In a recent case, Liz’s dad had bought a co-op with his girlfriend. Liz’s dad broke up with his girlfriend but continued to co-own the apartment as “tenants-in-common.” Liz’s dad passed away, so what happens to the co-op now?
What Happens When a Tenant in Common Dies?
Unless there is a specific percentage for the tenants in common, the property divides equally.
If they had owned as “joint tenants” instead of “tenants-in-common,” then the girlfriend would become sole owner. But, the co-op shares certificate states “tenants in common.” So the girlfriend is a half owner, and Liz’s dad’s estate is now a half owner.
Is Probate Required for Tenants in Common?
The short answer is yes. Liz and her siblings must probate their dad’s estate to inherit their half share of the co-op. Right now, Liz and her siblings must appoint an executor who has legal authority to conduct business for the estate. A court-appointed executor has the right to enter the premises, to gain information from the co-op, and eventually to sell the property.
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Going through probate is a grueling 1-to-2-year process. Would you want to go through all that if you don’t even get anything out of it?
If you think the estate may be insolvent, consider hiring a professional executor.
What’s an Insolvent Estate?
An insolvent estate is when the decedent’s debts are greater than the assets. For example, the mortgage, credit card debt, and medical bills are greater than the value of the house and bank accounts.
There are also situations where the estate is close to being insolvent and you don’t realize it. Examples of this are Medicare clawback and unseen taxes. If you received medical care paid for by the government, the government will want the money back when you die. This could leave your estate with a large bill. Additionally, the IRS will look over your taxes carefully to be sure they didn’t miss anything.
Who Must Probate the Estate?
Many family members and heirs ask: am I required to be executor? The answer is no! You can decline or not act at all. Although, some may feel like they are dishonoring their deceased loved one by leaving the estate as a mess.
If you think the decedent is close to having an insolvent estate, you have options.
One not-so-great option is to let the state take over. There’s a state office (sort of like the public defender, but called a public administrator) that can step in. But, the interest in the estate and the incentives might not be the same as a person who you hire to help.
Instead, Hire a Professional Executor for the Estate
A better option is hiring a professional executor. You won’t have to do the stressful work yourself and you don’t have to feel bad about abandoning your loved one’s estate to the public administrator.
Even if the estate is NOT insolvent, you now have a relationship with the hired executor. This helps to make sure you get your inheritance. If the estate IS insolvent, then you can relax knowing that a professional is there to wrap up the estate.
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This is “Sam’s” cautionary tale of trying to DIY his dad’s estate over four years, with zero progress. I like to call this a Sisyphus story. Sisyphus was a figure from Greek mythology whose punishment for eternity was to push a heavy stone up a hill, but right when he would get to the top, the stone would come sliding back down to the bottom for him to start over again for all eternity. That is what Sam has felt like for the past four years.
Sam’s story
Sam’s dad died years ago in Europe, and Sam had court hearings in European probate courts where they were declared Sam and his siblings the heirs. But in Europe the probate process is much different than New York and the U.S., as there are no actual executors; the court just declares who are the heirs.
A couple of years later, the heirs discovered a U.S. bank account that they wanted to collect. Sam spent the next four years following bank instructions into a black hole. The bank would tell him to do one thing which led to months of playing liaison with the European courts and the U.S., only to be told that it was the wrong information. Each time this happened, Sam had to start all over again.
Finally, Sam called us, and we realized that we needed to start from scratch. Even after hiring us, Sam kept talking to the bank, which created more problems, mixed signals, and cross information.
Common Probate Mistakes
The first common probate mistake is to rely on the bank’s “advice.” The bank is not an advisor. If anything, their incentives are to keep the money in the accounts.
The second common probate mistake is to underestimate the complexity of the situation. Many clients believe that they have a “simple” probate matter when they call our office for help. However, often after we ask them some preliminary questions, we find that it is actually a complex estate matter. Any time the estate deals with overseas factors, the situation is certainly more complex. This should have been a red flag for Sam.
Lastly, once an attorney is hired to handle the estate, it does not help for clients to continue to work on the estate. Clients may think that they can help reduce the amount of work or hourly cost if they do some of the probate work themselves. That is not how it works, and it could end up costing the client more to have the attorney fix the DIY mistakes.
