On Jul 2, 7:38 am, Stuart Bronstein <spamt...@lexregia.com> wrote:
> Mike Jacobs <mjacobs...@gmail.com> wrote:
> >> > Once you get appointed by the Court as executor ... you
> >> > will have control over all those assets and can use them to
> >> > manage the estate and pay such expenses
* * *
> In California, where OP is located, no personal representative has
> any powers until appointed by a judge, normally at least 30 days
> after filing for probate.
OK, thanks for the input from a CA lawyer, Stu. I'm assuming that after the appointment of executor by the court takes place, the executor then can do whatever he needs to do re: paying bills without waiting for further court approval. A 30-day wait to begin paying bills should cover most situations anyway.
> In unusual cases when a need is demonstrated, a special administrator
> can be temporarily appointed right away to take care of things that
> need to be done before the hearing for appointment of the personal
> representative can take place. It is often the same person, but need
> not be.
I'm glad to see there is an available mechanism in CA to get bills paid right away in those rare situations where 30 days is too long.
> > Why, in your case, is there supposed to be an actual court
> > hearing? Is there some contested issue?
>
> In California all petitions for probate involve a scheduled hearing.
> If there are no objections filed the order is preapproved and no
> appearance is necessary. But that only happens the day before the
> scheduled hearing date.
Now that makes more sense. They schedule the hearing to hold a space open on the court's busy docket, just in case, but it is cancelled if no one has raised a timely objection that would require resolution by means of a hearing.
> > I can't imagine why you would need to attend a court hearing at all
> > during the probate process if this is a simple administrative
> > probate with no disagreements among heirs and no unusual issues.
>
> So you'd think. But there several times hearings are required to be
> scheduled. Again if there is no dispute no appearance may be
> necessary. But it has to be scheduled and the opportunity to object
> must be given.
While yielding to Stu's superior knowledge of CA procedure, it sounds like the end result is the same: if there are no objections raised, and no unusual issues, the probate process goes forward to a conclusion with few, if any, actual hearings taking place, and it can all be done by mail and telephone.
> > Would you care to tell me what other options you believe they
> > have, if in fact the court has disallowed any such payment until
> > after a hearing over 2 months away?
>
> From the time notice of probate is given, creditors have four months
> to present claims. If they don't, they are precluded. If they do,
> the personal representative decides to pay them or not.
So far, sounds reasonable, and just like MD, except here the creditors have 6 months to present a claim after the public "notice to all creditors" is placed in the newspaper.
Am I right in continuing to assume that, beginning immediately after the court appointment of an executor, the executor has full power to accept an undisputed creditor's claim and pay those bills from estate funds? And that there is no requirement for the creditor to wait until after the deadline for all creditors to have announced their presence? That is the day before the scheduled 4-month hearing, if I understand Stu right, which I believe OP said was only 70 days away now in his case, meaning he is already past the appointment stage and in fact already holds the powers of executor.
I can understand the law wanting to protect not-yet-announced creditors from having the estate be depleted to the point where there is not enough left to pay them all, in which case the early-announced creditors would get a windfall of 100% payment while the later ones would have to accept partial payment, or go thru the unwieldy process of forcing the early creditors to disgorge their preferences, if that option is even available, or sue the executor directly for breach of his legal duty to protect creditors. But what if there are plenty of assets in the estate to assure payment of all anticipated creditors, and small things like utility bills, etc. come up that can be easily paid, but which may raise annoying problems such as utility cutoff if not paid promptly?
> If not, the
> creditor has the right to sue. All that takes time. And generally
> no distributions are allowed until all creditor issues are resolved.
Is payment of an undisputed, early-announced creditor considered a distribution in CA? Here in MD, we use that word only to refer to payments from the estate to its legatees and residual beneficiaries, not to creditors. Of course, it is within the executor's discretion to withhold payment for a time, if he thinks there may not be enough funds left in the estate to continue paying all creditors, after making the contemplated payment. If it is a close call, that is if the bill is for an amount that would take a significant chunk out of the estate, as opposed to pocket change relatively speaking, the better part of discretion would seem to be to err on the side of caution and withhold payment, to avoid the risk of the executor being held personally liable, both here and (I imagine) in CA.
> > [If there is no cash available in the estate to pay mortgage bills]
> > Your only other option AFAICS is to sell the house, using your
> > powers as executor, the sooner the better, and distribute the cash
> > to the heirs after paying off the decedent's debts from the
> > proceeds. Do you have some basis to think the heirs would prefer
> > to each be a part- owner of one house, and each be responsible for
> > the ongoing mortgage, or would they rather each have cash they
> > could use as a down payment on their own house or anything else
> > they want? You are not obligated to, but it would IMO be a good
> > idea to consider the heirs' wishes in that regard.
>
> In my experience it's generally better to sell the real estate. If
> one or more of the heirs wants to buy it, great. But don't put them
> into a position where they are unwilling partners. It can cause lots
> of trouble.
Agreed 100%, in case I wasn't clear enough on that point. OP should definitely take the desires of the heirs into account and not force them into being unwilling partners, a situation where one of them would eventually be likely to need to go to court to seek partition of the property in a separate suit anyway.
> >> If someone with several advanced degrees and
> >> some academic legal training cannot do this, our legal system has
> >> been taken from us. That would imply that our legal system is
> >> truly in a sad, sad state. Our legal system should serve the
> >> people, not attorneys.
In addition to my previous reply to the OP Mr. Gary's concerns, another thought occurs to me. The law is, indeed, occasionally quite unwieldy. But it is so, not because lawyers want to arrogate to themselves a secure priesthood for interpreting esoteric scriptures in rituals where lay people dare not tread; it is because the lawyers (who, mostly, are the ones who write the law) are concerned with protecting the interests of their clients, and "the people" they represent do indeed have diverse, often conflicting interests in any matter.
There are at least 2 sides to any dispute, and believe me, it is the clients, not the lawyers, who usually make it that way. As many here have noted, the cumbersome steps of probate (CA being a bit more convoluted than some) are designed to protect creditors, even more than to ensure fair distriibution among heirs.
How fair would it be if all debts effectively abated at death of the debtor -- which would happen if an executor could just transfer all the decedent's assets to her heirs easily while ignoring creditors? Great, you say? But if that happened routinely, the modern credit system -- together with the affluent commercial life it makes possible -- would completely dry up, and we'd be right back to a medieval system of guilds and small craftsmen and individual merchants, such as existed before that great legal invention, the Corporation, came into existence (with, IIRC, the "East India Company" as its first great example). That legal revolution is in fact what made possible the industrial revolution, involving enterprises too large for one man or a small group to take on.
If the law is sometimes unwieldy, maybe that's because it's not a good idea for it to be wielded too easily, by anybody, at the expense of other interested parties. Think on that.
--
This posting is for discussion purposes, not professional advice.
Anything you post on this Newsgroup is public information.
I am not your lawyer, and you are not my client in any specific legal matter.
For confidential professional advice, consult your own lawyer in a private communication.
Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
10440 Little Patuxent Pkwy #300
Columbia, MD 21044
(tel) 410-740-5685 (fax) 410-740-4300
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