Mom Always Said I d Get the House. Post-Death Real Estate Issues. Deputy Register in Probate Jeaneen Mardak Attorney Amy Wochos

Transcription

1 Mom Always Said I d Get the House. Post-Death Real Estate Issues Deputy Register in Probate Jeaneen Mardak Attorney Amy Wochos

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3 Why is this an issue? Not enough pre-death estate planning Lack of understanding about post-death asset transfers House is often what the heir(s) care about, but can t focus on that to exclusion of other debts/assets

4 Register in Probate Role vs. Clinic Role Register in Probate Office Can explain summary and informal procedures. Can provide, explain, and review forms for summary and informal actions. Cannot strategize the best procedure for the situation. Cannot help determine if a starting a probate is advisable. Cannot help with contested issues, transferring assets or dealing with creditors. Clinic Role Can determine whether client has appropriate documents/information to make informed decisions. Can assist with determination of whether pursuing probate is advisable and, if so, which procedure is best. Can help with strategies and referrals for contested issues, asset transfers and creditors.

5 Documents you need to help client Current deed Will, if any Value of the real estate (from tax bill or appraisal) As much information about other assets and debts as possible Start with a Proof of Heirship (wicourts.gov, form number PR- 1806)

6 Defining terms Joint tenancy - two or more persons have equal, undivided rights to the property, with right of survivorship. Tenancy in common two or more person have defined and separately transferable interest in a property. Probate assets - Solely owned assets or partial interest in assets of the decedent. Assets with a beneficiary or a transfer on death designation are generally not probate assets unless the beneficiary/designee is deceased or is the estate itself. Beneficiaries All persons designated in a will to receive an interest in property (Wis. Stats ) Heirs All persons entitled to take under laws of intestacy (Wis. Stats )(see proof of heirship form and Chap. 990 chart) Interested parties Both those beneficiaries designated in a will (or of a trust created by a will) AND those who would take under intestacy if there were no will, plus anyone named as a personal beneficiary in the will. (Wis. Stats ) Estate Recovery The Wisconsin Medicaid Estate Recovery Program seeks repayment for certain long-term care services paid for by Medicaid and BadgerCare Plus on behalf of members and all services received by the Wisconsin Chronic Disease Program (WCDP) members.

7 10 Questions to Ask Every Client What is the value of all of the assets owned by mom? How are the assets owned (jointly, tenants in common, or solely)? What are mom s debts/is there a mortgage? Did mom receive public benefits? Did mom leave a will (and do you have the original will)? How does the petitioner have standing (heir/beneficiary/named PR)? Who are the interested persons and are any of the interested persons unknown or whereabouts unknown? Are all interested persons willing to sign a waiver and consent? Is the proposed PR bondable? Does the proposed PR live in Wisconsin?

8 Hypotheticals All will start with Mom dies.

9 Mom dies. Spouse is alive and on the deed as a joint tenant. Can be joint tenant either explicitly or because they were married at the time that they bought the property. Non-court form for transfer HT-110 (available on Wisconsin Register of Deeds Association website). Filed in the Register of Deeds office along with: ertr receipt (use exemption 11)[Note: Milwaukee Law Library helps with these by appointment] Death certificate Copy of deed establishing joint tenancy $30 recording fee Additional action only necessary if there are other probate assets.

10 Mom dies. Spouse is alive, but not on deed. All probate assets are $50,000 or less, net value. This is net value of estate (value minus liens). Probate procedure Summary Settlement Forms on Can be assisted by Deputy Register Maximum of one hearing (sometimes none) Is an allowance, so no notice to creditors other than Estate Recovery.

11 Mom dies. Children (or others) are on the deed as joint tenant(s). If not a spouse, then joint tenancy must be explicitly stated on deed. If not, then only Mom s share of the property can be transferred and should be done by a probate procedure. Non-court form for transfer HT-110 (available on Wisconsin Register of Deeds Association website).. Filed in the Register of Deeds office along with: ertr receipt (use exemption 11)[Note: Milwaukee Law Library helps with these by appointment] Death certificate Copy of deed establishing joint tenancy $30 recording fee Additional action only necessary if there are other probate assets.

12 Mom dies and solely owns the house (or interest therein). All probate assets are $50,000 or under, gross value. The law allows for use of non-probate court form Transfer By Affidavit (PR-1831). BUT

13 Why we don t like the Transfer By Affidavit for real estate Affidavit only allows transfer to one person. Does not allow real estate or vehicle ownership to be transferred to multiple heirs. No court order or signed agreement as to distribution. Any interested person can come back later, open an estate, and ask for a judicial determination as to whether the asset transfers and/or distributions were proper. Also no notice to or court review of payments to creditors, whose liens are not extinguished through this transfer (particularly the mortgage company). Similarly, with regard to real estate, the affidavit is recorded with the current deed to show change in ownership. At least in Milwaukee County, the Register of Deeds will take as many affidavits as are filed. A formal probate would then be required to determine who the proper owner is.

14 However, if you re going to recommend its usage $50,000 is GROSS, not net. Only an heir can use it. Notice must be given to Estate Recovery if decedent or spouse received any of the listed benefits (procedure on page 3 of the form). Form is NOT filed with probate court. For real estate transfer, is filed with the Register of Deeds along with: ertr receipt (use exemption 11) $30 filing fee Person using the form is responsible for making sure creditors are paid and asset(s) distributed to beneficiaries (if there is a will) or heirs (if there is not a will).