Avoid Problems in Probate
The bankers are bureaucrats, not your advisors. If you are not getting headway immediately with a bank, get a professional to help you. An experienced probate attorney can navigate the bureaucratic banking problems.
Everyone thinks their case is “simple.” What someone thinks is simple is probably just the tip of the iceberg of complex problems or twists. How do you figure out if you truly have a simple case or a more complicated situation? Many excellent probate lawyers offer free consults, so use that consultation to find out. Lawyers offer free consultations for a reason! It helps the attorney and the client to see if they are a good fit for each other.
Lastly, when you hire someone, let them do their job!
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Linda spent six months working with a general lawyer (meaning someone who practiced personal injury, litigation, and a dash of probate on the side). There was not much progress in those six months, so Linda became frustrated and transferred the case to us. Sadly, we had to basically start from scratch, because the general lawyer did essentially nothing.
What causes probate delays? Bad lawyers
In Linda’s situation, six months went by and it was as if nothing happened in her case. One of the reasons for the delayed probate was because the general lawyer did not know what preliminary Letters Testamentary were. An experienced probate lawyer would have noticed right away that Linda had a complicated probate and would have immediately filed for preliminary Letters Testamentary. If this had been filed immediately, Linda could’ve started “executor-ing” months ago.
Another reason probate can be delayed is drafting the Petition wrong. In Linda’s case, the general lawyer didn’t understand which family members must be notified, and therefore hadn’t even begun collecting their contact information.
Lastly, probate can be delayed because a general lawyer might not realize that the Will isn’t properly witnessed. (As a side note, this is a good reason to find an experienced attorney to draft your Will). Getting the correct witnessing on a decedent’s Will takes a lot of time, including tracking down the witnesses and having them sign affidavits. An experienced probate lawyer would notice the incorrect witnessing and get started on the correction process immediately.
As with any practice, if a lawyer does not have much experience in a certain area of law, he or she will probably miss important details and cause delays.
When a lawyer gives bad advice
In Linda’s situation, her deceased relative owned an income-producing property, and the general lawyer told Linda not to collect rent anymore from the tenants! This led to non-payment and problems with the tenants, which will cost the estate more money to work out. Instead of listing the house on the market during the summer, this lawyer’s bad advice means that Linda now must winterize the house. With proper legal advice, the house could have been sold and done with before the cold. In summary, bad legal advice causes more stress and aggravation for the client.
How can you avoid all this? Shop around: Compare lawyers, call their office, and visit their websites. Make sure you’re working with an experienced probate lawyer from the beginning.
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Sign-up for your free consultation using the form above, and I’ll be happy to email you a free chapter from Anthony’s best-selling book “How Probate Works.”
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You may be surprised to learn that we receive requests quite often from people who wish to change their probate lawyer. This was the exact situation one of our clients was facing recently. “Linda” started her probate case with another lawyer but realized along the way that he was not doing a good job. So, she reached out to us to take over the case. Here’s a look at how that works.
First, from our perspective, changing firms is a double-edge sword for a lawyer. As a rule of thumb, attorneys do not particularly like to take clients who have fired their previous attorney, as it could potentially be a red flag. On the other hand, if a client has been legitimately been deprived by a past attorney, they are grateful to have help and are a pleasure to work with, as is the case with Linda.
“Linda’s” story
Linda hired a “flat-fee” probate lawyer, which she thought was a great deal. However, after 9 months, Linda realized the lawyer had not done much. She also learned he didn’t really know what he was doing. For example, he hadn’t notified any heirs, collected any of the preliminary financial documents, or even gathered the basic information, which is typically what seasoned probate attorneys do right away. That led Linda to seek out another lawyer. Not only did she want a new lawyer to help her, but she also wanted to recoup as much of her “flat-fee” as possible. After all, not much had been done in 9 months.
How To Change Lawyers In The Middle Of A Case
If the previous lawyer hasn’t done any work on the case yet, then it is pretty easy. You can request they stop working and hire someone new. However, it gets more complicated if the attorney has spent any time on the case, which can include opening the case and corresponding with the court. If that’s the case, you will want to decide wisely – even if you can’t stand working with a particular attorney, if you are close to the finish line, it may be in the best interest of the case to see it through to the end. You will have to weigh it out.
