California - Estate

[Cptranger]

My question involves estate proceedings in the state of: California

First let me say that this post might get confusing but I am going to try.

My father-in-law resides in CA and is in very poor health. The plan atm is for my wife to fly there at the end of the month to help get his affairs in order. He wants to give her power of attorney for everything. When this is done they will fly back together and he will stay close to us. The problem is she doesn't think that he will still be around at the end of the month and we have no way of going sooner. He has multiple properties in multiples states and his estate is over 20 million.

The problem comes in the fact that both him and my wife (his daughter) hate my wifes mother. My FIL has been separated from her since 1989 or so, he claims that his last girlfriend made him finalize the divorce, but we are not sure as he is kinda flakey with anything legal related. They are both adamant about her not getting anything and it is hard to decipher anything relating to disqualifying an estranged spouse. My FIL did pay her a lump sum back child support payment and she had another child with a man whom she was in a relationship with for many years. The child was born in 1998. Navigating the court web sites and background search companies is like reading Chinese greek.

I assume I must first find out if they are actually divorced or not, as that would clear up a lot of questions. But I am located in texas so just going down to the clerks office is not an option.

Also he has no will and whether or not if he did probate court will be in the future.

I guess my questions are
1. reliable way to find divorce decrees in ca?
2. ways to disqualify an estranged spouse if he passes before we can set everything in order?
3. advice on all this bullshit that dropped into my lap


Thanks
Cpt

[adjusterjack]

Not confusing at all. We see this scenario countless times on legal websites.

reliable way to find divorce decrees in ca?

Assuming he's been living in the same county since 1989 go online to that county's superior court's website and do a case search under his name. If he's lived in different counties you'll have to go county by county. If that's inconclusive, and you and your wife can't get on a plane right now, hire a private investigator first thing tomorrow and have him do the search and then go meet with your FIL and go through all his personal files and make copies of anything and everything regarding his divorce (if he got divorced), his finances, and his assets.

ways to disqualify an estranged spouse if he passes before we can set everything in order?

Sorry, after death it's too late. If he's still married, you can bet that your MIL will tie up that $20,000,000 estate in court for years to come. Lawyers will make millions. Spouse will get all of the community property and a good part of anything that is his sole and separate property.

advice on all this bullshit that dropped into my lap

That depends.

Do you and your wife want his money and property?

If yes, then you'd both better get to CA like right now, make sure he's divorced and get him to make a will or a trust. If he's still married determine his sole and separate property and get him to make a will or a trust. Be prepared to spend a lot of money on a lawyer.

If you don't want his money and property then you can just bury the old guy when he dies and abandon the estate without lifting a finger or spending a dime. Any unclaimed assets will eventually go to the state governments where the assets are located.

[Cptranger]

A couple of updates. He did in fact divorce my mil 👍.
His girlfriend that passed did everything for him, to that point he doesn’t know everything he has, hopefully all the paperwork is in his files, if it isn’t is there a way to help locate all of his assets?

While I live comfortably you can not deny the appeal of that amount of money, but it is his wish that my kids never want for anything as he hasn’t been in theirs or much of my wife’s life. He confided this to me so I am trying to help him.

I am trying to get at least my wife there sooner, would it be prudent to look into getting a lawyer on retainer in ca? I have group legal with my company as well, would this qualify even if it isn’t for me?

Thanks
Cpt

[adjusterjack]

He did in fact divorce my mil ��.

OK. Then your wife likely inherits everything even if he didn't have a will. Does she have siblings? The only hitch I can think of there is if he had properties jointly owned with his ex and didn't have her sign over her interests when they got divorced.

His girlfriend that passed did everything for him, to that point he doesn’t know everything he has, hopefully all the paperwork is in his files, if it isn’t is there a way to help locate all of his assets?

Hard to imagine that there wouldn't be files in his home regarding all his properties and accounts. If not, I hope your wife has some ideas about where the properties are located so you can do a search of the county assessors in each county for ownership information.

While I live comfortably you can not deny the appeal of that amount of money, but it is his wish that my kids never want for anything as he hasn’t been in theirs or much of my wife’s life. He confided this to me so I am trying to help him.

I am trying to get at least my wife there sooner, would it be prudent to look into getting a lawyer on retainer in ca? I have group legal with my company as well, would this qualify even if it isn’t for me?

You would have to check with your group legal plan to see if it covers dependents and just what kind of services it pays for.

Yes, I think it would be prudent to get a probate lawyer on retainer. Pick one who makes house calls and whose office is close to your FIL's home. An attorney in CA can advise you much better than I can.

You wrote that your FIL is in poor health. Is that mentally or physically? If he's no longer mentally competent there probably isn't much that can be done other than inventory all his personal papers so you know where everything is.

