What is probate? How to probate a will? We go over everything you need to know about probate. Presenter: David D. Wade Mr. Wade was admitted to the California Bar in 1999 and advises families and individuals on estate planning matters, including wills, trusts, family partnerships, probate and estate administration matters, as well as trust estate litigation. He also consults with clients on all aspects of business and transaction law, with an emphasis on representing closely held business entities, including partnerships, corporations, and limited liability companies. Mr. Wade received his Juris Doctorate from the University of the Pacific, McGeorge School of Law in 1999. He also trained in Tokyo, Japan as part of the Temple University International Law Program. While in Japan, Mr. Wade worked at a legal office where he refined his Japanese language skills and counseled foreign companies on how to establish their businesses in Japan. Prior to law school, Mr. Wade attended Brigham Young University and graduated with a Bachelor of Arts degree in International Relations and a minor in Japanese. Mr. Wade taught Business Law at Merced College from 2002 to 2007. He has also been a registered securities representative, holding a Series 7 license from 2000 to 2002. Mr. Wade has spoken to groups throughout California on the topics of estate planning and asset protection. He was also a featured panelist at the Asian American Hotel Owners national conference in Chicago, IL where he spoke on the topic of estate planning. Mr. Wade is a member of the California Bar Association. He enjoys working and living in Granite Bay, California and attending his children’s sporting events and recitals. He also enjoys fly-fishing, golf, water sports, snow sports, and travel.  Who is THE JRP GROUP Born in the middle of Central Valley, The JRP Group was founded by three young people. It was launched with a vision, a sharp objective, and a strong ardor.mSince its inception, the focus has not budged a bit. We are driven by the same passion, enthusiasm, and devotion. We pledge to expand our business in every direction by providing all types of assistance to our associates so that they can reach the zenith with utmost honesty. Www.Whyjoinjrp.com

1. The California Probate Process
and
Real Estate Sales
Presented by David Wade
WADE LAW OFFICES
www.wadelawcorp.com

2. Plan for Today
• Quick Probate overview
• How do you avoid probate
• Small Estate options (mini probates)
• Probate (focus on real estate sales)
• A few thoughts about probate leads

3. What is probate?
• Generally speaking – Court involvement
• Usually someone has died
• Usually someone didn’t plan properly
• Goal is to clear title to assets
• Different probate court options

4. Probate happens because…
• No written plan at all (oral plans and
emails don’t work)
• Wills – Simple but some type of probate
required when there is real estate
• Unfunded living trust
• Deed holes (spouses or errors)

5. Probate can be avoided
• Living Trusts
• Deeds – joint tenancy or gifts
• QPRTs and other irrevocable trusts
• Business Planning (LLC’s, FLPs and
corps)
• Beneficiary deeds (new as of 1/1/16)
• Beneficiary and POD on banks

6. Probate can be avoided
• Living trusts are important in California
• New tax laws have nothing to do with
probate
• Trusts protect at death and at disability
• Trusts are private
• Trusts are flexible

7. Beneficiary Deeds
• Beneficiary deeds started January 1, 2016
in CA after at least 10 years of official
discussion
• Lots of uncertainty
• Title insurance problems
• Not recommended at this time

8. Small Probate options
(NOT probate real estate sales)
• Under $50,000 affidavit to transfer real
property
• Under $150,000 succession to real
property
• Spousal property petition
• Heggstad Petition – for unfunded trust
• Lost Trust
ABOVE TAKE ABOUT 6-12 WEEKS

9. Under $50k Affidavit
• Under $50k in value per probate referee
valuation
• Fractional interests in real estate
• Timeshares
• Filed with court 6 months after death
• NOT a hearing in court – just court clerk
• Affidavit recorded with county recorder

10. Under $150k Succession
• Court hearing
• $150k or less in gross value
• Probate referee valuation required
• All people entitled to receive the property
must sign the petition
• 40 days after death

