How Probate Works. A Guide for Executors, Heirs, and Families.

E291 What is a Strong Offer on Probate Real Estate

E291 What is a Strong Offer on Probate Real Estate?

Is the highest offer the strongest offer? Not necessarily, especially in probate. Sometimes an heir or a co-executor believes they can get a higher offer. Then, all things being equal, we should take that offer. However, it’s unusual that two offers are identical. There are other factors to take into account besides the price.

3 Fs of probate homebuyers

3 Fs of probate homebuyers

We use the 3 Fs to make sure the buyer is a good fit for a probate real estate sale.

  1. Financials

An all-cash offer is the best offer. There is always the risk of a mortgage getting denied. However, some probate properties are well-suited for a traditional mortgage situation.

We also want to see a good, healthy down payment, as well as substantial post-closing funds. In other words, the buyer should have uber financial strength.

  1. Fast

We need to sell fast in probate, but we won’t acquiesce to a bad offer just for speed.

A normal seller who doesn’t like a deal can reject an offer and continue to live in the home. But for an estate, the property is vacant. So, the estate is bleeding cash every month to pay maintenance, utilities, and existing mortgage.

Also, any vacant property will fall into greater disrepair, especially over the winter. One bad winter can lead to much wear and tear. If the owner is alive and living in the home, they would know about a problem and take care of it. Whereas, in a probate property, the executor will have to keep checking in and find time to deal with issues that arise. Long-sitting vacant properties will have less value due to less upkeep.

  1. Flexible

An executor cannot afford the time to handhold a first-time home buyer. The buyer needs to know what they are doing throughout the process. We’re busy working on the estate side of things. For example, we need to get additional court orders if the executor is bonded. We have to get special approval to sell the property, get tax waivers, get approval from the IRS to close the sale, and all sorts of other issues.

Now that the buyer has met the 3 Fs, in what circumstance might we accept the lower offer?

Is this probate homebuyer credible?

We often get investors as buyers for probate properties. Usually, it’s too much of a mess for first time home buyers or first-time renovators. We want to weed out those buyers who just watched a YouTube video on how to flip a house and are looking for a probate steal.

But on the flipside, experienced investors can be a little sneaky trying to get the best deal. There are savvy investors who come in at a pretty aggressive/high offer with the goal of clearing out all the other offers. Then the savvy investor becomes the focus of the negotiation. Once they are the only ones left at the table, they start nickel and diming you down to the price of the next best offer.

Will the probate home sale actually close?

Even if the buyer comes in 15% higher than the next best offer, will their mortgage actually get approved at that amount? Will the co-op or HOA approve the buyer? If we are selling an artist’s loft in Soho, and the buyer is completely unrelated to the fit and culture, they could get rejected. In New York, you can be rejected from buying a co-op for almost any reason except being a protected class under anti-discrimination laws.

Again, savvy investors may make the highest offer, but when they can’t get it negotiated down to their liking, they will bail. This does not mean that you will get to keep their down payment; they will just litigate. It’s not like a traditional buyer whose eggs are all in that basket. These investors have money to let things sit for a few months while they sue you. We avoid those buyers like the plague, because we do not need probate held up and the property still sitting vacant.

Sometimes, an offer is too good to be true. We know enough to see the red flags. Naturally, clients want to know why we may not accept the highest offer. We have to explain carefully to our clients that these types of deals will not close at that offer number.

If you want to learn more about how probate works in general, check out my book, “How Probate Works,” available on Amazon.

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E288 There’s No Such Thing as a Perfect Estate Plan

E288 There’s No Such Thing as a Perfect Estate Plan


“There’s no such thing as a perfect estate plan,” Sherlock Holmes would probably say if he did probate. What we mean is that things may not work out the way you plan, no matter how hard you try.

We’ll review an anonymous probate case study, where even in an ideal planning scenario (knowing the time of death to the minute, and plenty of time to plan ahead), there were all sorts of probate problems.

Solo Ager, Linda, was terminally ill, and had a planned end of life. This means she knew, to the minute, when she would pass, and she had months to plan in advance. Here’s how her probate unfurled. This is not a criticism of Linda; rather an acknowledgement that it is difficult to plan a perfect estate.

What part of her estate plan worked?

First, Linda hired us as her professional executor. This acted as a safety net because we are experienced to look for problems (and she let us know that there would be problems).

