Potential Issues With Property & Assets In Probate

View various issues that sometimes occur with property and assets in probate.

Some people are very organized and leave instructions to their heirs as to where their property is located and what their assets are. Other simply die and the heirs have to figure out what was owned. Most counties offer free online real estate searches by name. But, financial assets can be much harder to track down. In the most difficult case, the person who died owned dozens of different financial accounts. Typically, the best way to learn what these assets are is to collect the person's mail if possible. Sooner or later most financial accounts generate statements.

Additional Probate

It occasionally happens that a probate is done and after the probate is closed an additional bank account is discovered. Nevada requires a new probate in this situation and the value of the new probate is considered to be the value of the old probate plus the value of the newly discovered asset.

Special Administration

Sometimes the heirs know that the Decedent had a bank account at, say, Wells Fargo Bank, but that they don't know how much is in the account and can't get their hands on any bank statements. To start the probate it is necessary in many cases to know the approximate value of the estate. In such a case a Special Administrator can be appointed to have authority to demand that the bank give a statement of the account and/or to inquire of other institutions if the Decedent had an account with them and if so how much was in the account. See Special Administration.

Mom "inherited" some real estate from her Grandma because Grandma willed it to her, or because Grandma died without a will and Mom was her only heir. But, no one did a probate when Grandma died. Now, Mom dies and Children inherit. Except in this case it will be necessary to do two probates, one on Grandma and one on Mom if the property is still in Grandma's name. See Double Probates

Or, it may be much simpler to clean up title in Mom's name when probating Mom's estate. Suppose Mom owned the real estate in joint tenance with Grandma and Grandma died first. The county records show that title is jointly held by Grandma and Mom. This is very easy and not really a problem probate: Anyone can file an "Affidavit of Death" with the two death certificates of Grandma and Mom attached showing that the property automatically became 100% owned by Mom upon Grandma's death.

There might also be liens against the property that would have to be either paid off or settled or declared invalid before the estate could sell the real estate.

Another problem we have encountered is this: Bill dies. He owned some property in his own name. He also owned a piece of real estate held by a trust. But there is no living successor trustee named in the trust, or the trust document is lost. Now it will be necessary to file a separate action asking the Court to take jurisdiction of the trust and to name a new successor trustee and if necessary to make the Decedent's estate the trust beneficiary--if the trust is unclear as to who the beneficiary is.

Hidden Assets

Some people while alive try to hide their assets from creditors by illegal means. For example, a "private vault'' company offers safety deposit box rentals where the customer does not have to provide normal ID. For example, the customer might provide only an iris scan and a password. The idea is that if the customer ever got sued the customer could deny owning the safety deposit box. This would be criminal fraud if the customer was required to state his or her possession under oath after a judgment had rendered against the customer. But, some people engage in those sorts of crimes. And since the private vault company would not even have to have the customer's name in their records, the private vault company would not be able to respond to a court order inquiring about the assets of a named individual. Now, if the customer dies without having previously given another person access to the safety deposit box, you can see the problem.

Likewise some people in the hopes of avoiding creditors set up trusts in foreign countries that do not honor court orders from the United States. Hopefully, such a trust would provide for the death of the customer and a distribution of assets according to the customer's wishes. However, an American probate attorney working with a probate court in the United States will not be able to use the probate court to obtain assets if there is problem.

But more commonly, the heirs may not know what bank or financial accounts the Decedent had. Before the internet, these accounts always generated mailed paper statements. If you could get the Decedent's mail forwarded to you, sooner or later, you would learn about all of the Decedent's accounts. Now with internet banking the paper statements don't come. Sometimes heirs only learn of an account of the Decedent when a "probate researcher" contacts them hoping to earn a fee for providing the information. (How do the "probate researchers" learn about the account. They may periodically scan the unclaimed property listings of state treasurers. But it can take years between when someone dies and when their bank turns their account over the State Treasurer's unclaimed property division.)

Suppose Dad has all his money tied up in his residence and two rental homes and he is widowed and has three adult sons he wants to treat equally. Suppose all three properties are roughly equal in value. He writes a will leaving one property to each son and everything else to be divided evenly. Now suppose he sells a rental property, puts the money in his bank account, and forgets to change his will. Or suppose, unexpectedly between the time he writes the will and dies, one property doubles in value and another property declines in value. Now under the literal language of the will he is not treated his three sons equally, contrary to his intentions. My advice to avoid problems like this is that if Dad truly wants to treat his three sons equally he should simply write in his will or trust, "I give all my assets in equal shares to my three sons."

As you might expect, the mortgage company, the Homeowners Association and/or the County Tax Department expect to get paid on schedule even if the owner has died. They all have the option of foreclosing on the property if payments get too far behind. If there are only one or two heirs and they have some cash they will usually keep up these payments so that late fees don't reduce their inheritance. Often, the HOA or mortgage company will hold off on foreclosure if they see that an estate has been opened since they will expect to get paid out of escrow. However, they are not legally required to hold off on foreclosure. Sometimes it is necessary to sell the property at a cheap price to make a quick sale before foreclosure happens. These are usually cases, however, in which there was some big delay in opening the estate.

