Articles Posted in Real Property

Virtually every decision regarding probate is based on title to or value of assets owned by the decedent.

Title is important because ownership can transfer as a matter of law (e.g. joint tenancy with right of survivorship, where the surviving joint tenant takes by recording an affidavit, death of joint tenant); or a bank account might be titled to a trust (e.g. John Doe and Mary Doe, trustees of the John Doe and Mary Doe 2015 Family Trust), in which case the trust controls what is in the account.  In these instances, for those assets, a probate would not be necessary.

However, where there are no joint tenancy assets, payable on death accounts, trusts or other legal means by which property transfers to another without probate, one must then look to value.

In general, if the total estate of the decedent (not counting those assets which pass because of their title as described above) is $150,000.00 or less and does not include real property, California law permits the heirs to use an affidavit procedure (Probate Code §13101) to obtain ownership of the assets.  This is very easy when the sole account of the Decedent is $149,000.00.  However, if the assets exceed $150,000.00, probate will be necessary to have those assets transferred to the decedent’s heirs.

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In other words, must there be a full-on probate in California because the real property asset (assuming a value in excess of $20,000.00, no joint tenancy or transfer on death provision in the deed) was in the decedent’s name alone when he/she died?

Likely the answer is no.  Assuming that there is a trust and for purposes of example, a surviving spouse, there will have to be a petition filed in the probate court (per Probate Code §850) to get the real property asset transferred to the trust, but that is not the same as a full-on probate.

Consider this set of facts:  Husband, in California, acquires a parcel of land while he is married and fails to have his wife’s name put on it.  In fact, let’s say that he takes title as a married man, as his sole and separate property.  He dies.  There is a family trust and if someone had thought about it, the decedent would have been counseled to place the property into the name of the trust, thus avoiding any probate proceeding.  Alas, that was not done.  Please note, I am ignoring any Family Law issues in this discussion.

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thumbnail%20inland%20empire.jpgLytton Williams Messina & Hankin LLP (the “Firm”) maintain close relationships with their clients and continue to make personalized service their number one priority. Partners Lytton Willaims and Messina were all formerly partners in the Century city law firm of Kelly Lytton & Williams. Prior to joining Kelly Lytton, Sheldon Lytton and Richard Williams, each with more than 30 years of legal experience practiced at O’Melveny & Myers and Manatt, Phelps & Phillips, respectively, and were then partners in Finely Kumble Wagner Heine Underberg & Manley, one of the largest national law firms in the United States. John Messina, head of the Firm’s Temecula Valley Office, is a licensed real estate broker and was the head of a mortgage banking firm in the San Gabriel Valley before turning to the law. Ted Hankin, an attorney and CPA, heads the Firm’s Newport Beach Office and was formerly the Division Chair of the Estates, Probate and Trust Division of Alvarado Smith APC. Henry Holguin, of Counsel to the Firm, was formerly a name partner in Miller & Holguin, and is one of California’s most noted health care attorneys; he currently serves as the general counsel of AltaMed, the largest Federally qualified Community Health Center in the United States.

The Firm’s Practice Areas Include:

1. General Business Litigation and Resolution of Disputes, including Representation of Public Agencies, and Representation of Clients before Federal, State and Local Government Agencies.

So there we have it … my client is listed on a deed with his two siblings and his mother as a joint tenants with right of survivorship (see California Civil Code §683 at http://www.leginfo.ca.gov). In such a case, the survivors are said to take title by operation of law.

The joint tenancy deed creates the rights in the property. By including a survivorship right, any other joint tenant alive when another joint tenant dies takes the deceased joint tenant’s share. In this case, there were four joint tenants. One died. Each joint tenant went from owning an undivided 25% interest in the real property to an undivided 1/3 interest in the real property.

The way the property is transferred when there has been a death is to record a document entitled “Affidavit Death of Joint Tenant”. A certified copy of the death certificate is attached to the Affidavit. Anyone can sign the Affidavit; so long as the joint tenant has really died (ergo the requirement for a certified copy of the death certificate to be recorded with the Affidavit). Upon recording, the other joint tenants own the property exclusively, no probate required by anyone (see California Probate Code §210 at http://www.leginfo.ca.gov)

As I have said previously, greed is an incredible motivating factor in creating family discord; in this Orange County case, my client’s mother disinherited him in her will (California Probate Code §88). However, she had also, years before, transferred her home into co-ownership with her three children (including my client). In this case, the form of co-ownership was as “joint tenants with right of survivorship” (California Civil Code §683). The issue was whether the will would control who took the home (along with some other issues that I will address later).