11. Spousal Property Petition
• For property that is to transfer when one
spouse dies
• Community and/or separate property
• No probate referee valuation needed
• Hearing in Court
• Always first option if a surviving spouse
• Mortgage in deceased spouse’s name
• Can be problematic if step-kids

12. New Law
• Effective January 1, 2017
• CALIFORNIA CIVIL CODE 2920.7
• Allows access to mortgage company
information
• Requires two things:
– Establish death
– Establish successor in interest

13. Heggstad Petition
• Used for unfunded trust
• Intent of person is key
• Writing important for real estate
• Re-fi is a common problem

14. Lost Trust
• House is deeded in trust
• The written trust document is lost
• Prove words of trust or distribute to
probate estate

15. Full Probate
• Formal Probate is a 8 month (or more)
process
• The probate code (PC) and the Judge
create a formal process
• The PC lays out strict guidelines for
collecting assets & dealing with creditors
• Strict rules for real estate sales

16. One take away for today
If Probate real estate sale
Use Form PPA
(probate purchase agreement)

17. Full Probate
• Court procedure for:
- gathering assets
- liquidating assets (i.e. selling real estate)
- determining liabilities
- determining taxes
- confirming who should receive the money
- Then, at the end, distributing money

18. The players
• Decedent
• Personal representative
• Probate attorney
• Probate Judge
• Probate referee
• CPA
• Realtor

19. Full Probate
Court appoints a Personal Representative
(PR)
Executor = a will
Administrator = no will
Special Administrator = temporary

20. When Can you List
Real World Question:
“What day can she sign the
listing agreement?”

21. When Can You List
• Nothing can be done until letters issue
• Other than “perishable” or “depreciating”
items the Personal Representative can
take no action
• Officially can not list property for sale until
letters issue by the probate court
• Officially can’t clean or fix house
• “Special” letters possible if emergency

22. When do letters issue?
• Typically about 6-12 weeks after filing in
Court.
• Client might not want to wait.
• Probate code 8003 says “The hearing on
the petition shall be set for a day not less
than 15 nor more than 30 days after the
petition is filed.”

23. Ex Parte Petition
• Letters of Special Administration
• Seek specific powers
• Authority to clean, fix and list house
• Authority to communicate with mortgage
company
• Authority to lease rental
• Authority to run decedent’s business
• Authority to file tax returns

24. Letters?
• What are “letters” in a probate case?
• Magical piece of paper!?
• Recorded at time of sale of real estate.
• Full IAEA = GOOD for real estate sale
• Limited IAEA = Not good for sale

26. If limited IAEA
• If limited IAEA then need court
confirmation of sale
• Court confirmation takes time and is to be
avoided when possible in my opinion
• Will go through process in a few
minutes….

27. Letters issue – Then what?
• It’s a regular real estate sale except:
1)Probate listing agreement (now optional)
2)Probate sales form*
3)Less disclosures in probate sale
4)Possibility of court auction
* Most important

28. Listing agreement
• Probate listing agreement recommended
but not required
• Probate listings are limited to 90 days by
the California probate code
• Standard commissions (generally)

29. Form PPA
• Mandatory use
• Important (especially for listing agent)
• Has protections for your client
• Ask for offers on form PPA
• Ask for offers to be re-submitted
• Counter-offer with form PPA if not used

30. Form PPA

31. What can YOU do?
• Signed contract to probate attorney.
• Title company info to probate attorney.
• Keep good track of marketing efforts.
• Try to ascertain if price will be modified as
quickly as possible and tell attorney.
• Beyond that regular real estate sale.
• Get attorney final closing statement.
• Make sure son/daughter have place to go.

32. Lawyer forms
• Notice of Proposed Action (NPA)
• Petition to confirm sale (some cases)
• “Letters”
• Tax ID number
• Comfort letter to title company
• Inventory

33. Probate sale options
• Most common probate sale takes place by
the PR sending out a notice of proposed
action (NPA) (or waiver of npa).
• Other option is Court auction.

