If the benefi ciary or heir does not change the ownership and passes away, his or her interest in the property must also be probated as well. What usually happens is that a husband and wife purchase a home but neglect to create a living trust to transfer ownership of their home upon death. After they pass away, one or more of their children continue to live in the house and nothing is done to legally transfer the title to the property. As long as the mortgage and property taxes are paid, this can go on for some time, maybe even two or more generations. When someone fi nally decides to sell or re-fi nance the property, he or she learns that several probates must be maintained before anything can be done with the property. A separate probate is required for each transfer. In the past I handled a case involving three probates of a single piece of property – one from my client’s great-grandmother to his grandfather; one from his grandfather to his mother; and one from his mother to him. At the time I was consulted, the property was still in the great-grandmother’s name and nothing could be done with it until all three probates were concluded.
Multiple probates of the same property can prove to be very costly. Probate costs can range from 4% to 10% of the appraised value of the property for each probate. Additionally, it can be very hard to break the cycle of multiple probates. Even if the surviving heir/benefi ciary has a living trust, he or she cannot put the inherited property in his or her trust until the title to the property has been transferred. If that heir/beneficiary passes away before the probate is fi nished, a probate of his or her interest in the property will then be required. That is the path the law dictates if the cycle isn’t broken.
The above scenario points out why I counsel people not to delay initiating probate for any property that they know will have to be probated eventually. If you know you have inherited property but have not yet changed the title to your name through probate, break the cycle. Probate the property and then put it in your trust. Wouldn’t it be a shame for your children to pay thousands of dollars to transfer title to property from your parents to you and then pay thousands more to transfer title from you to them? Having a living trust is good, but you have to have title to real estate to be able to transfer it to your trust. As I’ve often said, “don’t wait to probate”.
© 2019 by Marlene S. Cooper. All rights reserved. (Marlene S. Cooper is celebrating 40 years of practice! Her practice is focused entirely on estate planning, estate administration and probate. You may obtain further information at www.marlenecooperlaw. com, by e-mail at Marlene@ MarleneCooperLaw.com, by phone at (626) 791-7530 or toll free at (866) 702-7600. The information in this article is of a general nature and not intended as legal advice. Seek the advice of an attorney before acting or relying upon any information in this article).