Sunday, March 1, 2015

Probate "Complexities"

To understand things that would add complexity to probating a Will, it is useful to look at what an ideal (and easy) probate looks like.  The complicated situations occur when one or more of these simplifying factors are missing, or when some troubling variation is in play.

In an ideal situation, we have the following:

- An attorney prepared and supervised Will.
- Two witnesses have signed the Will, and also signed a Witness Affidavit.
- We have an original Will, not a photocopy.
- There are no corrections, deletions or alterations on the Will.
- The staples have not been removed.
- We know who the distributees (people who would inherit if there were no will) are, and we know where they are.  AND, even better, they will sign a Waiver.
- We have a Will that names an Executor and that person is alive, willing to serve, and doesn't have anything about them that would prevent them from serving.
- The Will doesn't do anything that would tick off an interested party.
- The terms of the Will are clear and easy to understand.
- The person's non-probate assets (i.e. - accounts with beneficiaries, life insurance policies or jointly held real estate) are distributed consistently with the apparent intention of the Will.
- There isn't a spouse  being cut out in the Will (thus triggering a right of election).
- The death certificate lists an address in the County you think it should.
- There aren't big creditor claims, or Medicaid liens, or open taxes (or years of unfiled taxes when they should have been filed)
- We know what the assets are and where they are....and nobody has been plundering them with a power of attorney.
- The person did their Will a few years ago (as opposed to a few days, or hours, before they died)

Contrary to what many people think, most Wills fit the profile above.  Things need to be done, and they can be easily done.

Of course, there are many situations where one or more of the above complexities are in play.  They can all be addressed, but they take some know-how, some expense, and some time. 

These issues are precisely the reason why I cannot answer the question "How much do you charge to probate a Will?"  I answer that question AFTER I know about the existence, and extent, of the complexities. 

Next post - How do we deal with some specific complexities?

Monday, February 16, 2015

Probate - The Non-Dirty Word

The word "probate" is often tossed around as something to be avoided.  As if the failure to avoid it were a mark of stupidity, or symbolized a lack of care or planning.

On some level if a person does extensive planning, and has ALL their assets with named beneficiaries, or if a person creates a trust (AND takes the additional step of transferring ALL their assets to the trust), probate can be avoided.

But what is actually being avoided?  Is avoiding it worth the effort?

What is probate, actually?

In New York, probate means that a Will has been recognized by the Surrogates Court as proper.  The end result is that somebody (usually the person named as Executor in the Will) receives a document from the Court called "Letters Testamentary".  That is the Executor's proof that he/she has authority to act on behalf of the Estate.

When there is a Will, in order to transfer any asset that was owned in the name of the deceased person, you need Letters Testamentary.  This applies to bank and brokerage accounts, real estate, co-op apartments, and any other assets.

If you are named as an Executor in a Will, and you have the original Will and a death certificate, can you go into a bank and close out a deceased persons account?  Nope.  The bank will tell you to come back with Letters Testamentary. What they are really saying is "get the will probated".

Probating a Will is a Surrogate's Court proceeding.  The specific facts and circumstances will determine whether it's simple (and many times it is) or complicated.

I've heard people say that many procedures were "invented by lawyers to make things complicated so lawyers can make money".  I see it quite differently, and I would summarize the need for these proceedings as follows:

"There is no end to the creativity and deviousness of some people when it comes to not doing what is proper, ethical, moral and legal.  The court proceedings are designed to protect the wishes of the person who made the Will, as well as to protect those who the decedent intended to inherit.  Related to that is sometimes it's just not clear that the "Will" in question is actually what the person wanted. The procedures are designed to make sure the people affected by the Will are notified and that they have an opportunity to be heard (if there is some issue worth hearing)" 

Since there is no way for the Court to know in advance whether a particular Will has "issues", all Wills have to follow the procedures.  That being said, VERY often you can identify the interested parties, they can all sign a "Waiver and Consent", and the Will can be admitted to probate (and Letters Testamentary issued) pretty quickly.

Does it take some legal knowledge and time and experience to probate a Will? Sure, but in friendly situations (which is often the case) the fees should not be onerous.  If they are, call a different lawyer. Can the fees become substantial if there are issues with a Will?  Certainly, but we lawyers didn't create a system to encourage that.  Personally, I'd rather earn modest fees in friendly situations, as opposed to bigger fees from dysfunctional family feud cases.  But hey, we can only play the hands we are dealt.

Probate is not a dirty word.  It's a necessary proceeding so that a Will can be carried out.  Next post, issues that can arise which may add complexity.

