Speaker 1: Have you seen any issues where that's come up where perhaps a probate proceeding didn't go according to law or according to a will that then affected a purchase of a property later on?

Speaker 2: Yes. So I would say for title agents, there are a few things that can go wrong or that can happen in a probate proceeding that can kind of cloud title. One that I can think of being an improper legal description in the court order itself. So a lot of times, title companies, when you have a deed, they're going to make sure that they're looking for the correct legal description in that deed because that deed or that vesting deed is what's going to transfer the title to that property. So in a probate proceeding, because a person died and they had that asset in their name, you may not have a deed that's transferring that title. Your court order, in most instances, is going to govern and control the transfer of that title. So just as it is important in a deed to make sure that legal description is properly described in that deed, same thing for the court order. Your court order needs to transfer title with that correct legal description in that court order. So if the court order is recorded with the wrong legal description, it can cause a lot of title problems. I've seen that happen before. Divorce proceedings, if someone, while they were living, I've seen situations where pursuant to a final judgment of divorce, stating that the spouses are to get certain properties and they're supposed to go and record properties or split properties in a certain way, and if they don't do so and record those documents, if one dies or if both dies, I've seen situations where divorce is in clout, title to property, because subsequent to that divorce, certain persons are trying to transfer or take possession of property and they did not have the rights, recorded rights to do so. I would also say not having the proper notice to the beneficiaries. A lot of times, some beneficiaries or heirs may or may not want anything to do with probate property, so they may just say to a personal representative, oh, I don't want that property. I don't want anything to do with it. You know, just give it to so-and-so, and so personal representatives may not notice that person properly in court documents or they may not even include them at all in a court order, you know, transferring title to the assets or proper disclaimers of interest and rights and property may not have been recorded properly in county records, such that when that final order entering or transferring those assets was recorded, it missed beneficiaries or it missed heirs, and so now title to the property is clouted because you have an heir, you know, who may have stood to gain or inherit from this property, you know, it's not accounted for. So, I would say things like that, just not noticing the proper beneficiaries, not recording proper disclaimers of interest and, you know, just not settling property properly before the probate process started or before that final order is entered.

Speaker 1: So, I want to make sure I understand. Even if someone verbally says to their lawyer or representative, I don't want that property, their name still needs to be documented in this notice that you're talking about?

