I could do what I want I don't whatever. And so the when

18:17 Someone dies, usually a trust is designed to just kind of do a lot of the same things the probate u process encompasses. Paying off creditors, pay doing the last taxes, you know, marshalling all the assets, putting it into an estate account or trust administration or trust account, and then ultimately distributing it to beneficiaries. But sometimes trustees will just sit on it and think, "Well, I'm going to keep renting out the properties or something like that when the trust is not designed to just stay open in perpetuity for this person to kind of just keep running and sometimes people think I don't know they have a mispers conception of what the trust is supposed to do and they think they can just do something like that." So that happens a lot of times too. There's sometimes disputes about who the beneficiaries are and if someone's a legitimate beneficiary or things like that. So a huge variety of reasons why a trust may be in probate court. But that does happen. And so if someone is petitioning a trustee to compel an accounting, then you're doing an accounting and petition, you know, submitting it to the court and getting that approved just like if you were in probate. So unfortunately then in that scenario it's not they're not taking advantage of one of the benefits of a living trust you know it unfortunately so that because you're in court you kind of doing all the same things you would do in a probate right one of the common scenarios I see is you know father and mother pass with a trust three kids are the beneficiaries one's living in the house is the trustee and he's not paying rent house may be paid free and clear or he's paying nominal mortgage and property tax and he's paying the property tax insurance feeling like he's really taking care of the house living there rentree and the other siblings and often times the other siblings are more established financially and don't really need the money but they'd like it for

20:20 Their kids or like it for college or like it for something and they and they'll call me and you know what can we do to force it and so a couple things I think come up maybe you can talk to this a little bit on a when a trust when the deedent passes that when the trust of the trust passes. I believe at that time what is a revocable trust becomes irrevocable. Right. And the assets actually change from ownership from the deedent to the actual trust. Correct. Right. Right. Right. It becomes irrevocable. Right. And then at that point the administrator of the trust has obligation to notify certain people and I think the terms would be the any of the beneficiaries of the trust as well any as well as any heirs that would normally be heirs at law meaning if they're siblings they all need to be notified whether they're whether they get the trust or not they need to know be notified the property that was in mom and dad's name is now irrevocable into this trust. Is that correct? That is correct. So the trustee is obligated to send out what's called a notification by trustee under pro probate code 16061.7 and that does go out to all the beneficiaries of the trust in addition to all the heirs who could possibly come forward and say, "Hey, I was supposed to be a beneficiary. I'm going to contest this trust." And that notification starts the clock ticking for the statute of limitations to come and contest that trust. So, it's 120 days. You always want to send that out. A trustee always wants to send that so you could stop that clock ticking.

21:50 Okay. How long does the trustee have to send that tr that notification out? It's a 60 days after death. Now, that doesn't always happen because sometimes people don't get it together till after 60 days to, you know, they're mourning a death and there's a lot going on when there's a death. So, it doesn't always happen that someone gets it out within 60 days, but that is the rule. You're supposed to get out within 60 days. Now, if you don't make that 60-day rule, still send it out. It still starts the clock ticking even though you missed the 60-day cut off or if you're a prospective beneficiary heir then and you've never received such a notice, then you would send some sort of notice saying, "Hey, you've not sent out that notice to get that clock to start." Is that what the next step would be? Well, some beneficiaries do that if they're knowledgeable about that. So, I don't know, you know, not all beneficiaries know that. What That's why we have the podcast we're trying to talk about. Yeah. Yeah. So, you may want that or you want to ask for a copy of the trust. So, when you send out that notification, you have to send out the terms of the trust that may pertain to the beneficiary, whatever. We always send out the whole trust because we really want to have full, you know, not notice and disclosure and, you know, beat the bushes for who's going to come out and contest this. We want to know that.

23:11 So, we so we send out the notification. We send out the copy of the trust. But beneficiaries are usually wanting a copy of the trust and they should ask for that copy of the trust from you know a lot of times the beneficiaries don't know who to call so they're calling maybe their parents estate planning attorney and that may not be the person who is representing the trustee so they really should contact the trustee. The trustee sometimes, I mean, unless they have good competent counsel, may not even know they're supposed to be sending that out. They may do this themselves. They think, "Okay, well, I'm gonna be the trustee." And they don't know they're supposed to be sending that notification. And so, this important part when I often get that sibling coming to me saying, "Gee, you know, we want to sell the house, but my brother's living there." You got to force the issue, I find sometimes, and go get an attorney, get the proper information. But often that includes requesting a copy of the trust and then and then you have a certain time period with which you can file objections after which you can't. And you might find that in the trust you've been you know disinherited. Well, at least it's in writing and you have the chance to either challenge it or not, but at least you're given the document. You don't have to take somebody's word for it. And that's the part that I find that people are most frustrated is they're not given any information and sometimes it's you need to ask for it because the party doesn't know that.