How To Transfer Case From One Lawyer To Another
If the case has progressed to the point of filing documents with the court, the attorney who filed the documents is called the “Attorney of Record.” This means they are your official lawyer in the eyes of the court. If this is the case, you simply can’t change who represents you without the approval of the court. The court requires documentation to change attorneys at this point, essentially granting permission to change attorneys. This document must be signed by all parties, including yourself, the previous attorney, and the new attorney.
This puts you in a position of needing something from the previous attorney. Therefore, it’s not advisable to air your grievances or place a nasty phone call to their office (which is actually never a good idea). Even though you may be upset with them, you need that document to be signed.
One thing to keep in mind is that an attorney may elect to not sign the document until all invoices have been settled. You may have to pay the balances in order to move on. Although you may disagree with the invoice, in reality, if they have done the work, they should be paid. You have to weigh out if paying the outstanding balances, even though they didn’t do much work in your opinion, is worth it to change attorneys.
Another reason to keep the peace is for the transition to be smooth. Your new attorney will need to get the files from the previous attorney. While some records can be obtained from the court, the previous attorney may have originals that is easier to get from them then to retrieve otherwise.
Are Lawyer Retainer Fees Refundable?
The short answer is technically yes, but in reality, they are usually not. In New York and in other states, attorneys are not allowed to charge non-refundable retainers. Although found in most attorney agreements, it is not usually permissible. Unless you change your mind the day after you send the check, most lawyers would have done enough work to have earned the retainer. For example, opening the file, reviewing the documents, gathering preliminary documents, calling the court, etc., adds up, which may use most if not all of the retainer. Lawyers are definitely entitled to fees for the work they do, even if you are not satisfied with their work.
If you are considering changing attorneys, you may find that the cost of keeping your current attorney outweighs starting over with a new attorney. Alternately, depending on the particular situation, it’s worth it to start over. As with any decision, weighing your options before making the switch is important.
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Believe it or not, we have clients to do not wish to accept their inheritance. Although extremely rare, there is actually no legal obligation to accept, and it’s completely okay to decline. There are often situations where it is best.
In a recent case, our client “Evette” lost her long-time boyfriend. They were never legally married but were practically husband and wife. Everyone knew them as a couple, including their family and friends. In this case, Ed did not have a Will. As we have discussed previously, non-married spouses do not legally inherit from the deceased partner. Under the laws of New York, Ed’s biological adult daughter would receive 100% of his estate. The daughter, acknowledging that Evette was for all intents and purposes the spouse, has opted to include Evette in the estate distribution.
Disclaimer of Inheritance Rights
Disclaimer is a fancy word for not accepting and forfeiting your share of the inheritance. In Evette’s example, the daughter could simply say “I don’t want anything to do with it. I do not accept.”
The pro is that the daughter signs one form and she is done with the estate. No one will bother her again. If you are estranged, which isn’t the case here, that may be the best route. This option is the least hassle, but it removes all control.
The con is that if you forfeit, you no longer have a say in anything. The default inheritance laws would kick in and the share would go to the next in line. In this case, Ed still has brothers, and by law it would go to them, which is not what he wanted.
Can I Give My Inheritance to Someone Else?
Sure, you can give your inheritance to someone else, but only once you receive it, which could be months or years after probate starts. The drawback is that there is much uncertainly. In this case, the daughter will be waiting for quite a while to receive the funds. In that time, she can simply change her mind about giving a share to Evette. Additionally, the daughter will need to stay involved in the probate process, whether she wants to or not.
Transferring an Inheritance by Executing an Assignment
In this case, an Assignment of Interest is the best option. Here, the daughter will sign a document agreeing to assign a percentage of her share to Evette.
Instead of waiting to see if the daughter will actually share the inheritance with the girlfriend, this this formality creates certainty and can help eliminate any issues that could arise between a family.
Request your free consultation
Sign-up for your free consultation using the form above, and I’ll be happy to email you a free chapter from Anthony’s best-selling book “How Probate Works.”
