Probate & Joint Tenancy

Dear Len & Rosie,

My grandmother died almost a year ago and willed each of her grandchildren and great grandchildren $500. My aunt and uncle were on the title of the house along with my grandmother. They were also named executors of the estate. All the grandkids are wanting their inheritance and are being told that there is no money. The house was just rented this month and will be bringing in monthly income.

Darla

Dear Darla,

Whether or not you’re ever going to see your modest inheritance depends not only on the terms of your grandmother’s will but also whether or not she actually owned anything subject to probate. Your grandmother created an estate plan, but there’s a good chance she didn’t really understand how it worked.

Your grandmother’s home, held in joint tenancy with her children, was not subject to probate and was not subject to the terms of her will. When a joint tenant dies, the surviving joint tenants own the property automatically. All your aunt and uncle had to do to clear the title was to submit your grandmother’s death certificate with an affidavit of death of joint tenant to the county recorder, together with the property tax paperwork needed to avoid a reassessment under Propositions 13 and 58.

What your grandmother did by adding your aunt and uncle to her deed was to save thousands of dollars in probate attorney fees, as well as the delays of probate. But she did this at the cost of removing her home from her estate plan. The only assets that can be used to fulfill the $500 gifts your grandmother wanted to make are assets that were titled solely in her name upon her death. Assets in a trust, joint tenancy assets, and assets with pay-on-death beneficiaries are not disposed of by your grandmother’s will.

Chances are, she didn’t have all that much besides her home. If she had more than $150,000 in her name alone, then she will have to be probated, and you would have received a notice of the petition to admit the will to probate. If she did less than $150,000 in accounts solely in her name, then these accounts could have been collected using small estate declarations under Probate Code section 13101, but these declarations should have been signed by all of the recipients of your grandmother’s will, yourself included.

If there is money out there, you could sue your aunt and uncle if you can prove that they took the estate’s money for themselves and didn’t use it all to pay off your grandmother’s debts. But it’s only $500, and if her bank accounts were also in joint tenancy there’s nothing to fight over except for the furniture. Consider this as a lesson.

Len & Rosie

List of 11

Dear Readers,

We would like to share with you something that we share with each of our trust clients. It’s really important, our clients like it, and we think that your family can benefit from it as well. You may have seen this in the column before. We print it year after year. Consider it as a gentle reminder to get yourself organized. One of the most tedious tasks in administering a trust or an estate is finding the decedent’s estate planning documents and asset information. Frequently, children or even spouses have no idea where their parents or spouse kept these important documents.

After you pass away, the last thing you should want is for your loved ones to have to search through your belongings in a morbid scavenger hunt to find your will, stock certificates, or other important papers. They shouldn’t have to lift up your mattress to look for your safe deposit box key. They shouldn’t have to waste a month waiting for new account statements to come in the mail so they can figure out where you invested your savings.

To avoid these difficulties, you should organize your personal and financial data. This is where the list comes in. Collect the information described in this list and give a copy to your children or close relatives, or keep it somewhere safe and let your family know where to find it. In case something happens to you, the List of Eleven is one of the best ways to ensure that your relatives can find all your vital records.

    The List of Eleven Plus One

1. The name of the bank where you have your safe deposit box, its number, and the location of your key.

2. The numbers for all of your insurance policies, health, life, auto, home, burial, etc., and the names and addresses of the agents for each policy.

3. A list of your stocks, bonds, mutual funds, and the name and address of your broker.

4. The names of the banks or savings and loans for each of your accounts, and the account numbers, or even copies of account statements.

5. The location of your cemetery plot or mausoleum niche.

6. The location of your will or trust and the name of your attorney.

7. Your credit card numbers.

8. Your Social Security Number.

9. The name and address of your mortgage holder, the account number, and the amount of the outstanding debt.

10. The name and address of your accountant, and where your past income tax returns are located.

11. The type of memorial or funeral service you want.

Plus One.  These days, many people receive account statements and pay their bills online, leaving no paper trail at home. It’s important for your loved ones to be able to access your email and online accounts so they can wrap things up when you are gone.

If you think this is too hard to do yourself, consider how hard it will be for your children to deal with after you pass away. Take a few minutes to get organized.

Len & Rosie