Seth Tobias seemed to have it all.  He was 44 years old, rich and had a fair amount of  fame.  He died last year on Labor Day in the pool of his $5 million home in Jupiter, Florida.  He was considered a hedge fund wiz and was frequently on CNBC discussing the stock market on its show called the Squawk Box.  He had built a company that at its peak was worth hundreds of millions of dollars

Seth had bad habits.  He was said to be a heavy drinker and rumored to use a fair amount of cocaine.  When he died, he was married to a woman to whom he was husband number four.  He had met her four years earlier at a Super Bowl party in San Diego; dated her off-and-on for two years; married her in 2005 after proposing on the telephone and eloping.

The police were frequently called to their home to separate them after fights.  At least one time, Mrs. Tobias spent the night in jail.  Mr. Tobias filed for divorce.  The divorce was almost finalized when they reconciled.  By that time, Mrs. Tobias was spending over $2,500 per month on a psychic.

Mr. Tobias’ brothers alleged that Mrs. Tobias drugged their brother on Labor Day because he was getting ready to divorce her.  However, Mrs. Tobias was never charged with murder.

Seth Tobias had done a will in 2004 leaving everything to his brothers, father and best friend.  By mid-October, 2007, Mrs. Tobias and her late-husband’s family were fighting it out in Palm Beach Gardens probate court.  At that time she was being investigated for poisoning him.  Under Florida law, she was the sole heir of his estate because they did not have any children together and because there was not a premarital agreement.

This week a settlement was reached.  Most observers think that Mrs. Tobias did very well.  His brothers get his investment business and $3.2 million.  The investment business is not thought to be worth much.  Mrs. Tobias gets to keep the house and it appears everything else.

The moral of the story: plan!  Seth Tobias should have entered into a pre-marital agreement.  He certainly should have updated his Will and or had a Living Trust prepared and have done additional estate planning. 

It is relatively easy to avoid messes in probate court, but it does involve contacting an estate planning attorney.  Please do not hesitate to call if I can be of assistance.  Otherwise, probate will ensue and the results often are not what you would have contemplated.

You may remember hearing a couple of years ago about a groom who disappeared on his honeymoon from a ship.  The widow just received a settlement from the cruise line of over one million dollars and his parents are appealing the probate judge’s ruling in the case.

The administrator or executor is a combination of the coach and quarterback.  He or she has a lot of decision making power.  While they are required to act in a fiduciary manner and to carry out the terms of the will or trust, in the absence of instructions in the will or trust, they make the decisions as to what real estate agent to hire; what to sell an asset for;  and how to divide the assets whether the decedent left  a will or trust or whether the decedent died intestate. 

Let us assume there is a Will which provides that the testator’s estate shall be divided equally by the kids and there are 3 kids.  Furthermore, the assets are a house worth $300,000, bank accounts worth $300,000 and miscellaneous other assets worth $300,000. As long as each individual receives $300,000 the executor can select how that occurs and which kid receives what.

The time to oppose someone being made the executor or administrator is at the beginning of the probate.  Obviously, if the deceased person has written in his will that he wanted someone to be the executor, the court is going to select that person unless it can be established to the court that the individual is unfit. 

In the event that there was not a will, the probate code has an order for choosing the administrator of the estate.  Once again, the person who is in the first position according to the probate code, will be made the administrator unless the probate judge can be convinced otherwise.

The lesson of this post, is that people who are interested in being the administrator of an estate should consult with a probate lawyer as soon as possible.

Most wills and trusts contain a provision waiving bond.  The reason for doing so is that in California, the probate court will require a bond unless all of the beneficiaries sign a waiver of bond.  Sometimes the court will require a bond even when the Will waives bond or when the bond waivers have been signed.

For example, if the executor lives out-of-state, more than likely the probate court judge is going to order a bond even with a provision waiving bond and even if all of the beneficiaries agree to the waiver of bond.  Another reason for requiring a bond is if the estate has debts or creditors.  The probate court wants to be certain that creditors (including credit cards, companies, hospitals, etc. ) are paid.  The only leverage the court has over the executor/administrator/personal representative is a bond.

The purpose of the probate bond is to protect the other beneficiaries as well as the creditors in case the executor/administrator/personal representative decides to take the assets and run.  The bonding company, prior to issuing the bond, requires the individual applying for the bond to complete an application and it does its own credit check. Obviously some people will not qualify for a bond.  An experienced probate lawyer can assist in these types of situations.

The cost of the bond is tied to the size of the estate being probated.  For a $200,000 estate, the cost is approximately $860; for a $500,000 estate, the cost is approximately $1,760; and the premium increases from there.  In all cases the first year’s premium is non-refundable.  For probate’s that take longer than a year, the premium is on a pro rata basis with the entire premium being paid at once and then the bond company refunds upon the closing of the probate.