Tuesday, January 20, 2015

More "Little Things" That Affect Probate

The more one practices in a particular area, the more "little things" one encounters.  Some of them hardly ever happen, but surprisingly, some are quite common.  All these little things affect how the case proceeds, how much work the attorneys have to do, and how long the matter may take.  Here are just a few "little things"....

1.  Sometimes a person has a right to inherit, but before they receive their inheritance, they die.  We call these persons "post-deceased".  A post-deceased person does not lose their rights, their estate has whatever rights they would have had.  In Surrogates Court, an "estate within an Estate" is quite common.

2.  What if the post-deceased person didn't have a right to inherit, but had a right to be notified of a proceeding?  Same result as above, their estate must be notified.  Sometimes this can really delay things, as one Estate tries to get jurisdiction over another Estate.  Very frustrating.

3.  A person cannot serve as a fiduciary if they were ever convicted of a felony.  I once found out my client was a felon after I had gotten him appointed.  While I was deciding whether I was ethically obliged to report this (once I learned of it), the Court found out from someone else and revoked his appointment.  I was called in and asked about it, so I had to testify about what I knew and when.  Not pleasant, and fortunately no repercussions, but a lesson learned.  Now I always ask.  Even little old ladies, and once, an old lady admitted that she had done time in Alabama 40 years ago.  I told her I was sorry, but I could not file a probate petition for her.

4.  What if someone was a convicted felon but has a "waiver of civil disability" from a court?  I once had this situation, where my client was opposing the person being appointed.  In such a situation it is discretionary, and the Judge appointed this low life (my opinion).  Now we will end up fighting during an accounting proceeding because this person has acted quite badly.

5.  What if inheritance rights depend on establishing paternity?  I've been involved in quite a few of these.  There are statutes and developing caselaw on the the use of DNA in posthumous paternity cases.  Complicated stuff but very interesting.

The thing about probate and estate administration is, after a person dies, the money and the stuff have to go SOMEWHERE.  Figuring it all out, especially when people do not agree, takes an entire specialized court, a whole set of rules, and many lawyers who know about these things at various levels of expertise.

Most of the time things are clear, and the practice is essentially administrative. But other times, mind bending complexity comes into play.  When it does, it's nice to know a lot of little things.

Monday, December 22, 2014

10 Year End Law Practice Observations

As the year ends we often reflect on the state of our practice.  When we do this, we are really looking at three things:

- How/what have we been doing?
- Where are we now?
- Where do we want to go?

Here are 10 observations gleaned from opening my own practice right out of law school, and still going at it 32 years later: 

1.  Clients are in your office because they need help solving a problem.  Thus, by its very nature, law practice involves dealing with people who have problems (on many and various levels).  If you don't like this, things will be rough.  (Note - it took me a long time to figure this one out)

2.  To do lists are OK.  Way better is a prioritized list where item #1 gets finished.

3.  Making good referrals is a win-win-win (for you, the referred attorney, and the client).  Commit to making more excellent referrals.

4.  If you have matters where you should be billing, BILL and follow up.  Not everyone has a problem with this, but some do.  If this is you, commit to improving.

5.  If you have a list of things you SHOULD do, notice how often you say this and how you are short-changing yourself.  If you say you should have a better website, or a blog, or a practice management program, start DOING IT!!  Related to this is:  If you need help, get help.

6.  If you have cases where you know you should end your involvement, take action.

7.  Recognize that even if you made some bad decisions last year, you made a lot of good ones.  A collective pat on the back is in order.

8.  While you are waiting for you career to get going, in reality it is already happening.  

9.  Knowing that you can refine how you define (yourself) is very empowering.

10. As tough as law practice can be, when you look back and are able to say "What a long, strange trip its been", you will smile and know that it was worth it.

Happy holidays and New Year to all!!!

Saturday, November 29, 2014

Important "Little Things" That Affect Probate

When we "probate" a Will, we are having the Court recognize it as official and proper.  The Court then grants "Letters Testamentary" to the Executor, so they have authority to act.

When starting out with a probate proceeding, there are certain things to determine right off the bat.  These are important because they determines how simple or easy your proceeding is going to be.

Here are 3 important ones:

1.  Does the Executor have the ORIGINAL Will.  This is very important, and quite frequently clients come in and all they have is a copy.  Copies can be probated, but it is much harder.  When the client doesn't have the original, serious efforts must be made to locate the original.  Some of the places I suggest the clients look are:

- The decedent's papers and records.  They usually say they looked.  I suggest they look again.
- Safe deposit box.  If the decedent has one, very often the Will is in there. Getting it out after the person has died takes some legal work.
- With the drafting attorney.  I don't generally hold original Wills, but many attorneys do.  I suppose it increases their chances of getting the probate. Anyway, sometimes we have to extract the Will from the drafting attorneys, and sometimes it's a royal pain.  What if they died?  Moved?  Lost it?
- On file with the Court.  Many lawyers don't know a Will can be filed while a person is alive.  I've done this a few times, usually when I am concerned that an angry relative might get access to the decedent's Will and destroy it.
- In the possession of another family member.