24:33 Right. Right. And if you're the trustee, it that really you want to be as transparent as possible and as much as you're obligated to do because when you are reluctant to give out information when there's no information that's when all the distrust really rises up and think and beneficiaries, people out there will suspect why are they not disclosing this to us? Why are they hiding something? That's how it comes off. So disclosure, transparency as much as possible as much as it is required is I think I encourage that because it just breeds mistrust when you're not disclosing things. When you do litigation where there is a trust, what are the one or two most common I mean obviously anybody can sue anybody for anything in California and they often do if there's enough money involved, but I'm sure you see one or two common mistakes made by authors of estate plans or maybe it was the client who didn't disclose, but you one or two common mistakes that lead to that estate plan being litigated where otherwise it might not have been. What would you say would be the mo one or two most common areas that are preventable or should have been avoided but there you are litigating?

25:56 Yeah. You know, this is not necessarily a mistake, but a lot of times parents want to put their children whether it's two or three or whoever it is as co-trustees. And how could that go wrong? Yeah. Yeah. And then you're and the parents love to think, "Oh, my children love each other and they all get along and really unfortunately the norm is that is not true." And their siblings, their sibling rivalry, like I said, that stems from childhood, whatever it is. And it's very interesting because when I started practicing probate law, I really thought, wow, what is going on out there that this happens a lot where there's so much of this sibling animosity and you know, and every family has it, I don't know. But certainly, you know, I'm getting exposed to that because these are the families that are coming to me. But so putting the co-trustees and having and the requirement the default requirement if you put in co-trustees is that they must act unanimously. So they must act together which is one not even practically really workable especially if these siblings don't even live near each other. But that is the default unless the trust says okay these trustees can act independent of each other. But what happens a lot is that they don't get along. One takes over. One's doing stuff that and they're not telling the other co-rustee and the co-trustees are suing each other because they're trying to compel one co-rustee to cooperate with the other co-rustee or they're trying to remove the other guy because they took all the money. They won't, you know, let the other person manage it. And so that's very that comes up a lot. And even in the planning phase, and I do planning as well. And

28:00 So even if I and I always let the client do what they wish because they really this is their money, their state they could do. However, I do advise them and tell them, you know, what the possible pitfalls are. And sometimes even with that raise and say well that you know this is what commonly happens when there's co-trustees that have to work together they still want it and so you know my job is to write in what they want because that's what they want but my job is also to fully advise them of what the possible problems could be. So that's that's a big one I would say. So it sounds like what you're saying is that giving two siblings lots of tasks and money to divide doesn't necessarily create harmony where harmony didn't exist previously. Right. Right. I can see this because you know in my case fortunately I get along really well. I have two siblings and we get along really well. I will say it's because we all make an effort to get along like and in the we had an estate where one of our family members left you know some money to us. Wasn't a lot, but it's enough that I've seen people fight over it, you know, and it was like and my sister was the administrator and she made a decision that I wouldn't have agreed with or I wouldn't have done that, you know, lowered my portion, but somebody went elsewhere, but I thought, you know, she's doing the work, you know, I mean, I could have stepped up and divided her earlier and it was a stage where was kind of at the end. So, I feel sometimes you have to really kind of, you know, is it worth fighting over? Is it worth having an argument over? And for some people, the answer is always yes, cuz for 10 bucks, I'd rather argue with my spouse and work out things we don't work out when we're 12 years old. In my case, you know, I'm at a stage of my life where I really appreciate having family and being able to get along. But it money doesn't make siblings who don't get along get along. And neither does a large number of administrative tasks.