Linda also had pre-planned funeral arrangements, which allowed her remains to be treated exactly how she wanted.

She made sure to arrange for the care of her dog. This helped to avoid the panic of a dog in the apartment with no caregiver.

Lastly, she did a good job of canceling her utility services. Usually, we have to determine what services the decedent utilized, so this saved lots of time.

What part of her estate plan didn’t work?

First, Linda did a good job of preparing her will and naming a professional executor. However, she kept her original will in her apartment, instead of storing it with her attorney or somewhere else. This caused problems for several reasons.

If your original will gets lost, it is presumed that you intentionally destroyed it, thereby revoking it. If your attorney, CPA, or trusted advisor loses it, then they can petition the court to rely on a copy. The professional has no right to revoke your will, so it can be assumed that they just lost the original. While a professional losing a will is not good, at least it doesn’t negate the whole thing.

Storing the original will in your apartment requires another layer of the court process. The executor needs the will to get letters of testamentary in order to enter the apartment. This doesn’t work when the will is in the apartment to begin with. It’s quite the conundrum. It’s not the end of the world if this happens; there is a special procedure in place so the executor can enter the apartment to look for the will. This procedure just adds more time and money to the process.

Second, Linda relied too much on her cell phone. She had a lot of information on her phone, and she referenced that information in her instructions to us. She even gave us the password to her phone. Unfortunately, her phone was stuck overseas. We learned the hard way that you can’t just mail a phone. The battery causes issues in shipping, and the phone may be dismantled by the custom agents. There is a lot of red tape in mailing a phone. Now, either I or another authorized person will need to transport the phone to the United States.

Lastly, Linda arranged for her keys to be mailed to us, but we have not received them. Once we get appointed by the court, we will work it out with her apartment building.

What were some unexpected probate problems?

First, Linda assumed that her friends and heirs would work harmoniously with her professional executor (me). So far this has not worked out. One family member thinks I am a fraud because Linda didn’t tell her family about her plan. Another heir is not happy about how this is working out, so the heir hired her own attorney.

Linda assumed that I would be able to call her family and friends to get information that I need. But that didn’t happen. I doubt Linda expected this from her loved ones – no one usually does.

Of course, we will work around all of these issues; it’s what we do! From a planning perspective, her plan was a very good best-case scenario. There was no time variables and she had plenty of time to plan. But, even in the best situation, nothing is perfect.

To learn more about probate, check out my book, “How Probate Works,” available on Amazon. The best way to plan is to look at how it may all unfurl in the end.

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E284 Tips for Cleaning Out Deceased’s Home

E284 Tips for Cleaning Out Deceased’s Home


Here are our tips for cleaning out the decedent’s home and getting it presentable for sale.

Identify the estate clean-out problems

Identify the estate cleanout problems

For example, did the decedent die recently, or has some time passed? Sometimes folks become ill and move into a facility, leaving their home behind. We often see these homes in disrepair (leaks, mold, gas shut-off, rotting food, etc.). Alternatively, if the decedent was living at home and died suddenly, then there may not be so many issues. Remember, in New York, you won’t be able to get into the house right away after someone passes. You will need to get permission, and that process should be built into your timeline.

Next is the amount of clutter. This depends on the square footage of the home. Was the decedent a hoarder? How much are the heirs taking with them? Whatever the heirs take will reduce the amount you have to clear out.

Lastly, are there property-specific issues? We’ve discussed in the past how New York co-ops are a very unique animal! Lofts can present specific issues, as well. Make sure you take into account elevator access, permission from the Board, etc. when you develop your clean-out plan.

Find the best clean out service for your estate

Find the best clean out service for your estate

There are two types of services: clean-out and cleaning.

Clean-out service means the big, burly dudes who carry out the furniture, etc. A cleaning service provides vacuuming, wiping, dusting, etc.

The best service for an estate situation does it in one shot. Work with a team who is experienced in sizing and estimating the deal and is big enough to provide crew and trucks to handle it in one day. There’s no apartment in New York that can’t be handled in one day with the right team.

We had a recent bad example: GotJunk sent 1 truck and 2 small guys for a 2,500 square foot loft! There was a lot of stuff, and we had to do the clean-out over two days. That’s two days of cost, as well as inconveniencing the other neighbors in the building.

