The probate process in California

Many people know that it is wise to create an estate plan that allows your estate to avoid probate when you pass away.  But few know or understand why probate it something to be avoided. One of the ways to understand it is to take you through the process of what happens when someone passes away.

For our purposes here, imagine for a moment that it’s not you that is passing away, but rather your closest family member – except for this discussion let’s choose someone other than our spouse.  Take a quick moment to think of how difficult that would be to lose someone you love so dearly.  And now, imagine all that there is to do when someone passes away:

  1. There’s the funeral, which generally happens pretty quickly and plans are made within hours of the death.  There are decisions to be made about clothing, caskets, scheduling day and time, who will read, what will they read, will there be a gathering afterwards, will there be food, where will it come from, who will be invited…it’s overwhelming.
  2. Then there’s the will – is there one?  The life insurance, the retirement accounts, the bank accounts.  You go to the house: do you know where your loved one keeps the important documents?  Would you be tearing apart the desk, the file cabinet, the drawers?  What would you find?  How would you feel about having to search?

REMEMBER:  This is all in the first few hours and days after the death, at a time when the loss is most shocking, most raw, and most difficult to deal with.

  1. Once you find the documents – did you find them? – you have to figure out how to transfer the property, and generally – without a plan – this means the probate process, which we’ll talk about in a minute.
  2. In come the lawyers, the lawyer’s fees, the appraisers – the strangers, in your home, in your life.
  3. To transfer the property, the pay the debts, to sell the house – or even transfer it – to get access to the bank accounts…all of these things can take weeks, months and years.
  4. The probate process, which is the court procedure for transferring your property when you don’t have an estate plan or have just a will, is a long, arduous process.  It involves:
    1. Multiple court hearings and appearances, lawyers, accountants, appraisers…
    2. A timeline of 2-3-5 years…or more
    3. Cost:  A huge cost.  Probate fees and costs can take up to 8-10% of your gross estate – that’s your assets not including your debt, so if you have a house worth $300,000 and nothing else, probate fees can be up to $30,000
    4. You have – your family has – worked your entire LIFE to create and build your estate.  Why give it to lawyers and courts?

In the probate process, while the cost is a big consideration, the time is also key because you and your family need and want to move on from the death and the grief, and when the probate process continues on for years and years – and you can’t sell the house, and you can’t get access to the accounts, then it drags out the normal emotional process way beyond what is healthy.

Does this sound like something you want to go through?  Something you want to put your family through?

Now, what if I were to tell you that there is a BETTER WAY?  A way to avoid ALL of this trouble?  We’ll go through this again in the next blog post…stay tuned!

Financial issues in California divorce

Since we’re talking about California divorce this week, I thought I’d add a note on finances, since they seem to be at least one of the top reasons for divorce. Untangling your financial lives can be really tough, even out of court.  Here are some things to consider:

During divorce:

Tax implications – what are the tax implications of your filing status as you go through divorce?  What are the implications of your asset division?

Expert fees – what are your attorney/accountant/child custody evaluator/financial advisor fees going to be?

Support – there are tax implications to paying and receiving child and spousal (or family) support in California. If you just take the highest/lowest amount because funds are tight, you may be in trouble later.

But the divorce process is just the beginning.  You also have to consider the financial aspects of your post-divorce life.  You need to consider these things as soon as possible, and not wait until it’s happened.

Post-Divorce:

Cost of living adjustment – here’s still the same bills, but only one of you is paying them.

Change in auto/home/health insurance costs

Increase in “combined” costs.  Did you share a Netflix account?

Lower savings and discretionary income due to the tightened financial belt.

Loss of assets in the divorce – that retirement home may be gone.

Needing/getting new employment – what do you do if you’ve never worked?

Reduced retirement income or savings – you may have thought you were set for retirement…now what?

The theme for this week seems to be planning.  Planning is you’re thinking of divorce, and planning if you’re in the process of divorce.  Don’t let the process or anything that happens in the process to take you by surprise.  It doesn’t have to if you know what to look for and where to look. Need more help? Click here to make an online appointment.

How to prepare for divorce

Is there anyone out there anymore who doesn’t know someone who is getting divorced or thinking about it?

The first question on anyone’s mind is what will happen? The most common concerns are about money – rent, bills and health insurance – as well as children. Where will they live? How will we share custody? What are my rights?

Basically, you want to know: what do I need to know NOW so that the process is easier, smoother, and I don’t get in trouble?