29:53 That's never going to solve problems. Yeah. And money will actually sometimes break apart. Siblings that do had gotten along and now that money is involved and the division of or distributing the money. Yeah. Now they start having the fights when they kind of really had a decent relationship. At least they were communicating with each other before and then it kind of falls apart. I don't know if you have siblings, but like my brother and I would fight over who got the bigger piece of cake when my mother would slice it. Why would you not think we'd fight over money? Right. It's just Right. But that exactly see so that's and then it's even you know magnified tenfold because it's money and not just a piece of cake. So unfortunately that happens a lot. You know another thing that happens a lot where you're throwing a trust into some sort of court procedure at least is when that when you forget to properly fund it. So, a lot of times people say, "Okay, you know, I want you're supposed to have all your bank accounts, your real property in the trust and things like that." And on the planning stage, you know, I've seen estate plans where that's not even listed on a schedule to a trust. So, you don't even know that the property is supposed to be in the trust, but the common thing is, okay, maybe it's listed in the trust thing. Okay, this house is supposed to be in the trust, but the title has never been transferred into the trust. So then after the death, you're doing what's commonly known as a HEGT petition, 850 petition, those are the same things. And you're petitioning the court to say, "Hey, these are assets that are supposed to be in the trust. We now got to have it titled in the trust. Please give us an order to do that." And now the threshold has changed as far as like when you have to deal with Oh, I'm sorry. I'm getting mixed up with when you're opening a probate now. I do want to talk about that, but yeah, when the assets are not in the trust, you're thrown into court just to petition to get them in. And so, that's

31:57 A key thing to do out there is to make sure all your assets are titled in your trust, like the deed of your house is in the name of the trust, you know, the trustees of the trust, and the bank accounts are named in the trust, too. Yeah. Yeah. And so what you're describing is somebody goes out and buys a really fancy safe and they take their gold bricks and put them on top of the safe rather than in the safe and locking it. So you can have this great trust, but if you don't put the property in the trust or the bank accounts in the trust, then you're in essence not getting the benefit of the trust. In California, we have a workaround for some cases called, you mentioned called the Hexstead petition. But even that, you know, people say, and I've done a bunch of these, people say, "Oh, it's no big deal. I'll get a Hexstead petition." Well, it actually is a big deal. I mean, attorneys charge about the same when you work out all the numbers as a as a probate. Your initial petition in Los Angeles is 6 months. Now, you might get a earlier. You can get an exparte and if you're fortunate, get an earlier hearing, but in general, you're not going to get a hearing for 6 months. Whereas a probate, you can file, have a hearing in 35 days, full authority, sell it, you know, right after that. So, it's not it is a big deal unless it's not a big deal. And I think for people should really be careful. And I think as real estate agents, I've had the experience where the customer, you ask them about the property, J. I noticed it's not in the trust. It's your name, Bob and Mary.

33:17 Oh, no, it's in the trust. And they pull out the binder and they pull out the fancy notebook and they open it up and there's the trust document that was never signed. And then they hand you the grant deed the attorney prepared that was never signed or was signed and never recorded. Those are two different issues. And I think that's where we as Realtors®, and the reason I have this podcast is we as Realtors® should be in that discussion and catching it early rather than listing a property, getting an escrow, finding it falls apart. We should know these basic fundamentals and then have attorneys like Beti as our resource to call and say, "Hey, I think we have a problem here. Can you help us fix the problem?" One problem is it was signed but never recorded. That's a problem. Another problem is it was never signed. That's a whole different problem. Yeah. And so we want to be able to know what these problems are and try to identify them and have resources to bring to our customers to solve those problems. Exactly. Exactly. So Realtors® should always kind of pull your title report to see exactly how this property is titled at that moment. Right. And never really rely on the client to tell you or give you a deed. I always pull a title report because they may have some deed that's really not the current one. Other things may have happened after that or there you know I always look at the whole chain of title to see okay where is it landing today and what do we have to do with that titling yeah it's critical so let's talk about pivot a little bit from probate to related and in some states it's called probate but I think legally speaking conservatorships are when somebody isn't competent to management affairs and that's a moving target right one day you somebody is competent and at some point they're not and if you don't plan for that ahead of time you have to go to court in order to have somebody step in and take responsibility for the conservatorship. So talk a little bit about you know people living longer physically yet for whatever reason seems like we have more mental acuity issues or you know aging mental issues. So talk a little bit about conservatorships and what that looks like and why it's so important to avoid having to go to court

35:22 To get that done versus having it planned ahead of time. Yeah. So, conservatorships are is a court process where someone gets appointed by the court to be legally in charge of someone else who is not competent. So, the proposed conservatee person that who's going to get conserved, it needs to be shown that this person cannot manage themselves and or their own medical care, their own financial affairs. And now someone needs to get put in place to really I want to say legal parent because they're legally responsible for this other person and then that conservat's rights are actually taken away like this conservatee does not have the mental capacity to sign contracts to you know sign checks because oftentimes maybe they could get taken advantage of and just start gifting their money to someone. So those rights kind of take get taken away from the conservatee. So it's a it's you know somewhat of an ownorous sort of proceeding though it is a protective proceeding to protect this person from others and sometimes themselves when they don't know what they're doing. Now that can be avoided if you do have this estate plan in place and you have someone like under an advanced health care directive, a health care agent who is who can step up and make medical decisions and personal decisions for this person and a power of attorney and a trust. So there's a successor trustee who can step up and manage financial affairs and manage property affairs and things like that. So that theoretically should be should avoid a probate. I mean a conservatorship because there's people who legally can step up and use this power of attorney advanced healthcare directive and kind of manage this person while they're alive but incompetent.