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Quite often we are asked by family members and heirs what the process is to sell a deceased person’s home. It can be a complex and typically you should have a lawyer, but this blog shares a general understanding of how it works and what you can do to get started.
Did the Deceased Own Property?
While most people assume that the decedent owned their home, we have seen on many occasions that isn’t the case. For example, they may have been renting or owned the home jointly.
The first thing you should do is look up the deed. This is actually easier than you think. Most counties have online searching capabilities, and a quick Google search will help you find the right place (the New York City system is called ACRIS). By pulling the deed, you will be able to confirm if the property was owned by the decedent, owned along with another person, or owned by someone else.
Two Names on Deed, One Person Dies
You may discovery that the decedent owned the property along with another person. If it’s a husband and wife, then you generally don’t need to do anything in terms of probate. The house will simply go to the wife.
Similarly, if it is a Joint Tennant deed, wherein two people are the joint owners. Using Jack and Jill for this example, then the house would be solely owned Jill if Jack dies, without having to go to probate court.
Lastly, the deed may say that Jack and Jill are the non-married owners or Tenants in Common. If that’s the case and Jack dies, then Jack’s estate still owns 50% of the property. You would have to go to probate court to deal with Jack’s half.
What Happens to House in Trust After Death?
Another scenario you may discover when you review the deed is that the house is owned by a trust. In this situation, you need a copy of Jack’s Trust to see what should happen to the property when he dies. You most likely can avoid probate court, depending on the trust wording.
Didn’t Own His Home
As we mentioned, it’s common for the person to not own their home at all. They could be a renter, be living in a home owned by a deceased grandparent, etc.
It’s important to pull the deed to figure out the ownership so you can move forward properly.
Do You Need Probate to Sell A House or Can You Sell a Deceased Person’s House Without Probate?
The short answer is yes, you can sell it without probate if the property was owned by a spouse or in a trust. However, if it’s in the decedent’s name alone, then you will need to go through the probate process.
PRO TIP: Some will try to tell you that technically you can sell without probate, with simply signing a document called an Affidavit of Heirship. Some fast-moving brokers may try to sell you on this idea. However, be aware that in most cases the title company may not accept it. The title company does not want the liability of ensuring that there are no issues with the estate and property. It’s too risky for them.
How to Get Access to House After Death
Another reason you may have to go through probate is to gain access to the house. In New York, if a decedent died at home, then the house is sealed with police tape. No one can enter the house until you have proof that you are entitled to be there. If the home is in a condo, co-op, or other managed building, they’ll want to see proof of authority before giving access. This proof comes from the court in the form of Letters of Testamentary.
Who Does Probate Protect?
Although you may think you want to avoid probate at all costs, that may not be the right concept. Probate is a process meant to protect you as an executor as well as the heirs. It safeguards all parties from being held liable for debts, such as the IRS and creditors that may come up down the road.
Considerations When Choosing an Executor
Specifically relating to selling a deceased person’s property, there are a few key points to keep in mind. See How to Choose an Executor, which digs deeper into how to choose an Executor.
Does Executor Have to Live in Same State?
Technically, no. You can be a US citizen and live outside of the state. But there are major drawbacks to not living in the state where the estate is probated.
Do I Have to Travel to New York for Probate?
Yes! Although as the executor it’s not technically required to live in New York, be aware that the executor will need to travel to New York. Typically, this is not just one trip. Even though we’re in 2020, some things still must be done in person, such as opening an estate bank account. So yes, living in New York is the best option.
When is an Estate Bond Required?
Bonds are sometimes required of the executor by the probate court. To get a bond, the executor will need excellent credit. When you are deicing about an executor, make sure it’s someone who will qualify. Those with financial issues and bankruptcies are not good candidates. They most likely will not get a bond.
How to Empty a House After a Death
When it comes to a deceased person’s home, not only do you have to empty the contents, but you may have to remove people that live there.
Eviction After Death of Owner
There are times that eviction may be necessary to remove a tenant. Commonly, once the owner dies, tenants feel they don’t need to pay, essentially living rent free. Therefore, eviction is necessary to be able to sell the home.