Speaker 2: Yeah, they'll still need to be noticed by law, really good question. So by law, anyone who has an interest in a probate estate, whether it be heirs or heirs, which, you know, meaning somebody died without a will, then by law, you know, their heirs or their next of kin, their blood relatives, essentially, that stand to have an interest in that probate estate need to be given proper notice that the probate administration is being carried out at this time. So, the heirs need to be noticed, beneficiaries who stand to gain under a will, they all need to be noticed, and if they do not want, you know, any or all of the probate assets, then they have to file and record proper disclaimers of interest, and those disclaimers need to be recorded in the county records to properly, like, disclaim their rights under the property, such that at a later time, the personal representative can now request that the court enter an order giving the property to, you know, the remaining beneficiaries or heirs of the law. So yes, it's not sufficient for them just to say, I don't want it. They really do have to follow the proper legal steps so that, you know, persons, you know, in the future, gaining title to the property, will know that they have proper title and everyone has been noticed. Some of the common questions that I get from realtors, one that just kind of jumps out to me would be, who can sign the actual listing agreement? A lot of times, a surviving spouse or even beneficiaries usually see this with children of the decedent. They believe, you know, even if their name is not on the title, they believe that they can sign a listing agreement or just go ahead and proceed with the sale of property, and that's not the case. So my advice to realtors is usually, you know, if you're going to list a property, before you do so, before you have anyone sign the listing agreement, pull that vesting deed and just make sure that the person that is named on the title is the person that's actually signing that listing agreement. If not, then that should throw off a lot of red flags because then, you know, you may have dead persons on title, and so probate would be needed at that point, even if you are working with a surviving spouse or a beneficiary or heir that is going to stand to inherit the rights to that property and the right to sell that property in the future. And so when that happens, probate is needed, like I said, if their name is not on the title to that property. And when probate is needed, then title companies, of course, are going to want to make sure that a personal representative is appointed. The personal representative, you kind of want to think of that person as being equivalent to...the personal representative of a deceased person is kind of equivalent to the power of attorney holder for someone living. It's the person that's appointed by the court to carry out the administration of the estate. So because this person is dead, they can't enter into contracts, theoretically, and so a personal representative is going to stand in their stead and enter into these contracts, sign listing agreements, be responsible for the transfer of the property, you know, so on and so forth. So a personal representative can only be appointed by court. So even if your will lists, you know, I want my sister or I want my surviving spouse to be my personal representative, a court order is going to be needed to be entered and recorded in public and county records to appoint this person, put everyone on notice that this is the person that has been appointed to act on behalf of the estate. Once a personal representative is appointed and their issue was called letters of administration, these are kind of those letters that are almost like a power of attorney for a dead person. These letters issued by the court are what's going to give that person the authority to even enter into listing agreements or administer the estate of the decedent. So the title company is going to want to see that that personal representative is appointed, that probate estate is opened up, first of all, personal representative appointed, letters of administration are recorded, and to actually, you know, sell the property, you know, they're going to want to make sure, you know, whatever the order transferring the title and interest to, you know, certain persons, the beneficiaries, if it's going to be beneficiaries selling the property that is transferred to them, or if the personal representative is selling it, you know, through the probate estate outright without transferring first, they want to want to make sure, you know, that we see that those letters of administration are recorded, that the personal representative is signing the listing agreement, they're signing off on the contract. The realtor wants to make sure, and the title company wants to make sure that everything is done in the name of the personal representative of the estate of so on and so forth. So, you know, if I'm acting as the personal representative of the estate of John Doe, listing agreement needs to be, you know, list me as, you know, Pamela Hernandez as personal representative of the estate of John Doe as the seller, deed is going to be, you know, my name is the personal representative of the estate. So everything is done through the personal representative of the estate. So make sure the listing agreement is signed, you know, deed is transferring title from the estate to those, you know, to the buyer in that instance. There will be instances where heirs or beneficiaries of an estate will need to sign off. So title companies will create exceptions, they want to see those heirs or beneficiaries sign off with the personal representative as well.

Speaker 1: And for underwriters then, is there any sort of exceptions that they'll list in reference to probate?

Speaker 2: So for underwriters, I've seen, yeah, other than, you know, making sure that the probate estate is properly opened up and certain documents, of course, are recorded, the petition for the probate, proof that the probate, you know, the probate administration is open to in the county where the property is located. They'll want to see death certificates properly recorded, of course. That's something that's going to take place, of course, as a part of the probate process in and of itself. Where probate is not needed, but we still have a deceased person on title, there are situations where, let's say, a husband and wife took title to a property by tenancy by the entirety, such that the husband and the wife's name are both on that deed, so two person's name on the deed, you know. Upon the death of the first spouse, the property, you know, automatically the property interest vests in, you know, the surviving spouse, but you still have a dead person's name on deed. So a lot of time, you know, the surviving spouse would go to sell the property, so the exceptions that the underwriters will come back with is make sure that an affidavit of continuous marriage is filed and recorded in county records. Make sure the death certificate of the decedent is filed and recorded in county records. They'll also want to see things like a form, what's called a form DR-312, it's an affidavit that no estate tax was due for the decedent. Make sure all that's recorded for that deceased person, and that's sufficient to remove that deceased person off of the title, such that 100% of the assets and the power to transfer those assets vested within the surviving spouse. And that would be the same for even, you know, for assets or title that was held jointly with survivorship rights or with remainder rights in someone else. You want to make sure that certain death certificates are recorded for those persons that pass away. So they'll ask for requirements like that, proving, you know, that someone has passed away by the filing of certain documents in county records in the county where the property itself is located. They'll ask for court records. They'll ask for beneficiaries or heirs to sign off on certain property, or, you know, they're not signing off. Proper disclaimers of rights and interests are recorded, you know, because if they see, you know, sometimes if the title companies can catch ahead of time that property, let's say a probate took place some time ago and vested rights and heirs or beneficiaries, and certain heirs or beneficiaries are not listed, you know, they'll say, you know, we need this to be, you know, we need you to reopen this probate estate, you know, make sure proper notice or make sure that the beneficiary who is not listed has signed a disclaimer, so on and so forth. So sometimes if a probate was not previously done correctly, they'll want to make sure, you know, they see those disclaimers of interest, if any.