37:18 Now say having said that sometimes there's a fight over who what's happening with these estate planning instruments and people are taking you know mom to change the power of attorney and keep changing it to who you know another sibling and whatever. And then there's a fight going on about you know a race of arms to the estate planning attorney and then may and then maybe mom doesn't have the competency and someone's just telling her to sign these papers and so then it gets thrown into a conservatorship and someone's going to petition for conservatorship because then someone could just completely kind of legally be in charge of that person. But that's essentially what happens in a conservatorship. And so we as Realtors® need to be on the lookout for these because there's more and more fraud where you know dad's living in a house by himself. Mom passed years ago. He has health issues. All of a sudden he has a caregiver. Next thing you know, caregiver claims romantic relationship. There's a new estate plan that's signed by her. He passes within a month or two. And now all the assets go to her and the kids are disinherited or whatever. I mean, I've seen several of those myself. You know, that one's a or one of the siblings is home taking care of mom or dad. And it's a fine line because on one hand, I can imagine, you know, next door, unfortunately, the wife is has full-time care. Now, the husband was lucky to get insurance to cover where there's a professional nurse 247. I can imagine if a sibling if a child's there 24/7 for four or five years I won't say it's a sense of entitlement but you are entitled I think you're justified in getting compensated or benefited or thanked or something versus the other siblings who maybe don't lift a finger to help having been in that situation myself in the past or my wife was. On the flip side though too often it's just

39:21 The son just says yeah I took care of mom and dad and meanwhile he took care of them horribly. They've suffered, you know, due to neglect and then he gets all the money sooner rather than later. So that's a fine line between the you took care of him all by yourself, you're entitled to everything versus you took care of him to his detriment and use that as your way in to get a control. As an attorney, how do you know that you're talking to the good sibling or the bad sibling? I know. Well, I always represent the good ones. Got it. Okay. But that is a really fine line and you can also it stands to reason that the parent would want to kind of reward the that sibling who's or that child who's been taking care of them for many years and you know kind of maybe gave up their job to move in and whatever. So it stands to reason like okay maybe this you know the mother or parent or whoever it is wanted to give them a little bit more to kind of thank them for that. But you never know. So you never know if that person, you know, the caregiver child influenced the mother and or father and told them to, hey, give me more because I'm here or whatever. And so there's a whole area of law about that and about undue influence and this person's in a in a position of trust and confidence and this person had to depend on that person and therefore they felt obligated to give them a bigger gift or monetary gift because otherwise this person's going to pull out and not care for them anymore.

40:55 So that's all under the undue influence kind of elder abuse type of laws about you know whe whether this happened or not and when and I do a lot of those kind of cases too. It's you know it's circumstantial evidence because nobody's really in that home to see like well when this parent signed this amendment you know was that person kind of influencing it and orchestrating that or did this parent really want to do it on their own? So, it's all circumstantial. So, it's up to the attorneys to argue both sides. It's also what day was it, right? Because having gone through this with parents, me and my wives, you know, time of day is different, right? They're different in the morning than the afternoon, for example. Some days are good days, some days are bad days, and there are days they are lucid, and you're like, "Wow, this is a whole different person. Other days they're almost catatonic." Also affected by their medicine. You know, it is a shame. One of the shames of the current news and I don't want to get into politics of it but as a Realtor® in facing this issue watching the news with the president the former president right and it's hard not talk about getting political but you know it but it also shows you how litigation works right every Democrat is now saying he was competent Republican saying he wasn't competent but having been around these people I understand no they're they go in and out during the day and they have days are different they have times a day are different and now that we find out that he was maybe battling cancer. You can imagine this cancer like my wife's a cancer survivor, but she's coming back for medicines hopefully in July. That chemo medicine is a is a real brain bender, right? So you can imagine somebody who's already older with that the medicines might affect them. And I'm just saying that you know it when you're entitled to money, you're sure you're right. But in these cases are very complicated and I just I have no idea how the judges even evaluate this and they get medical opinions but you can get a medical opinion to say almost anything and also again the medical opinions based on when they when they interviewed the subject. So this sounds like a really ripe area for litigation