2.  Did the witnesses execute a "witness affidavit"?  A will does not have to be notarized.  The legal requirement is that it be "signed in front of two witnesses". However, best practice for will execution is to have the Will signed in front of two witnesses and then have the witnesses sign an Affidavit, attesting that everything was done that needed to be done.  When this Affidavit is with the Will, you don't have to locate and contact the witnesses.  When the Will doesn't have the witness affidavit, and you want to probate, you have to find the witnesses and get them to sign an Affidavit.  What if their signature is illegible?  What if they died?  Moved? Don't remember anything?  I've encountered all of these.  Generally the problems can be solved, but it's much more work!

3.  Can we identify and locate the "distributees".  These are the people who would inherit under intestacy.  In a probate proceeding you have to get jurisdiction over them, as they are the only people with standing to contest the Will.  It's difficult when you (or the client) don't know who they are and/or where they are.  Also, sometimes these people present other problems.....dead, missing, mentally incompetent, incarcerated, questionable paternity, etc.  A drafting attorney should obtain this information, and press for it even if the Testator doesn't want to give it. This saves a ton of trouble and expense later.  When analyzing a new probate, the first and most important issue is always "what will be involved in getting jurisdiction?"

Sometimes potential probate clients ask "How much will it cost to probate a Will?" I would not offer a quote without at least inquiring about the these important "little things".

Sunday, November 23, 2014

10 Things Many Lawyers Don't Know About Surrogates Court in New York

Many lawyers deal with Surrogates Court only peripherally.  Questions about estates and Surrogates Court come up often enough that it is worth knowing the basics.  Here are 10 things worth knowing, even if you never set foot in Surrogates Court.

1.  The Surrogate Court Clerk's offices are broken down into departments:

- Probate (Wills and will contest issues)
- Administration (Appointment of fiduciary when there is no Will)
- Accounting (Issues concerning distribution of the Estate, a/k/a "fighting over the money")
- Guardianship (protection of minors, personally and financially)
- Miscellaneous (all kinds of proceedings: entering an apartment, getting into a safe deposit box, removing fiduciaries, and more)

2.  In probate cases there is a presumption that an attorney drawn and supervised will was validly executed.  In a contest the burden of proof is on an objectant claiming improper execution.  A non-attorney supervised will does not get this presumption, so the burden is on the proponent to prove proper execution.  Sometimes this is a BIG hurdle.

3.  To the extent any beneficiary in an Administration (intestacy) proceeding does not waive the requirement of the fiduciary posting a bond, the proposed fiduciary must post a bond in proportion to the beneficiaries interest.  VERY often proposed fiduciaries are not able to qualify for a bond.  

4.  If there is a delay in a probate or administration proceeding, and something important needs to be done (like selling a house or co-op), it often makes sense to obtain "preliminary letters".  It costs some money and requires a bond, but in the end it can save the Estate a lot of money.

5.  Contrary to what many clients think, death does not absolve an Estate from creditor's claims.  A fiduciary must address claims they know about or had reason to know about.  There are a lot of rules and caselaw on this, but the bottom line is fiduciaries do better when they address claims pro-actively.  There are also some claims (funeral, administration expenses, taxes) which take priority over general creditor claims.  

6.  When a proceeding is filed to open a safe deposit box to search for a Will, the box is opened in the presence of a bank officer.  The contents are inventoried, and if a Will is found it is delivered to the Court.  If a box is being opened after a fiduciary is appointed, the bank officer should not observing. The fiduciary has a right to open the box on their own.

7.  Nothing substantive can happen on a Surrogates Court proceeding until "jurisdiction is complete".  This occurs when all the interested parties have either signed a Waiver or been served.  In a probate proceeding, all parties who would have an inheriting interest under intestacy are entitled to notice.  This is true even if they are not named in the Will.

8.  Whenever an interested party can't speak for themselves (some examples are minors, disabled people, missing people, or "unknowns") the Surrogate appoints a "Guardian-ad-Litem" for them.  The Court fixes a fee for the Guardian after they file a report, and they are paid out of the Estate.  I've heard cynics question this, but in my view, this procedure is absolutely essential.  I have served as a Guardian-ad-Litem many times, and take these assignments very seriously.