15 The remainder of the hypotheticals will require informal or formal probate.

16 Informal v. formal probate Informal, as its name suggests, has limited overview by the court. Court officials admit will (if any) to probate, swear out a proof of heirship, and issue domicilliary letters. There is then a final review of paperwork at end of process. Informal can be done without a lawyer (or with one) and is the preferred process, where applicable. If there are contested issues, the case will move to formal probate. Therefore, if your client knows that there will be a contest, the formal process should probably be used at the outset. Formal probate proceedings require, by statute, that an attorney must represent the personal representative. Wis. Stats So formal = attorney and referral to Lawyer Referral Services is appropriate. There is rarely pro bono probate assistance. However, if your client is 60 or over (and you think they have a good case), can do referral to Legal Action s Elder Law project. For informal, there is the Personal Representative s Guide to Informal Probate in Wisconsin (google it) step by step guide designed for the non-lawyer. Too big to print in the clinics. Even less pro bono help in this area, but could try Legal Action referral for client 60 or over. The Register in Probate office can also provide basic forms help with informal ONLY, but cannot help with any of the steps once domicilliary letters issued (e.g., dealing with creditors, transferring the property, etc.).

17 General probate issues Is there a will? Is it the original will or a copy? Are all heirs and beneficiaries (and there whereabouts) known? Will the parties sign waivers or will there need to be a hearing on notice (publication and mailing)? Will a bond be required and, if so, for how much? Will a Guardian ad Litem be required (minors, incompetent persons, unknown heirs) or an attorney be required (persons on active duty)?

18 Mom died and There is an original will All heirs & beneficiaries and their whereabouts are known All heirs & beneficiaries will sign a waiver PR named in will consents to act PR lives in Wisconsin Mom did not have mortgage or debts INFORMAL PROBATE ON WAIVER If PR does not live in Wisconsin, then PR must obtain a bond.

19 Mom died and There is an original will All heirs & beneficiaries and their whereabouts are know All heirs & beneficiaries will sign a waiver PR named in will consents to act PR lives in Wisconsin Mom did not have mortgage or debts INFORMAL PROBATE ON WAIVER WITH DECLINATION TO ACT SIGNED BY 1 ST PR (unless deceased). If no alternate named or alternate declines to act: If all agree on a PR, then INFORMAL PROBATE ON WAIVER. If not, then FORMAL PROBATE.

20 Mom died and There is an original will All heirs & beneficiaries and their whereabouts are known All heirs & beneficiaries will sign a waiver PR named in will consents to act PR lives in Wisconsin Mom did not have mortgage or debts INFORMAL PROBATE ON NOTICE

21 Mom died and There is an original will All heirs & beneficiaries and their whereabouts are known PR named in will consents to act PR lives in Wisconsin Mom did not have mortgage or debts INFORMAL PROBATE ON NOTICE WITH GUARDIAN AD LITEM FOR UNKNOWN HEIRS/BENEFICIARIES GAL is paid out of estate proceeds. There is NO waiver of GAL fees in probate cases.

22 Mom died and There is an original will All heirs & beneficiaries and their whereabouts are known All heirs & beneficiaries will sign a waiver PR named in will consents to act PR lives in Wisconsin Mom did not have mortgage or debts IF THERE IS ONLY A COPY OF A WILL TWO CHOICES: 1. Formal probate to admit copy of will 2. Informal on waiver, agreeing that there is no original will

23 Mom died and No will All heirs and their whereabouts are known All heirs will sign a waiver Heirs agree on a PR, who consents to act (can be an attorney) PR lives in Wisconsin PR can obtain bond (no will=bond) Mom did not have mortgage or debts INFORMAL PROBATE ON WAIVER Note: In Milwaukee, bond can be minimum $10,000 if heirs agree (by writing into waiver) that I pledge my shares as excess surety. This may vary by county. If heirs unwilling to pledge shares, then bond must be for full amount of estate.

24 Mom dies and No will All heirs and their whereabouts are known All heirs will sign a waiver Heirs agree on a PR who consents to act (can be an attorney) PR lives in Wisconsin PR can obtain bond (no will=bond) Mom did not have mortgage or debts FORMAL PROBATE WITH GAL FOR UNKNOWN HEIRS

25 Mom dies and No will All heirs and their whereabouts are known All heirs will sign a waiver PR lives in Wisconsin PR can obtain bond (no will=bond) Mom did not have mortgage or debts FORMAL PROBATE

26 The most common situation Mom dies and: Only asset is house with a mortgage (no cash assets) House valued at $50,000 or greater Mom received Medicaid or Family Care Mom had multiple debts Mom had end of life medical expenses Or any combination of the above

27 STRATEGIZE WITH YOUR CLIENT!! Keeping the house may not be an option, but what are the goals: What if family is able to pay debts? If goal is to keep the house and they can pay all the debts, they can voluntarily take on that responsibility. What if it is a deficit estate? Explain problems with probating a deficit estate. Also, will need to close through formal probate, so will need an attorney. If just want to maximize time in the house if mortgage and taxes being paid, may have extra time special administration to assume mortgage but receive no interest in the property. Can the heirs do nothing? Yes. There is no duty to file a probate action.

28 THANK YOU FOR VOLUNTEERING WITH THE MVLC!!!!!!!