If he is mentally competent then your wife should get over there right away and make sure all his monetary accounts have her listed as beneficiary so the money goes straight to her without having to go through probate.

With regard to the properties one might be tempted to have him quitclaim the properties to her before death. That's a bad idea because the tax basis will be the value of the properties from back when he bought them, resulting in a humongous capital gain when the properties get sold. When properties are inherited the basis is the value at the time of death. If they are then sold the taxes are minimal.

[Taxing Matters]

With regard to the properties one might be tempted to have him quitclaim the properties to her before death. That's a bad idea because the tax basis will be the value of the properties from back when he bought them, resulting in a humongous capital gain when the properties get sold. When properties are inherited the basis is the value at the time of death. If they are then sold the taxes are minimal.

However, in this case the income tax planning for the step up in basis is not the only tax issue to worry about. If the FIL's estate is truly $20 million, it's critical to understand that this estate will owe a lot of federal estate tax. If the FIL dies this year, the maximum amount of assets (assuming he never made taxable gifts during his lifetime) that would be shielded from the estate is $11.580 million. That means a taxable estate of $8.42 million (disregarding certain estate expenses, etc). That gets taxed at 40%, or a tax of $3.37 million dollars. While he's alive he may still do some things to reduce that tax bite. If nothing else, donating some of his estate to charity in his will or in a charitable trust may be worthwhile. The money going to charity may satisfy him than seeing it to go the government instead. With the right charity the money may do a whole lot more good in the world than what the government would do with it, and it may give him a chance to create a legacy with his name attached to it as well, leaving a lasting memory of his name.

Furthermore, to the extent the FIL might want to skip his kids and give stuff to his grandkids, with an estate this large that may be a bad idea. Most people do not know that in addition to the federal estate tax there is also what is known as a generation skipping tax (GST). This tax applies when you have a large estate and give some or all of it to a generation below the next generation under you. So if you have living children and skip over them to give your estate to grandkids, the GST applies. This tax exists to ensure that people don't get around the tax that the estate of the kids would pay when they pass those assets on to the grandkids. Without the GST, that generation skip would be a powerful way to escape a layer of estate tax.

It may be worth seeing a tax attorney and estate planning here. With an estate this large, the money paid to those attorneys for some advice can result in saving a lot more in taxes and other costs than the fees paid and thus can be very worthwhile. It'll be too late once he dies to do things to reduce the tax.

[pg1067]

I assume I must first find out if they are actually divorced or not, as that would clear up a lot of questions. But I am located in texas so just going down to the clerks office is not an option.

What California counties does he currently live in and has he lived in since he became separated from your wife's mother?

Also he has no will and whether or not if he did probate court will be in the future.

How could you possibly know if he does or doesn't have a will? What about a trust? It would be fairly uncommon for a person with 8-figures worth of assets not to have done some estate planning.

reliable way to find divorce decrees in ca?
2. ways to disqualify an estranged spouse if he passes before we can set everything in order?

Sounds like these have become moot questions.

advice on all this bullshit that dropped into my lap

Not exactly sure what you're asking, but your wife should encourage her father to speak with an attorney about his estate and, when he dies, she should retain the services of a good probate lawyer.

he doesn’t know everything he has, hopefully all the paperwork is in his files, if it isn’t is there a way to help locate all of his assets?

Well...sure...there's always a way. It's just a question how difficult and costly the search will be.

would it be prudent to look into getting a lawyer on retainer in ca? I have group legal with my company as well, would this qualify even if it isn’t for me?

I'm not completely sure what you mean by "get a lawyer on retainer." Your wife certainly can hire a lawyer in advance of her father's death, but it's probably not necessary. I wouldn't imagine your group legal through work would cover something like this, but you'd know better than anyone here. That said, that would be a terrible way to handle a $20 million estate. For a $20 million estate you want a really good lawyer.

[latigo]

A couple of updates. He did in fact divorce my mil ��.
His girlfriend that passed did everything for him, to that point he doesn’t know everything he has, hopefully all the paperwork is in his files, if it isn’t is there a way to help locate all of his assets?

While I live comfortably you can not deny the appeal of that amount of money, but it is his wish that my kids never want for anything as he hasn’t been in theirs or much of my wife’s life. He confided this to me so I am trying to help him.

I am trying to get at least my wife there sooner, would it be prudent to look into getting a lawyer on retainer in ca? I have group legal with my company as well, would this qualify even if it isn’t for me?

Thanks Cpt

Isn't it remarkable that (1) "he doesn't know everything he has"; (2) that "that everything he has" is scattered about in various places all unknown to you, yet you profess to know "that everything he has" comes to the tune of $20M? (Speaking, of course in round figures.)