Second, make sure the service is reputable and insured. Buildings will require a COI (Certificate of Insurance); they won’t let anyone in to do the job. Co-ops and neighbors also appreciate well-manned crew. They don’t want bubble wrap and tape littering the halls and elevators. Keeping the common areas clean goes a long way in maintaining the relationship with the neighbors and co-op board.

Lastly, a good clean-out service will get the home broom clean. They not only clear out the junk but actually bring in the broom to clean. We’ve dealt with some clean-out companies who left bits of extension cords and zip-ties and tape on the floors. While it may not be a big deal, it does shift the burden and cost on to the next step: the cleaning service.

How to choose a cleaning service

How to choose a cleaning service

The goal is not to clean the home so someone can move in and eat off the floor. You need to have the home presentable for sale. A sell-able condition may mean different things for different situations.

If you are selling to the typical retail buyer, then you should get the home as pristine as possible. However, if you know the home will only attract investors, broom-cleaning is fine.

If the house situation is borderline toxic, you may need a professional crew. For example, there could be bodily fluids from the decedent’s death. Or maybe the level of mold in the bathroom or kitchen is dangerously high. If you encounter these situations, you can search for a local crime-scene cleaner. It might sound extreme, but they can provide a next-level cleaning service.

As we’ve discussed before, there are a lot of moving parts to the probate process. To dig in deeper, check out my book, “How Probate Works.”

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E281 MTA Covid Death Benefit and Beneficiaries

E281 MTA Covid Death Benefit and Beneficiaries


Does the MTA covid death benefit have beneficiaries, and if not, who should inherit? The MTA is paying a pretty generous amount (about $500,000) to the estate of any employee who passed away with or from covid. The requirements seem to be tightening up a bit, but we’ll see what comes of it.

Have your MTA Covid death benefits been paid to the wrong person?

We’ve had a few of these cases. Although well-intentioned and hardworking, the folks at MTA don’t seem to be experienced with estate issues. They are probably also overwhelmed because Covid benefits are a new thing. Because the benefit is significant, MTA is probably getting a different energy from these heirs as opposed to heirs just looking to claim the decedent’s last paycheck.

For example, Mr. S. was confused because MTA told him they would pay benefit to him. Since he was named as beneficiary on son’s pension, Mr. S. was told that the Covid benefit would go to him, too… even though Mr. S.’s son had a surviving wife and kids.

It seems that the son never updated his beneficiary designations when he got married and had kids. We see this happen often, and it is a main reason why we don’t recommend using beneficiary designations.

In another example, the MTA paid the full amount to Mrs. B., but her husband died with no will and with kids from a prior marriage.  When you die with no will, your estate is supposed to go roughly half to your surviving spouse and half to your kids. Should his children from a prior marriage have received part of the benefit? It was actually the kids who called us to ask this, because dad’s second wife (Mrs. B.) got all the MTA Covid death benefit money.

Does the MTA Covid death benefit have named beneficiaries?

Does the MTA Covid death benefit have named beneficiaries

While possible, it is highly unlikely. This emergency benefit only came into existence less than 2 years ago. It’s an automatic benefit, not something employees signed up for, like a pension or life insurance.

If naming a beneficiary is not the case, it’s highly unlikely that Mr. S. being named on the pension carries over to the Covid death benefit in the example above. I can’t think of any other scenario where beneficiary designation from one policy gets automatically transfers to another. That’s like saying, “I named my wife as beneficiary on my life insurance, so she should get my IRA, too.” We ended up confirming that there was miscommunication with the MTA in Mr. S.’s case.

Who is supposed to inherit the MTA Covid Death Benefit?

Who is supposed to inherit the MTA Covid Death Benefit

In the absence of beneficiary designations, death benefits get paid according to the will, or if no will, then according to default inheritance law (intestacy). This has been consistent in our dealing with the MTA. They are requiring proof of a court-appointed executor or administrator before they pay anything to anyone. In our experience, the MTA has been handling this properly, yet sometimes heirs have a misunderstanding.

So in Mrs. B.’s case: If a spouse has received funds and no funds were paid to the kids, either:

  1. There was a will that the kids didn’t know about and they were disinherited under that will; or
  2. Maybe the spouse received funds not as the wife, but as the executor/administrator. If this is the case, the funds may pay out to the kids when estate is closed; or
  3. MTA paid the benefit directly to Mrs. B., even though she is not the executor/administrator; or
  4. B. received the check in her capacity as executor/administrator, and she is not fulfilling her duty as fiduciary.

