I was first introduced to the court proceeding called "probate" as a result of a frantic call I received soon after I began practicing law. The caller, a real estate agent, was handling an escrow and found that the sale couldn't be completed because the seller (his client) didn't have title to the property. Unfortunately, the property in question was still in the name of the seller's mother who had died several years earlier. Because the seller didn't have title, the escrow couldn't be completed, the real estate agent lost his commission, and the matter had to be taken to court before any further action could be taken with respect to the property.
Many people who have inherited real estate are surprised to learn that they must go through probate in order to legally transfer the property into their name. They usually learn of their need for probate only after they have decided to sell the property or borrow against it. When they find out that the average probate takes 15 months to complete, they are disappointed that their plans have to be put on hold. Then, when they find out what probate costs, they are shocked. For the average home in Los Angeles County, now valued at $350,000, probate costs can exceed $25,000!
Even those that are aware that they must go through probate put it off for various reasons -- primarily the cost, time, and/or "hassle" involved in a court proceeding. However, procrastination can lead to unforeseen problems down the road. For example, a person who inherits a piece of property might think that the property is worth a certain amount and has made big plans for the future based on the anticipated inheritance. However, the individual may not be aware of creditors or other heirs that have a legitimate claim to the property until their claim is revealed through the probate process. In one case I know about, a person was sharing in the rental income from the property for years, but when the probate was completed it revealed that the person sharing in the rental income had no legal claim to the property at all.
When probate procrastination goes on for years, it becomes a huge problem to sort out the various interests in the property. Many of us have heard of instances where a family inherited property "down South" a long time ago, never went through probate and now there are so many relatives involved that it seems hopeless and not worth any one person's time and effort to get the title issues resolved.
Of course the best solution to probate problems is to avoid probate altogether through a living trust. A forward-thinking property owner would do well to save his or her heirs the time, expense and "hassle" of probate. If, on the other hand, you are that unfortunate heir who is faced with probate, it is best do it sooner rather than later.
© 2013 by Marlene S. Cooper. All rights reserved.