Speaker 1: It sounds like it can get really complicated, especially if you have a lot of heirs too. So how often, it seems like a lot of people don't think about removing a dead person from a deed, and I can understand that because it's a legality issue. A lot of people probably don't know how to like rewrite or rerecord a deed. So how often do you see when you're, you know, someone's in the middle of closing and oops, there's, you know, someone on there that is deceased and how often does that set back a closing in your experience?

Speaker 2: Whew. We're in Florida, so I would say, you know, you're looking maybe about 40% of the time. We do a lot of realtor education courses and we kind of, when we do our contract classes and we, you know, do certain courses to kind of explain these things to realtors, we usually recommend and I'm usually recommending to them, like I said before, that they pull the title to that vesting deed before and just make sure that the persons that they're working with to sell this property are actually listed on that title because then you know you have dead persons, you have dead persons on title. There are a lot of instances where you don't see that until, you know, until we're, you know, trying to close on the property. We realize that certain persons, you know, are listed on the property. Like I said, a lot of times, you know, especially when you're dealing with multiple people on title, a lot of people think, you know, one of the common things that I see is, you know, you have joint, you know, you have joint tenants or joint owners on the property but it did not list survivorship rights such that the surviving joint tenant is thinking, oh, you know, I automatically have a right of survivorship and in Florida, no, you don't. It has to specify you have a right of survivorship. So I usually see that arise when we have joint tenants on title. We get to the closing and the joint, the surviving tenant didn't say to us, hey, this person died. And so when they let us, they finally let us know, you know, because we're asking, hey, we need to see this person sign off here, we need to see this person sign off there and they're going, no, they're dead. You know, forgetting to tell the attorney of the title company that a person died can really delay the closing. So you're talking about, you know, maybe two weeks, maybe even more, you know, usually if we catch it, you know, I get that phone call, you know, from the attorneys at the closure saying, hey, you know, a probate is needed. Usually I can get a court, you know, to open up the probate estate and appoint a personal representative and get those letters of administration issued to that personal representative to allow the personal representative to now step in and sign, you know, that contract and, you know, to proceed with the sale of the property, you know, maybe in about two weeks. But depending on the property, the certain, the type of property that it is, depending on creditors, even, you know, you may be talking about a substantial delay. Usually, you know, especially here in Sarasota, I'm usually seeing when that happens. It's usually a decedent's homestead property. And so that instance, we can kind of correct that sort of issue and get the home sold ahead of time. Even where there's joint, when it's not homestead property of the decedent, you know, even when it's a certain joint property, there are ways that we can open up the probate estate maybe in about two weeks and petition the court to sell the property and we can kind of hold the proceeds of the sale in the escrow account to allow for notification of the creditors, to kind of allow for the carrying out of the probate estate outside of the home sale, allow the home, you know, to sell the home closing to proceed while the probate process proceeds. So we're talking about a two-week delay to maybe, you know, a month or so, but, you know, I'll tell you the horror stories is that, you know, we're not notified and we have joint persons on title, you know, such that a probate administration is needed, that home sale can't proceed until we, you know, get a personal representative appointed and get the authority of the court to go ahead and sell that property. And so that's usually when I'm running to the court, running to the court, you know, and asking the court to kind of expedite things. And so if we're told ahead of time, we can get that done. But another thing that people want to consider, whether it be, you know, title companies or sellers of property would be beneficiaries that have deceased. So by law, you know, even deceased persons have rights, you know, depending on how, if they were listed as beneficiaries or if they're inheriting from someone's probate estate in test state, you know, if a person died without a will, then their assets are passing in accordance with, you know, the intestate laws in Florida through their family tree or their next, the pen, their bloodline. Or, you know, if they are, if they have passed with the will, then, you know, and it's passing to someone who died before that decedent, then you're talking about a probate, you know, needing to go on. I brought up the example of one of the smaller probates that I've had to deal with being about somewhere between $10,000 and $12,000, you know, that person was listed as a beneficiary on someone else's estate, such that, you know, when they passed away, their estate, you know, ended up inheriting a very small amount, you know, which, you know, you think $10,000 or $12,000 isn't a lot of money, you know, why can't I just have this? You know, if you don't fall within certain exceptions, then, you know, even that $10,000 or $12,000 will have to go through probate to have that small asset passed to your beneficiaries. So you end up in probate. So even the estate of deceased beneficiaries have to be probated before title to property can be passed. I have a horror story that always comes to mind when I think about it. We call it heir property. So property where someone passed away a long, long time ago, and the title to that, you know, no probate ever happened. So the title to that property passed to deceased persons, you know, who died and so their their share passes to their heirs or their beneficiaries, some of which may be deceased on and so forth. So make a long story short, I have a probate case where we had to sell one property that's worth about $65,000. We had to or we're having to probate 15 probate estates, 15 probate estates in the state of Florida, just because the person that died was the parents. So the parents died and title to their property passed to their nine children, eight of which are now dead. So eight of which are dead and one is still living. So those eight, you know, beneficiaries, their interest passed to their children. So now we're talking about a pool, grandchildren pool of about 20 plus children, some of which are some 20 plus grandchildren, some of which are, you know, have passed away, some of which are still living, some which live outside of the state of Florida. So now their probate estate has to be, their estate has to be probated outside of the state of Florida and in the state of Florida. So you know, so we're having to probate about 15 probate estates inside of the state of Florida, about six probates outside of the state of Florida are being handled by other attorneys just to pass this, you know, the small interest in this property. You know, so you think of one house, you know, that's not worth a ton of money, creating a lot of problems because estates have to be probated, you know, just to pass the title. And so those are your nightmares. But there are certain things, you know, like when I go back to, and I say, everyone should take steps while they're living, you know, even with one property, there are different things or different ways that you can take title to property to make sure that it's not tied up in probate, you know, to pass the title to your loved ones in the end.