Eviction is a long process which takes on average 6 to 9 months. Therefore, you should get the ball rolling right away. If you wait for the tenants to do it on their own, you may add months or even years to the process.
Can an Heir Be Evicted?
Absolutely. Even if it’s family. While there are steps and complications, it can be done. And it may be necessary for it to be done.
Removing Items from House After Death
Lastly, you will need to clean out the items from the house, possibly disposing of the belongings. When serving as a professional executor, we take photos and videos of everything. After items are distributed according to the will, we send the photos to the heirs and ask what they would like. From there, we either have to find others that would like the items, donate them, or simply dispose of what is left.
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Sign-up for your free consultation using the form above, and I’ll be happy to email you a free chapter from Anthony’s best-selling book “How Probate Works.”
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So probate fees are usually more, sometimes tens of thousands of dollars!
When to probate fees have to be paid?
Generally, lawyers require an upfront payment, or retainer, before starting work on your case. The upfront payment is usually a few thousand dollars, depending on the estimated total fees.
Many folks, understandably, just don’t have that money readily available, and ask “can probate fees be paid from the estate,” at the end?
Yes, but only under certain circumstance. Why? Because estates can be unpredictable, with many twists and turns. While you may feel certain that there’ll be plenty of funds to cover the lawyer fees, we’ve often seen:
Unexpected mortgages or debts
Unknown huge taxes due
Assets aren’t worth what you expected
Assets had a named beneficiary, and therefore not part of the estate
What to do if you can’t afford probate fees?
If you don’t have the cash on-hand to pay a lawyer’s retainer, here are some of your options to start your probate case now.
Deferred lawyer fee
Work with a lawyer who will accept a deferred fee (paid at the end, from the estate). If you’re able to find a lawyer to work with no upfront payment, expect some conditions.
For example, our office usually only accept deferred fee cases if you’ve also asked me to serve as your professional executor for the estate.
Contingent lawyer fee
Contingent fees are the ultimate “no win, no pay” arrangement. If your lawyer in unable to get your inheritance for you, then you don’t owe any fees. He only gets paid if he succeeds in getting your inheritance.
As you might expect, the trade-off is the fee will be higher than if you paid upfront: usually 1/3 of your recovered inheritance. But if you don’t have the cash to start your case otherwise, you’ll be glad this option even exists.
Sign-up for your free consultation using the form above, and I’ll be happy to email you a free chapter from Anthony’s best-selling book “How Probate Works.”
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No, it’s not a good idea to have an out-of-state executor. Although it’s technically legally allowed, in reality an out-of-state executor causes tons of problems.
Banking Problems
Opening the estate account
You probably think opening a bank account is a piece of cake. And you’d be right, if you were opening an account for yourself, personally.
When you have a problem with your personal bank account, these days you have limitless customer support options. Website, email, live chat, tweets, or call or walk in.
But with estates, you usually must walk into a branch and speak with a banker to get that missing statement or re-issue that 1099. And that can be a pain for an out-of-state executor.
Selling Real Estate
Clean out
Yes, cleaning out the home or apartment is part of the executor’s duties. For an out-of-state executor, this can mean several trips in and out of New York to supervise the clean out.
Closing
New York is one of the few states where most real estate closings are in-person, with all parties sitting around a table for a few hours.
Yes, it’s sometimes possible to close with an out-of-state executor by signing and FedEx-ing the documents. But if any problems popup (as they often do with estate sales), it’s better to close in-person, so the lawyers can troubleshoot any problems in realtime, and avoid an aborted closing.
Minor stuff (mail forward, etc.)
There are countless small executor tasks to get the home ready for sale. Forwarding the mail, small repairs, returning extra keys, conversations with the super, etc. All much easier to handle with a local, New York executor.
Travel restrictions
Sometimes an executor simply cannot legally enter the US:
Unable to get a visa
Immigration problems
Quarantine or other travel restrictions
If any of these apply, the heirs may be better off hiring a New York professional executor, rather than a non-New York person.
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Most NYers know the deal with co-ops: they’s less expensive than condos, but they come with a lot of rules and headaches. Here are 3 real world examples:
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