Sadly, it can seem nearly impossible to find out this information. If you go to see a lawyer, he or she will spend most of the time trying to convince you to pay out thousands of dollars in a retainer. Trying to find relevant, informative, accurate and current information on the internet is like trying to sort sand on the beach.

So, what can you do? One solution is to consult with an attorney, but say up front that you only want information and do not intend to retain. That can work sometimes, but not all lawyers are equal, and the information you get can be of varied usefulness. You can research on your own – for example, Nolo Press has some GREAT resources. Be sure you stick with state-specific information, however, since state divorce laws vary widely. You can check out my FREE 7-day divorce series on how to save money when getting divorced. Or, you can try family law coaching, which is what I do.

Here are some tips to get you started:

1. Scan or copy your important documents, like tax returns, bank and credit accounts, retirement and 401K statements, mortgage statements, house and car title deeds, etc.
2. Change your powers of attorney before you file. You may also consider severing your joint tenancy.
3. Get all the most sentimental items out of your house, particularly if they are breakable and/or you have a spouse prone to angry outbursts.
4. Courts like to continue the status quo, so if you plan to make a change (go back to school, change your children’s school, start medical treatment, get braces for your children), then start that before you file for divorce.
5. Talk to a lawyer so you know your rights in your specific situation.
6. Consider getting a post office box.
7. Understand what the date of separation means so you don’t hurt yourself by filing too early or too late.
8. Prepare mentally. Deciding on getting the divorce is not the hard part. It’s only the beginning. Consider going to therapy, even if you think you don’t need it. If insurance covers it, it couldn’t hurt.

Top five excuses to avoid preparing your estate plan…

1. I don’t want to think about it. No one wants to think about getting older, becoming incapacitated, or leaving this world. We all believe that we’re going to live forever. But we’re not. In fact, we’re all going to go sometime, so denying that it’s happening at all is not going to stop it. Chances are, too, that you DO in fact think about it, and your thoughts take on the quality of worrying (if you’re not thinking about it now, believe me, you will as you get older). Worrying about it is not going to protect you and your family; only doing something – your estate plan – will stop the worry and give you peace of mind. If you’re going to be thinking about it anyway, why not just get your estate plan done?
2. I don’t have time. You might think that preparing your estate plan will take hours and hours, involve multiple meetings, and generally deprive you of family time, work time, and free time. Not so! Most of my estate plans are completed in two one-hour meetings. Yes, there are serious questions that you have to answer, but you’ve certainly already thought about most of them and they’re really not all that hard to answer anyway. All told? Two, maybe three hours total.
3. I don’t have money. If you leave your estate to probate, then your heir are not going to receive up to 10% of your gross estate, and in fact may be PAYING to transfer your property. You’ll be leaving your family tens if not hundreds of thousands of dollars LESS than if you would have had an estate plan. Why wouldn’t you spend a quarter to save $100?
4. I don’t have enough money to need an estate plan. A estate with just $600,000 (think house, life insurance and some retirement) can save nearly $100,000 by creating an estate plan over going through probate. Could you stand to save $100,000? Is your family worth it?
5. I trust my family to do what’s right. Putting the decisions in the hands of your family is more of a burden than anything else. Once something happens to you, your loved ones will be shocked and grieving (you are still shocked when someone passes, even when you’re expecting it). Allow them to grieve – allow them the time and space. Don’t add to their suffering by also making them guess what you would have wanted.

What are you waiting for?

Mediation for California divorce & family law disputes: What is it? Why is it helpful? Who needs it?

Mediation for California divorce & family law disputes: What is it? Mediation is a way for couples to resolve their family law case (divorce, custody, support, visitation, asset division) outside of court. The couple can work with or without attorneys, and they meet with a mediator (that’s me) to discuss the issues before them in their case. Depending on the case, the number of issues to resolve and the intensity of the dispute, mediation can take two to many more sessions. In most of my cases, the issues are resolved in about two meetings.

Why is it helpful? Mediation is helpful for a variety of reasons. First, it’s MUCH cheaper than each spouse hiring their own attorney. Mediation can cost from about $3,000-10,000 TOTAL while just hiring an attorney for ONE spouse can be as much as $5,000 to start. Second, couples in mediation can come to agreements that the court is not permitted to make. For example, if the couple wants to make provisions for the payment of their child’s college expenses, then they can. The court is not permitted to make sure orders. Third, mediation is private, so the couple does not have to air their dirty laundry (and finances) in public court documents. Finally, mediation is a way for couples to OWN the agreements they make. Individuals in a dispute are more likely to disobey a court order handed down by a judge (who doesn’t know you, doesn’t know your situation, and makes a decision based on a few short minutes of listening to argument) than they are an agreement they developed themselves. There’s buy-in for decisions made in mediation, which makes all the difference in the world. As a side benefit, mediators are trained in diffusing the emotions of a family law case…and court proceedings are not really known for this.