Speaker 1: Is there anything else that you would want to mention to real estate professionals regarding probate, anything that they should look out for or unique situations to try and avoid?

Speaker 2: Don't run or shy away or don't run, freak out when you're dealing with a probate situation. I would say contact your real estate and probate attorney right away just because, you know, a lot of the issues that can hold up a closing can be dealt with relatively quickly by a probate attorney. You know, even when a situation where you have multiple estates that have to be probate or, you know, if you have assets or beneficiaries that are hard to locate, you know, the quicker you notify that attorney, the better. Have your clients talk to a probate attorney. You know, sometimes probate may be needed, but sometimes it's not needed, you know, depending upon the type of asset or how the title was held, you may not need probate. So ask ahead of time. Don't be afraid to ask, of course, but just, you know, have your client do their homework ahead of time and, you know, realtors do your homework, you know, as well ahead of time. And usually, even if probate is needed, the quicker we know, the more we can guarantee or ensure, of course, that the closing will go by smoothly. There are things that we can do or petition the court and ask the court for permissions to grant the sale of this property while the probate continues. So we can do that ahead of time. It is good, but don't be afraid of the probate process, you know, just consult with the attorneys like myself, and we're glad to assist in that process.

Speaker 1: Well, thanks again for joining us. Is there any place you would suggest people to go to for more resources?

Speaker 2: Sure. So for our listeners and for our viewers, you can catch our blogs online. We do real estate and monthly estate planning and probate and tax planning blogs on berlinpadden.com. You can catch our blogs or you can feel free to email me or you can give us a call. We do have four locations. So we have one location in Venice. We have one in Sarasota and Lakewood Ranch in Tampa as well.

Speaker 1: Thank you so much.