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ToCustomer I was going to court today to file the petition…

ToCustomer I was going to court...
ToCustomer
I was going to court today to file the petition for probate when I realized that my mother's estate may be insolvent. As I mentioned before, my mom died intestate. Her house is her only asset. The house is valued at $280,000 and the mortgage is $303,000. As I stated before, she has no other assets. My sister and I are the only heirs. Here are my questions
1. Most Important: As the mortgage is the only debt, and I'm going to sell, refinance or be foreclosed on, is the estate considered insolvent? The following questions assume that my that moms' estate is insolvent:

2. Do I still file a waiver of bond even if the estate is insolvent? My sister has already signed one. Do I sign one, also?

3. If I have to sign one, how should the waiver be worded as I am the petitioner and the estate is insolvent? The example given in the book you suggested is only for an estate that's solvent.

4. In the formal probate proceedings, given that the estate is insolvent, will I have to appear in court?

5. With an insolvent estate, must I have an attorney or can I transfer title on my own? Since the house is the only asset, I can't see paying an attorney $8,600 to transfer title.

6. If I can transfer title on my own, how and when do I do it? In an earlier answer you had said that my sister has to disclaim her interest in the property. Then I would be entitled to an executor's deed in favor of myself as an individual, and I could payoff or refinance the property. If that is still the case, when would I do that? Would I have to petition the court for early distribution?

7. a. Will I have to do an accounting of the estate? b. What does that entail? c. Since the house is the only asset and my sister is disclaiming her interst in the property, will an accounting even be necessary?

8. Are there other things I'll have to do because the estate is insolvent?

9. Can I file the papers now and consult with an attorney later? If so, what do I file now?

10. What if I just don't list the creditor? It will sure make things easier. I have to refinance, sell or be foreclosed on anyway, so they will be paid in any event.
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Answered in 29 minutes by:
3/9/2012
socrateaser
socrateaser, Lawyer
Category: Real Estate Law
Satisfied Customers: 39,894
Experience: Attorney and Real Estate broker -- Retired
Verified
Um...let's cut to the chase. If the estate is insolvent, and the only asset is underwater real estate, then why are you bothering to probate it at all. If it were me, I would just shrug my shoulders, let the property foreclose and move on with my life, with happy memories of my late mother.

You also have to file a final IRS 1040 and Cal. 540 -- and an estate tax return (IRS Form 706). But, no taxes would be owed.

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!

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Customer reply replied 6 years ago
If I was the only one involved, I would have been long gone. Believe me, I don't want the hassle of it. I'm not emotionally tied to the house and I don't have any children so I'd leave in a minute, and go live with my sister until I found a place to rent (my mom and I lived together), but my mom has several pets- dogs and cats. I can't find a place to rent that would take all of them and boarding costs too much (over a $1,000/mo each for the dogs and cats). What I'm basically trying to do is buy a little time until I either get the house through probate (my father said that he would buy it or refinance it) or find a reasonably inexpensive place to put the pets. They are not going to the pound. If you have a suggestion about the pets, I'm all ears. I know that I've asked a lot of questions and you've been very patient and helpful. So I guess what it comes down to is this: If I start this probate process can I stop it (if I find a place to put the pets) and just walk away, and if I can't stop the process once I've filed the petition, can you answer what you consider to be the most important and urgent questions that I asked (I know that I asked a lot of them). Also, I didn't see a separate title line in the box where I type my questions. I'm glad that you received my questions.
If I start this probate process can I stop it (if I find a place to put the pets) and just walk away, and if I can't stop the process once I've filed the petition, can you answer what you consider to be the most important and urgent questions that I asked (I know that I asked a lot of them).

A: You can't just walk away, because as the decedent's personal representative you incur a fiduciary duty, and the court can sanction you for failing to complete the probate. Also, creditors will be looking to you to deal with the assets and debts, even if only to provide notice, so this can also leave you with some liability if you choose to do nothing.

1. Most Important: As the mortgage is the only debt, and I'm going to sell, refinance or be foreclosed on, is the estate considered insolvent? The following questions assume that my that moms' estate is insolvent:


A: It's insolvent, because there are no assets with any distributable value.

2. Do I still file a waiver of bond even if the estate is insolvent? My sister has already signed one. Do I sign one, also?


A: Yes and yes.

3. If I have to sign one, how should the waiver be worded as I am the petitioner and the estate is insolvent? The example given in the book you suggested is only for an estate that's solvent.


A: Here is a typical bond waiver: I, ..... (name of beneficiary/heir) ....., in my individual capacity as (e.g., “the sole beneficiary of the decedent's will and his/her sole heir at law”), pursuant to California Probate Code Section 8481(a)(2), waive the filing of any bond by (e.g., “myself as administrator with will annexed.”). Date; Signature

In/solvency of the estate is irrelevant.

