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Elderlaw: 09/01/2015

Elderlaw Advocates



Dear Len & Rosie,

My husband died two months before our divorce was completed. Before his death, he wrote a will naming his divorce lawyer as his executor and his children as the beneficiaries. I fear this lawyer is biased and will not execute the will in a fair manner. I appeared in court and the judge told me to file a written objection.

I am concerned about my children’s rights because the will leaves everything to his children, and nothing to mine. There is also an insurance policy that names me and both of our children as beneficiaries, but the will leaves this policy to his children.

Medha

Dear Medha,

It’s unfortunate for you that your husband had the benefit of a good divorce attorney. While it’s to your disadvantage that your husband created a new will, it was good legal advice for his attorney to have advised him to do so.

You will probably lose in your effort to have someone else named as the executor of your husband’s estate. Unless your husband’s will was not properly signed and witnessed, it’s a valid will, and the court will appoint the lawyer as executor. The only way to successfully fight this is to show that the lawyer cannot be trusted to impartially represent the estate.

The fact that he represented your husband against you in the divorce is actually to the lawyer’s benefit. His job as executor is to represent the interests of the beneficiaries of your husband’s will, not you. Your children from your previous marriage have nothing to do with it, because they are not your husband’s heirs.

But there is good news. If you and your husband did not enter into a marital property agreement dividing up the marital property before his death, you may have a claim against a portion of your husband’s estate, regardless of what his will says. You are entitled to your half of the community property, even if it was solely in your husband’s possession when he died. On the other hand, his estate may have a claim against you, if you were holding community property in your name alone. You should review the case with your family law lawyer before you consider filing a claim against your husband’s probate estate.

The other silver lining in your cloud is that your husband did not change the beneficiaries of his life insurance policy. Doing so probably would have been a violation of the Automatic Temporary Restraining Orders that are issued when either spouse files for divorce. Lucky for you, insurance policies that have named beneficiaries pass outside of probate. The beneficiary form he signed leaving the policy to you and all of the children trumps his will. You should be able to collect the portion of your husband’s insurance policy for which he named you the beneficiary.

Len & Rosie

Dear Len & Rosie,

I have heard conflicting information about trusts vs. wills regarding probate. If you only have a will, does it have to go through probate in California? If so, how long does that process take and how much does the family “lose” to probate?

Charlotte

Dear Charlotte,

Your probate estate will consist of everything you own when you die that is not in a trust and that hasn’t got a surviving joint tenant or pay-on-death beneficiary. It doesn’t matter whether or not you have a will. If the gross value of your estate (that is, the total value before debts are subtracted) is more than $150,000, then your estate must pass through probate in the courts.

Probate is time-consuming and typically takes anywhere from nine to 15 months, at least. Probate is also expensive. Probate lawyer fees are set by statute as follows:

4% of the first $100,000

3% of the next $100,000

2% of the next $800,000

1% of the amount above $1,000,000

The lawyer for a $500,000 estate gets paid $13,000. If the estate is worth $1,000,000 the lawyer is paid $23,000 for exactly the same amount of work. And since the executor or administrator gets the same statutory fee, it’s doubled unless your executor waives fees. And this does not count “extraordinary” fees that are routinely approved by the court for “extra” work such as selling your home.

How do you avoid probate? If your estate is worth under $150,000, then you don’t have to do anything to avoid probate. Your heirs can collect your assets 40 days or more after your death with small estate declarations under California Probate Code section 13101. Many banks have their own forms for this, so a lawyer may not be needed at all. Transferring real property of small value is harder. Your heirs will have to have the property appraised by a California Probate Referee and petition the court. But it’s still a lot easier, faster, and cheaper than a full-blown probate.

You can avoid probate by holding title to your assets in joint tenancy with your heirs, or by using bank account pay-on-death beneficiary designations. Surviving spouses inheriting an estate can also avoid probate with a Spousal Property Petition. The problem is that joint tenancy can backfire. Your children may decide to take the money and run - it happens sometimes. Also, if your children are on title to your home, you’ll have to ask them permission if you want to sell your home or take out a new loan. Your home could even be subject to the claims of their creditors.

For these reasons, the best way to avoid probate is with a revocable trust. Trust assets are not part of your probate estate and are therefore not subject to probate. A revocable trust is also completely under your control so you will not have to seek your children’s approval for what you do with your own property.

Len & Rosie



Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, by phone at 996-4505, or on the Internet at www.lentillem.com.


Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, by phone at (707) 996-4505, or on the Internet at www.lentillem.com. Len also answers legal questions each weekday, Noon-1 p.m. and Sundays, 4-7 p.m. on KGO Radio 810 AM.
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