9.  Estates worth under $30,000 (with or without a Will) can be handled under a simplified proceeding under Article 13 of the SCPA.  These are designed to be handled without an attorney.  Most clients can handle these on their own.  Such an appointment enables a person to collect up to $30,000.  However, they would not be able to sign a deed with this type of appointment.

10.  First cousins can inherit under intestacy, but generally they can't become fiduciaries.  In "cousin cases", the Public Administrator is the fiduciary.  These Estates ultimately become "kinship cases".  This is a fascinating specialty within Surrogates Court practice.

Sometimes Surrogates Court seems like it's own little world.  It has many unique rules and procedures.  All of these are designed to ensure fairness and prevent premature or improper distributions.  Once one gets the hang of it, it starts to make sense.  Most of the time, anyway.

Sunday, November 9, 2014

Bad is Bad

Law "jobs" may be scarce, but for the entrepreneurial, there is plenty of law business out there. The skill that separates the successes from the strugglers, is recognizing and getting GOOD business, while simultaneously knowing and avoiding BAD business.  Growing a healthy law practice starts with hearing clients' stories, and making business decisions on whether they and their story are profitable business.

Bad business is bad because....

1. The time spent on bad business takes away from two important things:  good business and personal time. You can make up for bad business with good business, but only if you expand into personal time. Very unhealthy.

2. Bad business saps your energy.  Squeaky wheels get your grease, and that is the essence of bad business.  Squeaking clients, making a noise you can’t escape and have to attend to. So you grease it, and talk to it, and e-mail and meet with it.  You travel to court for it and with it.  Still, it squeaks. You grease it enough, it starts to quiet down and move along.  Eventually, you and the squeak get to your destination, the case ends, and then you realize the third reason bad business is so bad.

3. You lost money.  All that squeaking, all that time, your time, and maybe you made $10 an hour. It happens, and if you don’t pay attention, it can happen a lot.  And, sometimes bad business gets quiet and slinks away without paying, or makes you chase the fees.  

4. Bad business produces bad karma. When you are a solo lawyer, your clients and their cases are your life (We'd all like to deny this, but it's true).  When you have cases, you always have a certain “mix”.  I realized this one day while talking to another solo.  We were having a “can you top this” of problems, commiserating in our misery, when he asked, “Why are you so down today"?  Without hesitating I answered “Bad mix right now”. He knew just what I meant and said, “Yeah, that’s a bad thing”.  Since then, we start our calls with “How’s the mix today?”

5. A bad mix, that you don't fix, makes you hate your practice. And if your practice is YOU, well, consider where that leads.

Here is my short list of bad kinds of cases, and the reasons they are bad:

a.  Residential real estate closings:  Very often these have low flat fees with no control over your time; plus clients who are generally not business people, suddenly under intense pressure.  

b.  Accident cases with minor injuries: You end up working your tail off, spending your own money, and the insurance company fights you.  Now, it is true that every so often you hit a home run with an accident case. But sometimes there are no home runs in the mix, just squeaking.  I'd also add that, relative to time spent, the most profitable cases in the history of my practice were cases I referred out (and ethically participated in the fees)!

c.  Landlord-tenant cases: Unless you do a lot of them, so it would make sense to hang around in Housing Court all day. Hanging around in Housing Court on one case is bad business.

d.  Debt collection cases: a percentage of nothing is nothing. Never forget this. Yeah, you can collect once in awhile, but on all the ones where you get nothing, you never get back your time.

e.  Purchase and sale of a small business: Unless you are really tough, and a super smart businessperson, and ruthless, and heartless. As a young attorney, you find out right away, that compared to other small business owners, you are a wimp. A nothing. You may be able to do the papers for the deal, but you don’t even know what the deals are really about. I’m not talking about corporate mergers here.  I’m talking about representing someone buying a coffee shop. These transactions are WAY more complicated and difficult than you could imagine.  

f.  Any kind of case you don't know how to do really well, and that you don't have a lot of.

There are rationales and rationalizations for taking bad business.  I have heard (and acted upon) all of them:

- I'm building a client base.
- Small fees are better than no fees.
- I'm gaining experience and contacts.
- I'm not busy with other things right now.

If you think these thoughts, and it's natural to do so, at some point you will recognize the many flaws.  Hopefully this happens sooner rather than later.  

It's easy to market for, and get, tons of bad business.  Of course, if you get enough bad business, bad becomes good, you become the specialist, and you are the bad business go-to person.  This can and does happen, and on many levels can be an excellent result of learning the lessons of bad business.
Bottom line: bad is bad, but bad can become good.  If you don't know bad when you are in it, bad is VERY bad. If you can figure out what good is right away, skip all this bad stuff, and go for good from the git-go. 

Comments are welcome!