Likewise, if the real estate is in bad condition and there are one or two heirs who can afford to do so, they will usually pay to fix the property up to get the best sales price. (Realtors can usually advise which things, such as new paint, yard clean-up and de-weeding, fixing code violations, will raise the selling price more than their cost.) However, if there are 14 different heirs or a small number of heirs without the ability to do so, the property may have to be sold at a cheap price without any cosmetic work done to enhance its appeal because no one will advance the cash.

Occasionally, after someone dies, squatters break into the Decedent’s home and set-up camp there. Whether the local police will help varies from place to place. Unfortunately, in the Las Vegas area the usual response of Metro (the police force from most of the greater Las Vegas area) is: “We won’t do anything unless you get an order of eviction.” Unfortunately, this takes some time (and extra legal fees) and although it hasn’t yet happened in my practice, other probate lawyers have told me that they got one set of squatters out and as soon as that happened, a second, different set of squatters moved and that required a second eviction proceeding.

The faster we can get a probate going, the less chance of a squatter problem. During the course of 2019 the minimum time to get a probate hearing went from about 2-3 weeks to about 7 weeks. With the Independent Administration of Estates Act passed in 2011 allowing an administrator or executor to sell the property without court approval as soon as they are appointed as long as everyone who will inherit from the sale sign a consent form real estate can be put on the market as soon as they are appointed and this minimizes the time the property will be vacant.

With the consent of all who will inherit it is ideal to have a family member move into the house of the person who died ASAP. Vacant properties are more at risk than occupied properties.

Some people plan for their death and may leave a folder in a prominent place labelled "In Case of Death" listing their assets, or may describe their assets to an heir. However, other people die without doing this. How, then, are the heirs supposed to know what the assets are? Usually financial accounts generate mail so if one can get the decedent's future mailings most financial accounts may be located. County real estate records are computerized so one can usually go online and see if the decedent left real estate in any particular county. But sometimes assets aren't located until long after a person dies. If the probate has been closed, and a new asset is located there will have to be second probate.

Example Situation:
Suppose Mom dies and leaves all she has to her four adult children equally. (Or, if she dies without a will and is unmarried when she dies and only ever had four children, all of whom are adults and still alive, her estate should go equally to those four children.) Now suppose one of her assets is a timeshare and only one of the four adult children wants the timeshare: the other three adult children are glad to have their sibling take over the timeshare.

Re-Assignment
In this situation, the common thing to do under Nevada law would be have each of three children who do not want the timeshare execute under oath a "Re-Assignment" of their interest in the timeshare to the adult child who wants it. Then the Court will award the timeshare to the heir who actually wants it.

Disclaimer
But in some states a "Disclaimer" is commonly done. In such a state the three kids who don't want the timeshare would execute a "Disclaimer" saying they don't want the timeshare or they renounce their interest in the timeshare. In those states, if the three adult children disclaimed their interests all would go to the non-disclaiming child and this is what is stated as the general law of the U.S. in Page on Wills, Bowes Parkes Revision, Section 49.12, “Devolution of renounced devise or legacy”:

”If the will does not contain a general residuary clause, which is capable of passing the property in question, a legacy or devise passes as intestate property upon renunciation.

“If the will contains a general residuary clause, which, by its terms may pass the property in question, a renounced legacy or devise passes under such residuary clause, unless the will shows the testator’s intention to make some other disposition…”

Disclaimers & Nevada Law
However, in Nevada this procedure can backfire and create huge problems. Under Nevada law, N.R.S. 120.230, the disclaimed share goes not to the other heirs, but to those people who would have inherited from the disclaiming heir if the disclaiming heir had left no will and died after the decedent. These people can be referred to as the "intestate heirs of the living disclaiming heir of the decedent." Now if one or more of this group is a minor child, a real problem is created because the minor child can't give away his interest in the property and the court may not accept the minor child's parent giving away the interest.

In conclusion, in Nevada when one disclaims an inheritance that inheritance may go to the disclaimer's heirs rather than to the remaining heirs of the Decedent unless the disclaimer is written to read like a Re-assignment. This is an example of how probate law can vary from state to state. This also illustrates how a lawyer in one state can give a wrong answer if the lawyer answers a "general question about probate" involving the law of another state.

Sometimes Dad dies leaving bank accounts but also debts larger than the bank accounts and other assets. What is the result? See Creditor's Claims.

See the bottom of the Sale of Real Estate page regarding insurance coverage when the estate holds real estate.

Discounts on Nevada Uncontested Probate

We offer substantial discounts from statutory attorney fees in all Nevada uncontested probates and for uncontested California probates over $400,000.