A valid will in California can take several forms; one is called a “holographic” will (California Probate Code §6111). That is a will that is handwritten by the testator (i.e. the person who’s will it is), dated and signed by that person. In such a circumstance, the normal requirement for witnesses is waived and such a will can be submitted for probate (California Probate Code §8000 ) in the Superior Court.

Another form of will is the one that an attorney might prepare for a client. It is type-written, it sets forth various declarations concerning the testator and family relationships, and it instructs the person named as the personal representative (California Probate Code §58) of the testator as to what is to be done with the testator’s property after death. To be valid, the signing of the will by the testator must be witnessed (California Probate Code §6110) by at least two disinterested witnesses (California Probate Code §6112).

Previously I told how the court determined that the single family residence owned by my client and her brother would be sold, as it could not be divided, all in accordance with California Code of Civil Procedure §872.820. How the property was sold is what I will describe in this post.

The court determined that the single family residence would be sold by a public sale (California Code of Civil Procedure §873.520). Notice of the sale was provided in accordance with California Code of Civil Procedure §873.640. The court decided that it would conduct the sale as an auction in court on a date and time specified in the notice.

The big day arrived; I was in court with no less than eight bidders who wanted to purchase the single family residence. The court ran the auction just like you would think; starting with a minimum, taking overbids, until there was only one bidder left, to whom the judge sold the property.

So here was the situation; my client and her brother owned their mother’s residence as tenants in common (California Civil Code §686). My client’s brother did not agree with the appraisal that was made of the residence and refused to buy-out my client. Since it is impractical to divide a single family residence in two, my only alternative was to bring an action for partition (California Code of Civil Procedure §872.230) against my client’s brother, requesting that the court order the sale of the real property (California Code of Civil Procedure §872.820).

I filed the lawsuit in Superior Court of Los Angeles County North East District (in Pasadena), because the residence was within that district’s boundaries. I served the summons and complaint (California Code of Civil Procedure §413.10) on my client’s brother. He responded within the thirty day time period allowed for responses to service of a summons and complaint. His responses (technically referred to as an “answer”) basically said that he did not want the residence sold, although it was my client’s right to do so.

The matter was set for hearing. I intended to call my client and the appraiser as witnesses. My client’s brother, who was representing himself, intended to call my client and provide his own testimony.

In my last post, I described how my client and her brother came to own, as tenants in common (California Civil Code §686), the single family residence of their mother. My client wanted her mother’s home to be sold; her brother did not. Pursuant to my recommendation, my client authorized me to file a complaint for partition (California Code of Civil Procedure §872.230) in Superior Court of Los Angeles County Northeast District (which is where the residence was located).

Generally speaking, when real property is owned by two people as tenants in common, each person has an undivided and equal interest in the real property. The problem arises when the only improvement on the real property is a single family residence. You cannot, as a practical matter, divide up such an improvement to the real property. What can be done is that one co-tenant can buy the other out (if they can agree on a price) or a co-tenant can seek court intervention to have the real property sold to the highest bidder (this is called “partition by sale” in accordance with California Code of Civil Procedure §872.820).

In this case, I hired an appraiser to value the single family residence; I communicated that value to the other side and suggested that my client would be willing to pay one-half of that amount to acquire her brother’s interest in the property or alternatively, my client would accept that amount for her interest. The problem was that my client’s brother did not agree with the appraisal.

Every now and then I receive calls from clients where the resolution of their problem would at first appear to be a trip to probate court, but sometimes has a twist that takes me to the world of civil litigation.

In this case, my client told me that she needed to sell her mother’s residence to pay for bills she had received for her mother’s nursing home care. No problem I said; do you have power of attorney for your mother (California Probate Code §4022) that would allow you to sell the residence? No. Is she competent (California Probate Code §812) to give you a power of attorney? No. Should we consider establishing a conservatorship (California Probate Code §1801), with you as the conservator, and then sell the property? No. Well, if the answer to all the foregoing is no, when did your mother die? She’s not dead; my mother gifted the residence to my brother and me and he does not want to sell it. Oh …..

So being much wiser now, I asked how is title to the residence held… my client said that it was held as tenants in common (California Civil Code §686) with her brother. The solution: I recommended that my client consider a partition action (a means by which co-owners of property can divide it or sell it under court supervision), that would result in the house being sold so that she would have funds for her mother’s nursing care.