So, with $500,000 per claim, has the money run out? The program still exists, but the MTA is tightening qualifications for the benefit. When we first worked on these claims, “Covid” just had to be on the death certificate. Now the MTA wants medical records, and Covid needs to be the primary cause of death. They now have departments and committees dedicated to determining whether this benefit will be paid out.

If you have questions about your family’s eligibility or rights, please contact us. We’ve worked on several MTA Covid death benefit claims and have developed relationships with the MTA. We can get this done for you!

If you want to learn more about how probate works in general, don’t forget to check out my book, “How Probate Works,” available on Amazon.

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E279 How to Sell a New York City Loft in Probate

E279 How to Sell a New York City Loft in Probate


We’ll discuss how to sell a loft in probate. This is yet another type of apartment that is unique to New York. We’ve talked about co-ops in the past, which seem mind-boggling to many people (even New Yorkers).

What is an artist-in-residence?

It is too much to cover in depth, so this is a link from Street Easy, a local real estate blog: https://streeteasy.com/blog/sohos-artist-in-residence-law-101/

To live in a loft that has been converted from commercial use, the buyer is supposed to be an artist who lives in their studio. In other words, a work-living space. Not that many people are professional artists, but buyers may be required to be a “certified” artist.

What is an artist-in-residence

This impacts probate by sorting through paperwork to confirm that the decedent was an artist-in-residence. This requirement also limits your pool of buyers.

There’s a process to get certified as an actual artist by the City of New York. As with any bureaucratic process, apparently there are lots of workarounds. And there must be, because I’ve never seen an actual artist living in these multi-million-dollar lofts. Note that there is an income requirement; you can’t just make finger paintings and declare yourself an artist.

It’s a niche issue, so make sure to work brokers who have deep experience. Otherwise, you will end up wasting a lot of time and limiting the number of potential buyers.

Cleanout: the elevator problem

Many of these were warehouses converted into lofts. That means there is not a traditional lobby with an elevator. The elevator goes directly into the living space. There is a key to each floor, so the elevator won’t randomly go to someone else’s loft.

Cleanout- the elevator problem

While this living situation is cool and unique, it leads to some issues from the executor’s perspective.

For example, when you are using the one elevator that leads to all the floors, you are denying the other residents use of the elevator while you are cleaning out the decedent’s loft. This is not unique to probate; it happens when anyone moves in or out. It’s just one more twist for the executor to deal with.

We experienced an odd situation where we didn’t have the key to the door that led from the elevator to the loft. The locksmith drilled, held the elevator door open with one hand, and then had to undo everything to let someone else on. Then he had to start over again to help us.

The positive side is that these elevators are huge, since the lofts used to be warehouses. You can fill it with stuff and might only need two or three runs before giving the elevator back to the rest of the building.

Unique layouts of New York City loft apartments

Unique layouts of New York City loft apartments

There are no rooms; just a huge open space! You can get an architect and a contractor to put up some walls, but in its raw form, it is just a huge open warehouse floor.

Again, this is not unique to probate, but to anyone selling a loft. You’ll have a narrow set of buyers who are interested in living like that. Executors, since you have many other things to worry about, make sure you are working with a broker who is familiar with selling these lofts.

Lofts are very unique, but plenty of buyers love the space and uniqueness. And as a double-whammy, many of these lofts are co-ops, as well! So, you may deal with extra problems and rules.

To read about various probate-related situations, check out my book, “How Probate Works,” available on Amazon.

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E276 Problems Selling Probate Real Estate Septics, Brokers, and Co-op Listing Prices

E276 Problems Selling Probate Real Estate: Septics, Brokers, and Co-op Listing Prices


We’ll share 3 recent problems we encountered while selling probate real estate: a bad septic tank, firing a broker, and co-op listing prices. We’ll share these stories with you and add key takeaways for executors and those facing probate.

Septic tank problems in probate

Septic tank problems in probate

Any leak or other problem involving a septic tank is a huge headache. Septic water leaking into the ground soil is an environmental violation.

In our case, a problem appeared during the septic inspection (thankfully it was not a full-blown leak). It required our whole team (me, the other attorney, and the real estate broker) to work together quickly to save the deal by replacing the tank. As we’ve mentioned several times before, selling probate real estate quickly is key. Otherwise, the estate bleeds money while the property sits on the market (not to mention impatient heirs and looming IRS deadlines).