4. In the formal probate proceedings, given that the estate is insolvent, will I have to appear in court?


A: You will have to appear, if only so that the judge knows that the personal representative has a pulse.

5. With an insolvent estate, must I have an attorney or can I transfer title on my own? Since the house is the only asset, I can't see paying an attorney $8,600 to transfer title.


A: You can execute the deed, or the final court distribution order can contain the transfer language.

6. If I can transfer title on my own, how and when do I do it? In an earlier answer you had said that my sister has to disclaim her interest in the property. Then I would be entitled to an executor's deed in favor of myself as an individual, and I could payoff or refinance the property. If that is still the case, when would I do that? Would I have to petition the court for early distribution?


A: If you're in a hurry to deal with the lender, then you would need to request an early distribution (unless you can find a lender willing to refi while the property is in probate -- and good luck with that). Otherwise, you would wait until the end of the probate.

7. a. Will I have to do an accounting of the estate? b. What does that entail? c. Since the house is the only asset and my sister is disclaiming her interest in the property, will an accounting even be necessary?


A: List of assets and debts and their fair market value.

8. Are there other things I'll have to do because the estate is insolvent?


A: Insolvent merely means that debts exceed assets. Some insolvent estate that have cash, must distribute proportionately to the creditors. Your asset has a deed of trust that completely wipes out its value to any other creditor, so there really isn't anything to apportion (and it's why, sans the pets, there is no reason to probate the estate at all).

9. Can I file the papers now and consult with an attorney later? If so, what do I file now?


A: You can always hire a lawyer later. But, if you want to start the probate then you will have to file the petition.

10. What if I just don't list the creditor? It will sure make things easier. I have to refinance, sell or be foreclosed on anyway, so they will be paid in any event.

A: Many of the required documents are signed under penalty of perjury. You don't want to "don't list the creditor."

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!


Ask Your Own Real Estate Law Question
Customer reply replied 6 years ago

Thank you for your answers. I like your sense of humor.

1. If I petition for early distribution, can I petition after I file for probate and before the hearing? or at any time during the process?

2. When I petition for early distribution, do I say that I petition the court for early disstribution to satisfy a debt by the creditor or words to that affect?

3. Where do I look to find the applicable California law to put on the Disclaimer form?

4. Since my sister hasn't yet disclaimed her interest in the property because I don't have the applicable California law, can I state in the bond waiver that I am "an heir of the decedent and an heir at law according to intestate succession and pursuant to California Probate Code Section 8481(a)(2), waive the filing of any bond by myself as administrator?"

5. I know that I have to list the creditor. Just wishful thinking on my part so that I can get through this as fast as possible.

1. If I petition for early distribution, can I petition after I file for probate and before the hearing? or at any time during the process?

 

A: Under the IAEA (independent administration), you must wait at least 2 months, and you can only get 50% of the estate value. This clearly is impractical for your circumstances, so, you can request early distribution whenever you want, because you will not be using the IAEA, even though that may have been your original intent.


2. When I petition for early distribution, do I say that I petition the court for early distribution to satisfy a debt by the creditor or words to that affect?

 

A: Whatever you think will get the court to consent (e.g., "I cannot refinance the property while title remains with the decedent.").


3. Where do I look to find the applicable California law to put on the Disclaimer form?

 

A:

PART 8. DISCLAIMER OF TESTAMENTARY AND OTHER INTERESTS CHAPTER 1. DEFINITIONS .......................................... 260-267 CHAPTER 2. GENERAL PROVISIONS ................................... 275-288 CHAPTER 3. DISCLAIMERS EFFECTIVE UNDER FEDERAL LAW ............... 295

 


4. Since my sister hasn't yet disclaimed her interest in the property because I don't have the applicable California law, can I state in the bond waiver that I am "an heir of the decedent and an heir at law according to intestate succession and pursuant to California Probate Code Section 8481(a)(2), waive the filing of any bond by myself as administrator?"

 

A: I don't see why not.


5. I know that I have to list the creditor. Just wishful thinking on my part so that I can get through this as fast as possible.

 

A: Not a question -- so no answer.

 

Hope this helps.

 

 


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!


 

socrateaser
socrateaser, Lawyer
Category: Real Estate Law
Satisfied Customers: 39,894
Experience: Attorney and Real Estate broker -- Retired
Verified
socrateaser and 87 other Real Estate Law Specialists are ready to help you
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Customer reply replied 6 years ago
Thank you. You have been very helpful.
You're welcome and good luck.
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Satisfied Customers: 39,894
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