42:57 To me. I don't know. Oh it's so ripe for litigation and sometimes it comes down to the battle of the experts the medical experts about what whether this person you know was competent enough to do this or not. But you're right because I mean there's different periods of lucidity and the way the law works about capacity and there's something called the due process and competency act and so you're presumed to have capacity but let's say if you even have been diagnosed with dementia you still can have periods of lucidity. Yes, you can understand I'm going to amend my trust. I'm going to sign this because I really want this to give an additional gift to someone or whatever. And so you really to u attack capacity, you have to show that person was not lucid at that moment or did not have a competency to understand that particular act. So it's difficult and complicated to make that argument. I mean legally it yeah it is it is difficult but people do it all the time and there's tons of cases about that. I was in a case once with a very wealthy real estate investor with a lot of properties. I mean hundreds of small properties and a whole portfolio of larger ones and he had you know dementia issues. He had whatever the medical issues were and he had no he had no estate plan. He had nothing. So, we're going to go through will with like 500 properties in multiple states and then 20 properties in California and at some point though they were able to create a trust and I guess mimicking the distribution at law so that nobody argued the point and they were able to create a trust to get it out of probate. A conservatorship I guess in that way when he passed it went into it was a trust rather than him passing in testate and having to go through probate to relitigate the whole process all over again. I was surprised that could get done, but the attorneys

45:00 All kind of worked it out and they all saw, look, if he dies, this is the schedule, so we'll just put the same one in the trust and that way we can kind of help expedite the process and they agreed on a professional administrator and it all kind of and would you believe with all these attorneys involved, there must have been four heirs of attorneys. They left a couple properties out of the trust by accident. So, I had the same client where I sold properties as a conservatorship, then we sold properties in the trust, and then we sold properties in the probate. It was Oh no. Oh my god. Right. But that process is called a substituted judgment pro. So it's a petition for substituted judgment in a conservatorship. When someone has lost capacity, they don't have a proper estate plan. It would be beneficial to like create a trust for yeah such a large estate like that. So the estate does not go through probate. So the conservator can bring a petition for substituted judgment or 2580 petition. So that's pro code 2580. And so you create a trust for the conservatee. So and nobody's going to argue if it's the same distributions and beneficiary designations as their will said if that's what the if they had a will. So if they had nothing then you really have to kind of the safest ways to go by intesty law and who their natural you know heirs would be or beneficiaries would be. Otherwise people will start fighting about that.

46:28 But yeah, but that's the process to create that trust for this person maybe that who has lost capacity and didn't create one. And these people fighting over every nickel look to me at least as outsider and the fact they could agree to get that done just saves so much administrative and the attorneys are all green because they more money that there's more money for them to divide at the end. So that stands a reason. But it was really it was really heartbreaking to watch and then at the end again they left a couple properties out. They were oddball. There's a whole reason why those were out, but anyhow, so worked out. Well, look, Beti, I know I've taken you pretty much to the end of the hour. So, I just, you know, so much appreciate the time you spent today educating us on probate litigation and also on trust administration and kind of a brief on conservatorships. If somebody wants to talk to you individually about these issues, either in the state plan to stay out of these problems or if they're in these problems, have questions, what I have on the screen here, I have your phone number. Is that the best way to get a hold of you? Yeah, that's a that's a great way to get a hold of me. And the website is peninsulaw.com. Peninsula Well, that's a good question. Peninsula.law. I'm sorry. Peninsula.law. Let me You know, I left that. You know, I try I'm going to talk to my production staff. On my production staff really.

47:45 So, let me fix that. Yeah, there we go. U peninsula.law is the website for more information and on there they you have all kinds of information and contact phone number and you can schedule consult right there. Beti, thank you so much for your time today. I really appreciate again talking to you again. There's a website again talking to you and I appreciate your help and education. Yeah. No, you're very welcome. Thank you for having me. It was it was a pleasure and we'll talk again soon. And for the rest of you, this is Probate Weekly. We get together every week and interview professionals in the industry, often attorneys, vendors, real estate agents, people help us be more effective at serving our customers through the probate process or avoiding the probate process. I'm Bill Gross at Bill Gross on social media. If you have suggestions, questions, feel free to put them in. If you're an attorney who wants to be interviewed on this program, reach out to me. I'm always looking for more people and also outside of other states. Beti was in California, but our platform is national, so I can help. Please reach out. As always, make today your best day ever.