Takeaways:

  1. You need a great team (broker, executor, attorney) who understand probate, the need for speed, and the risks to the executor. These are tough situations that require competent professionals. The team must be able to communicate well and do it quickly.
  2. It is best to have a local executor: someone who understands local laws and customs.

How to fire a real estate agent

How to fire a real estate agent

This situation is never easy, but being an executor is not for someone who avoids conflicts. Speed and risk assessment are two things that are important during probate.

So, if you have a broker that is taking too long to sell, it will anger the heirs. Taking too long to sell also puts the executor at personal risk for the loss of property value. The executor can’t just let it sit and let the bills accumulate.

A real estate agent who is not a good fit may make poor pricing decisions on your behalf. Perhaps the agent is a slow communicator or a poor evaluator of buyers. You don’t want to waste time on buyers who cannot close.

Takeaways:

  1. Take time to choose the broker carefully.
  2. Make sure they understand probate’s unique risks and priorities.
  3. You should try to hire an executor with a trusted network of reliable, experienced agents.
  4. If the executor doesn’t have a specific real estate agent to work with, a savvy executor knows to sign a limited listing agreement so he can get out of it quickly if needed.

Co-op pricing strategy

Co-op pricing strategy

This is kind of NY-centric, since there aren’t a whole lot of co-ops elsewhere.

We’ve talked about why co-ops are a pain for probate, and pricing is one of those reasons. In probate, you want to price aggressively (low) to sell with speed. You wouldn’t want the neighboring unit to sell faster than yours because you wouldn’t come down $10,000. But you don’t want to list too low, because you must get a good value for the heirs.

On top of this balancing act, the co-op adds more complexity: the co-op board must be satisfied with the price, so it can’t be too low. The co-op has the right to reject deals that don’t preserve the value of the building as a whole.

Because of this, co-ops listings can:

  1. Make the price too high for the market but make the co-op happy. Then it sits for months.
  2. Make the price lower and get buyers, only to have them frustratingly rejected by the board over and over. This ends up being a waste of time, and the co-op goes back on the market.

Takeaways:

  1. You need savvy executor who can set realistic expectations for heirs and explain to them that co-ops are just difficult to deal with. In this situation, an executor outside of NY with no knowledge of co-ops would be a huge disadvantage.

We hope these anecdotes were helpful to you. To learn more about how probate works, check out my book, “How Probate Works,” available on Amazon.

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E272 What Happens to Personal Effects When Someone Dies?


Sometimes the small personal effects can have a big impact. It may be the irreplaceable keys to the loft, the invaluable smartphone, or treasured photos in the wallet.

What are personal effects?

What are personal effects?

They are usually personal property; items of particular significance that are carried or worn. These can be wallets, jewelry, phone, keys, etc. Items above a certain value, like a diamond engagement ring, fall into a different category.

If she died in a care facility?

Sadly, more often than not, some personal property will go missing at a care facility. It’s a sad indictment of humans everywhere. When a lot of people pass through a patient’s hospital room (EMTs, nurses, doctors, visitors, janitors, etc.), there is bound to be a set of sticky fingers with no way to figure out who did it.

If she died in a care facility?

Personal property sitting on a patient’s nightstand is an easy grab. The thief may not be a habitual thief but could simply be a person who sees a crime of opportunity. We’ve had this happen in many of our estates, sadly. The family knows that their loved one had a piece of jewelry at the care facility, and now it’s gone. Heirs understandably get mad, and there is not much anyone can do. Unfortunately, this is something below the district attorney’s radar and is typically hard to prove.

If she died at home?

In New York, when someone dies in their home, the police come and put up yellow police tape. You then need Letters Testamentary to enter. The police search the home for personal effects and put them into the evidence room at the police precinct. So, if you do get into the home and can’t find something, check the police precinct.

If she died at home?

Also, the police purge non-cash valuables within 1 year. They can’t hold things forever, or they will run out of room. If you are looking for the decedent’s keys or special photos, etc., you need to get to the precinct as soon as you can. A year may sound long, but time seems to go fast when you’re probating an estate. Sometimes it can take a year to get Letters Testamentary, so you need to move fast!

Be aware that you will need to find the correct police precinct. We had an estate where we thought the personal effects were at the local precinct, but they were stored at the main one.

This sounds like a pain, but at least the police secure the property and there is a paper trail of what they found.

If you want to learn more about how probate works in general, don’t forget to check out my book, “How Probate Works,” available on Amazon.

