Understanding Probate

 

Definition of Probate

A legal process to handle the business affairs of a person who has died. Assets need to be distributed to your heirs, your debts need to be paid and any loose ends need to be looked after.

Living Probate

A probate can also happen while you’re alive, it’s technical called a conservatorship or guardianship proceeding. Legal issues involving adults unable to, or lacking capacity to, make decisions and legal issues involving minors.

Process for Sales of Real Property with Court Confirmation

The requirement of Los Angeles County Local Probate Rule 10.89C are satisfied when the sale “events” occur in the following order:

  1. Broker Selection. Personal representative selects a broker who “farms” the area of where the property is lo9cated and who has probate experience.
  2. Listing Preparation and Comps. The Broker submits a proposed listing agreement together with a comparative sales analysis (COMPS) and a written reco9mendation regarding listing price.
  3. Listing Review. The estate’s attorney reviews the multiple listing agreement to make sure that it complies with the probate sales requirements, including:
    • 10% deposit required with all offers.
    • Property shall be sold “as is”.
    • “ No pest clearance” shall be provided by seller.
    • Sale is subject to probate court confirmation.
  4. Initiation of Publication. Attorney arranges for publication in which broker is listed as contact party. Publication MUST occur prior to the acceptance of an offer and MUST comply with California Government Code 6063a, which requires:
    • 10 Days Minimum Publication. Publication of notice pursuant to this section shall be at least 10 days. This means as publication need not take 3 weeks but can actually be completed in as little as (11) eleven days.
    • Three Insertions. Three published notices are required in a local newspaper at least published once a week, with at least five days intervening between the first and lst publication dates, but not counting such publication dates.
    • Counting Days to Satisfy Statute. The period of notice commences upon the first day of publication and terminates either at the end of the day of the third publication or at the end of the tenth day, including therin the first day, whichever period is longer.
  5. Listing Execution. Multiple listing agreement is signed by the seller for a period not to exceed 90 days. The real property is exposed to the4 public by the multiple listing service and the broker receives offers on the property.
  6. Minimum Market Exposure. Attorney prefers at least 30 days of market exposure before accepting an offer. The broker should hold 4 “broker caravan’s” and at least two open houses before considering an offer.
  7. Acceptance of Offer. Once the “on or after” date has passed, the personal representatative may accept an offer in writing after the offer is approved by counsel. An accepted offer shall be not lower than 10% of the amount appraised by the probate referee.
  8. Petition for Confirmation. Petition for Confirmation of Sale is then prepared, signed by personal representative and filed with the Court.
  9. Notice of Hearing on Sale of Real Property. Notice to buyers and both brokers and to all heirs and beneficiaries.
  10. Inventory and Appraisal. A reappraisal for sale (INA) is required if it has been more that 12 months since the date of death.

 

The Probate Timeline

Step

Duration

Prepare and File Petition for Probate 1-2 months
Court hearing on the Petition for Probate 2-3 months
The following are issued: Letters of Administration, Orders for Probate, Duties and Liabilities, Issue Bond (if ordered), & **Letters of Testimentary** 2-4 months(if not contested)
Notice to Creditors 2-4 months
Notice to Department of Health Services Inventory & Appraisement 4-8 months
Pay State and Federal Taxes (if necessary) 6-12 months
Allow or Reject Creditor Claims
Possible Preliminary Distributions
Notice to Department of Health Services (if deceased received medical)
Notice to Franchise Tax Board (if heir is out of state)
Claim of Exemption (if assets transfer to a minor) 6-15 months
Receive Final Tax letter from State and Federal (if appropriate) 6-18 months
File Petition for Final Distribution and Accounting
Hearing on Petition for final Distribution and Accounting
Order Approving Final Distribution and Accounting
Distribution of Assets to Heirs 9-17 months
Final Discharge Order (indicates close of probate case) 9-18 months
Final Distribution of Funds 9-18 months

 

Mistakes that Attorneys make in the sale of real estate in probate:

  1. Notice of sale was not published or posted.
  2. Counsel failed to give special notice, if requested.
  3. Counsel failed to give other notices required by law.
  4. Amount bid is not at least 90 percent of the appraised value of the real property.
  5. Real property has not been appraised within one year of sale.
  6. Inventory and appraisal is not on file.
  7. Counsel failed to observe local court rules on broker’s commissions or exclusive listing contracts.
  8. Counsel failed to observe local court rules regarding deposits.
  9. Counsel failed to attach legal description of the real property to petition.
  10. Counsel failed to indicate amount by which bond should be increased.
  11. Counsel failed to compute amount of first overbid.
  12. Counsel failed to state terms of sale.
  13. Counsel failed to observe local court rules on deduction “points” or termite work or other repairs in computing broker’s commission and minimum overbid amount.
  14. Counsel failed to use Judicial Council forms.
  15. Counsel failed to set petition for confirmation of sale within 30 days of date of sale.
  16. Inadequate efforts were made to expose property to the market.
  17. Counsel failed to appear at the confirmation hearing, if required by local court rules.
  18. Counsel failed to confirm notice of sale of real property to actual terms of sale on bid returned to court.
  19. Counsel failed to publish notice of intention to sell real property in all cases except:
    • when power to sell conferred in the will to the actual person acting as executor (i.e., publication required for administrator with will annexed), or
    • when will directs sale of the subject (real property) (i.e., direction to sell some different parcel does not permit waiver of publication of sale of subject property), or
    • when sale is pursuant to the Independent Administration of Estates Act.
    • Counsel failed to use current Judicial Council forms for sales.
    • Counsel failed to state terms of personal property sold as unit.
    • Counsel failed to attach legal description of the real property to the order confirming sale.

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