Who needs it? Anyone with a family law case who would like to preserve their finances for themselves instead of spending it all on attorneys. Also, family law litigants who want to ensure that their children are as minimally damaged by the divorce as possible.

What’s not to like about mediation?

Do-it-yourself lawyers: saving money and gaining empowerment in California divorce

A recent New York Times article starts off by saying, “America’s courts are built on a system of rules and procedures that assume that almost everyone who comes to court has a lawyer. Unfortunately, the reality is quite different…Litigants who cannot afford a lawyer, … are on their own — pro se. What’s more, they’re often on their own in cases involving life-altering situations like divorce, child custody and loss of shelter.”

THIS is why I do what I do. The vast majority of family law litigants do not have lawyers, and they need help. They need help finding out what their case is all about (what are they entitled to? How do they get there?), how to fill out documents, how to appear before the court, and how to complete their case and be successful.

The article is here: New York Times Article.

Before, attorneys were only permitted to act on an all or nothing basis. We could represent clients in every aspect, or not at all. This helps the pocketbooks of lawyers, but not clients very much. It also doesn’t help the inherent underlying conflict between attorney and client: Resolving a case informally is most often better for the client and is MUCH, MUCH less expensive than litigation. Moving forward with litigation is easier and MUCH, MUCH more lucrative for the attorney. This presents a problem for attorneys and clients that isn’t often talked about, and can lead to problems for both.

Working on an as-needed or hourly basis with family law clients, family law attorneys are able to work in perfect concert with clients, giving them precisely what they need and presenting all the available options with no attachment to any of them. Clients not only are able to save money and learn what options are best for them, they are empowered to direct their own case, and the resolution thereof. Studies indicate unanimously that litigants who actively participate in the direction and resolution of their own case are the most satisfied and happiest with the outcomes.

We are a nation in which the fairness of the process means a great deal. Representing yourself with a well-qualified coach can make the process work for anyone involved in a family law case.

Getting what you want in divorce: The case for coaching

I often say that, logistically-speaking, divorce is not especially difficult, but it’s different.  If we remove the emotional aspect and the conflict, preparing the paperwork and going through the process is not particularly complex.  But when you have a family, a career, and a life, it can be impossible to take the time to learn the ins and outs of divorce law and process. Unfortunately, too, there are too few resources available in California for individuals to work through the process on their own.

There are a great many good books on the subject, and Nolo Press (www.nolo.com) has a wonderful book, How to do your own divorce in California.  This is a great primer on the basics of California divorce.  Usually, however, every divorce, even the most amicable ones, have one or two unusual or sticky issues that do not fit into the basic divorce issues covered in this book.  What is an individual to do when he or she just wants specific advice on a specific issue?

Every county has some kind of free legal resources, generally through the courthouse.  Most often, though, these resources are not intended to help with legal advice or strategy, but rather are there to help you fill out forms. It can be frustrating to wait in line to get some advice, only to be told that advice is not offered.  Another option is to do a consultation with an attorney, but many attorneys will not give specific advice until hired. You may not need full representation for the advice you need, and – indeed – you may not have several thousand dollars to pay for the answer to (what you think is) a simple question!

The answer is family law coaching, which is a concept I created when I saw this gap in services for divorcing parties. I work with my clients in advance of even our first meeting, gathering both basic information as well as documents, history and questions that you are looking to answer.  Instead of spending our consultation time gathering information from you, I am spending this time answering your specific questions and giving you the legal advice you want and need. I met with a client over the weekend who had already seen three different divorce attorneys. Each of them wanted $2,600 or more to help him with his case.  What he wanted was advice and answers, which none of the prior attorneys had offered him.  When we met, I had already reviewed his prior custody order, his intake form, and his questions for our meeting.  We spent our time together going over the process and h0w to approach his pending motion preparation, mediation, and court hearing. I even helped him to fill out his forms during our meeting, so he left knowing the legal strategy with which to proceed, what forms to file and how, and how to be as successful as possible in his motion…all for the price of one consultation.  If you find yourself in a situation where you are looking for advice on a specific issue and can’t seem to find what you need, give me a call and we can talk to determine if I am the right person to help you.