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E269 Business Valuation During Probate

E269 Business Valuation During Probate


Business valuation is tricky even under the best circumstances. And the probate process adds a few more twists.

Not turnkey

Not turnkey

The first twist is that you are probably not selling a turn-key business. Some people come to us with valuation approaches such as 1) Comparables (what similar businesses have sold for in the area) and 2) Discretionary income (meaning, what sort of income does this business throws off, multiplied by the number of years you expect to earn that).

Both approaches assume the business is fully operational, which isn’t always the case when the owner has passed away. You can’t use the grocery store where the owner is alive and running it as a comparable to the store in the midst of chaos since the owner passed.

In probate, the business often stops upon owner’s death. Even if the business doesn’t stop, the quality of the business tends to head downhill. People usually notice when the business isn’t run by the owner anymore. It’s kind of like an “inmates running the asylum” type of situation… Not great for business, and therefore not great for the valuation of the business.

Buyers typically want to step into a seamless, ongoing operation. With a probate business, the buyer is not purchasing an ongoing business, but rather has to re-jumpstart a business that may have been temporarily closed for months. The buyer can’t walk into the restaurant and be open for business the next day with the menu ready to go.

No keyman

No key man

Without a keyman, the business doesn’t work. The keyman is so crucial to a business that you can buy “keyman insurance” in case he passes away. When a small business loses its keyman, it loses a lot.

First, there is no transfer of knowledge. If you buy a business from a living owner/operator, he can tell you the tips and tricks of the business. These tips are unlikely documented anywhere, just things that the owner knows.

Second, there are no relationships with customers. Without the owner, maybe some of the best customers don’t come anymore. There are no relationships with vendors who give the business a good deal. They may want to reset their prices and not give the new owner a grandfathered-in deal. Additionally, if the owner/operator doesn’t own the property, the quality of the relationship with the landlord is huge for determining the value of the business. Without a lease, there is no business. Also, since the landlord doesn’t know the new owner, he may want to renegotiate the lease.

Lastly, the keyman is important because valuation is sometimes based on discretionary income (the amount of income the business throws off). Small businesses don’t necessarily report on paper all that they earn. How can the seller convey to the buyer what the business is actually worth – the real income? That conversation between seller and buyer often happens when no brokers or lawyers are present. If the owner passed away, there is no side discussion of actual discretionary income. Without that conversation, is almost impossible to value the business based on discretionary income.

Rapidly declining value

Rapidly declining value

In probate, a non-operational business rapidly declines in value.

First, inventory may be expiring and rotting with every passing day. This is assuming that in the absence of the owner, the business ceases to function or functions poorly.

If the business closes for a couple weeks or months, that may not feel like a long time to an heir who has never run a business. But that is enough time for its most loyal customers to find a new favorite store. Not only that, but closed businesses attract theft and vandalism. A closed business is an easy target for a crime of opportunity.

Lastly, even while the business is non-operational, it is still bleeding expenses (rent, security, taxes, utilities) while no revenue is coming in.

For those reasons, the faster you sell in probate, the better in order to keep the value from falling farther. The longer the business sits, the more money it loses. We have experience in this area and have seen these scenarios first-hand.

If you want to learn more about how probate works, please check out my book, “How Probate Works,” available on Amazon. If you are dealing with a situation like this, please feel free to reach out to me.

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E265 Late Probate 40 Years After Death

E265 Late Probate 40 Years After Death


What happens during a late probate, meaning you don’t begin the probate process until many years after death? In a recent case, we probated an estate 40 years after death. This case study shows just a few problems with late probate.

Creditors get impatient

Creditors get impatient

Creditors are usually patient, and they understand that when someone first passes, they won’t get the decedent’s money immediately. Once the creditors know that the estate is opened and the attorney is involved, they sit tight for a bit.

BUT, if it’s been a decade – or four in this case – they understandably get impatient. Creditors need someone to sue to get their money; they can’t sue a dead person. If no one is appointed as executor, then there is no one to drag into court. Eventually, if the heirs don’t probate, then creditors will ask the court to appoint someone (usually the Public Administrator, a court-appointed stranger) to be executor/administrator. The creditors aren’t going to request that an heir be appointed; it will be a court-appointed person who has no relationship to the estate.

Multi-generational probates

If you wait decades to probate, then you will likely end up with multi-generational probate. As time lapses, more people will pass away.

