In preparing a last will and testament, you need to be conscious of the location of any property you own. In the United States, wills and estates are handled on a state-by-state basis. If, for instance, you live in California but own a second home in Arizona, your will must be admitted to a secondary (or ancillary) probate in Arizona to dispose of any property located in that state. And if you own property in another country, your will may have to comply with foreign laws.
You must also be aware of any other persons who may be affected by the disposition of property in your will. This can include creditors or persons renting a property you own. A recent case from the California Court of Appeals illustrates the type of dispute that may arise when probating a will in more than one jurisdiction.
Estate of Dubs
Kathleen Dubs was a college professor living in Hungary. She owned a residence in San Francisco that had been rented by Timothy Murphy, a local attorney, since 1994. Murphy initially a signed a one-year lease that converted to a month-to-month basis.
Dubs died in 2011. Her sister, Laurel Scrivani, filed a petition for probate in San Francisco. Dubs signed a last will and testament in 1991 leaving her entire estate to Scrivani. According to Scrivani’s petition, Dubs’s Hungary estate was disposed of through an affidavit rather than a formal probate process. (California has a similar procedure for small estates.) There was also an ancillary probate in Oregon to dispose of some real property Dubs owned in that state.
Scrivani decided to sell the San Francisco property. Murphy, the tenant, filed an objection with the probate court. He maintained he was a “creditor” of the estate due because Dubs held his security deposit at the time of her death. Murphy also alleged technical defects in Scrivani’s paperwork to establish the probate estate.
The probate court dismissed Murphy’s objections and approved the sale, subject to his rights as a tenant under the lease. Murphy still appealed. The Court of Appeal upheld the probate judge’s decision.
The core of Murphy’s complaint was that the sale of the property might “reduce the value of his leasehold interest,” because the new owner might evict him or raise his rent. But the Court of Appeal said this had nothing to do with probate. Murphy “is not legally aggrieved by the sale,” the court explained, and his legal rights as a tenant are still protected under California and San Francisco law.
Murphy’s case may not have had merit, but there’s a good estate planning lesson here for all landlords. Make sure your tenants understand what succession procedures are in place should you pass away during the term of a lease. This can minimize confusion and, hopefully, avoid unnecessary litigation. Contact the Law Office of Scott C. Soady today if you need advice on any estate planning matter.