34. NPA
• Notice to all heirs/beneficiaries
• Notice to anybody who requested special
notice (creditors / interested parties)
• Basically it’s notice to everybody who
could be adversely effected by the sale
• People can consent, object or do nothing

35. NPA
Real World Question:
“My realtor would like to know the last day
that my brother can contest….”

36. NPA
• NPA gives all interested parties 15 days to
object
• If no objection then sale can go through
• If there is an objection then court auction /
confirmation required

37. NPA
Real World Question:
“The buyer wants $5,000 in repairs. Do you
need to know that?”

38. Auction - Overbids
• Court date about 6-12 weeks, or more,
after contract entered into
• If buyer hasn’t walked away from deal yet
they are entitled to notice of auction
• Interested parties are entitled to notice
• Plus publication in newspaper about sale
• Going once, going twice… SOLD!

39. Auction - Overbids
• Occasionally people overbid
• First overbid is approximately 5% above
contract price
• Listing agent gets their commission
• Overbid agent gets buyers commission
• Commissions not paid until sale completed
• Listing agent should be involved

40. Does 90% Rule Apply?
Real World Question:
“I heard the sale price has to be 90% of the
appraised price is that true?”

41. Does 90% Rule Apply?
•Sales in court must be 90% of current
appraised value by the probate referee
•Sales out of court do not require 90% rule
•Getting a new appraisal is sometimes
required in court sales (1 year from death)
•The probate referee has to do it (not a
private appraiser)

42. Self-Dealing Sales
• If the personal representative or the
attorney is buying the property then Court
confirmation is required and consents by
all interested parties.
• Realtor can not be buyer if they want a
commission (PC 10160.5)

43. Remember to…
• Document pricing work very carefully
• Document all marketing work very
carefully
• Don’t be connected to the buyer in any
way
• Use form-PPA
Your client has a fiduciary duty so you need
to be extra careful!

44. Disclosures – NOT required
• The Transfer Disclosure Statement
• The Seller’s Questionnaire
• Earthquake Booklet
• Earthquake Questionnaire
• Smoke Detector form
• Signature on the Natural Hazard
Disclosure but the report needs to be
provided

45. Disclosures - Required
• Lead Based Disclosure
• Data Base Disclosure (Megan’s Law)
• Water Heater Disclosure and strapping…
and
• anything actually known.

46. Upside Down House In Probate
Three options:
1)Let it go to bank;
2)Negotiated short sale;
3)Forced short sale (pc 10360).

47. Is probate over….
• Proceeds from sale go into “estate
account” (not to our client’s pocket.)
• Probate final hearing is always at least two
months after real estate sale closes and
often 3-4 months.

48. The rest of the story
• At end of that time a final petition is
prepared for the court
• Details everything that happened during
the probate process
• Court date 6-12 weeks later
• Write check$
• Close file

49. Probate Leads
• Maybe you want to be a probate
specialist?
• Experience is important.
• Will take substantial time investment to
become THE probate Realtor.
• Marketing to probate attorneys.

50. Marketing to probate attorneys
• Wow the probate attorney
• Network with probate attorneys
• Go to Court sometimes and learn
• Search court files (some on-line) or use
consolidator service
• Contact attorneys

51. Probate Leads

52. Probate Leads
• Probably best luck will be with out of town
attorneys and/or out of town PR’s
• Search obituaries/real estate records
• Contact PR directly
• They often want full service (estate sale,
clean out, organize paint/carpet, etc…)

53. Probate Leads
• Personalize – don’t automate
• Don’t add every single lawyer to your
email newsletter list
• “Let’s meet for coffee” email
• PR gets lots of phone calls – figure out a
way to stand out

54. Questions….
David Wade
800-835-2634
david@wadelawcorp.com
www.wadelawcorp.com