Multi-generational probates

For example, granddad passed away 40 years ago, and no one probated his estate. Eventually, his kids and grandkids will pass away too. Granddad died in 1970 and was survived by five sons at the time. Since then, two of the sons and even some grandsons have passed away.

In this situation, courts will usually require you probate in reverse: starting with the grandsons’ estates, then the sons’, then you will be allowed to probate granddad’s estate. Why? Granddad’s estate requires someone to represent the interest of his five sons. But, if two sons died, there is no one to represent those sons. Someone needs to be appointed for the deceased sons’ estates. But, if those sons had sons (grandsons of the granddad) who passed away, then you can’t set up the two sons’ estates until you set up the grandsons’ estates.

That’s why you have to work backwards: you set up the grandsons’ estates, which allows you to set up the sons’ estates, which allows you to set up granddad’s estate. If this all sounds like a mess – it is.

We get calls from grandkids who haven’t probated; they just keep living in the grandparent’s home after his passing. But now the grandkids want to sell the home and they don’t realize the amount of work ahead of them. A lot can happen in 40 years. In this case, it took a week’s worth of emails and phone calls just to figure out who is who in the family tree.

Tenants get too comfy and won’t leave

If tenants stay in the decedent’s property even for a year, they get very comfortable living there. They are used to staying in the house without rent increases and act as if it is their own place. The tenants generally do not want to leave. This is true of both family members of the decedent and also unrelated tenants.

Tenants get too comfy and won’t leave

If the tenants act like this after a year or two, imagine if the tenants have stayed in the house for decades. Because they have been maintaining the home for decades, they get upset when an executor comes in and tells them that they have to pay more rent or leave.

We’ve highlighted three of the problems that can happen if an estate is probated late, especially after 40 years. These are problems that can be fixed but be ready to have a lot of patience through the process.

If you want to learn more about how probate works, check out my book on Amazon, “How Probate Works.”

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E261 How to Close on Sale of Business in Probate

E261 How to Close on Sale of Business in Probate


Hurray, you’re finally in contract and ready to close on the sale of the estate’s business. You already did all the hard work preparing to sell the business, now make sure you cross the finish line and close the sale properly.

Maintain status quo until sold

Maintain status quo until sold

Make sure you maintain your insurance payments. In the rare chance that there is a slip and fall accident between the time your insurance lapses and the closing occurs, it will be your problem.

Maintain your security plan, whether it’s an alarm system or driving by to check on the place. We have had an attempted burglary in one of our situations. It’s like the burglars have a sixth sense that the owner passed away and that the building is not well-attended. They notice that there are no cars or customers coming and going from the business.

Keep up to date with all of the business vendors. If the business is not operational, let the vendors know not to come by anymore. You don’t want boxes of inventory stacked up, just like you don’t want piles of mail stacked up outside of a decedent’s home. It’s pretty obvious that the place is vacant if no one takes the items inside.

Allow buyer’s final inspections

Allow buyer’s final inspections

Make sure that the lease is transferable. The buyer may need to have an introduction with the landlord to make sure they get along and agree on new terms.

Even if you provide a fully audited inventory of the estate assets, sometimes buyers want to do their own inventory. Cash registers, coolers, machinery, the condition of the parking lot – the buyer will want to see these for himself. Sometimes you can’t capture the condition of these types of things in a report or photographs.

Transfer all paperwork

Transfer all paperwork

While most of the paperwork happens at closing, some paperwork needs to be put in motion ahead of time. For example, making sure that the buyer can take over the lease from the landlord.

There may be a whole bureaucratic process to make sure the buyer gets the necessary licenses and permits to operate the business. Maybe it’s a permit to have a cafe on the sidewalk in front of the restaurant or obtaining a liquor license.

Think you’re done? Not quite. Even if you’ve sold and liquidated the business assets, you probably still need to wind down or dissolve the corporation and business bank accounts. You probably did the sale in the form of an asset sale (meaning, the buyer bought the stuff), and not a sale of the corporate stock. The estate is now left with an empty corporate entity. Dissolving the corporation involves getting certain tax clearances, notifying the Department of State, emptying business accounts, and notifying the IRS with a corporate tax return.

It’s a long process, but it has to be done.  We’ll cover this in a future episode, but please comment below if you have questions or comments in the meantime.

If you want to learn more about how probate works, check out my book on Amazon, “How Probate Works.”

Request your free consultation

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