What Happens When You Die Without an Estate Plan (California Probate Reality)

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In this conversation, attorney Elijah Keyes discusses the critical importance of estate planning for individuals and families, emphasizing that neglecting to create a plan can lead to significant legal and financial complications. He explains the various costs associated with estate planning, the challenges of navigating probate, and the real-life consequences of poor planning. Keyes also highlights the role of attorneys in creating effective estate plans and compares different approaches to estate planning, ultimately advocating for a thoughtful and proactive strategy to protect one’s assets and family.

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Investor Fuel Show Transcript:

Elijah Keyes (00:00)
That’s right. Yeah, the biggest thing about estate planning is that you don’t know when you need it. And so a lot of people delay and most people delay too long. About 75 % of people, regardless of how much money they have, never do some sort of plan. So what happens is when they can’t make decisions anymore, then the government, which is well known for managing things well, takes over and they have prepared a will for you. They prepared a succession plan for you if you have a real estate portfolio.

the judge’s hands are in it and probates in California take three years.

Dylan Silver (02:06)
Hey folks, welcome back to the show. Today’s guest, Elijah Keyes is an attorney in the Bay Area of California and the founder of the Keyes Law Group, where he has helped thousands of families and investors protect what they build through estate planning strategies and real estate focused legal strategies. You can find him at keyeslawgroup.com or on LinkedIn, Facebook, or Instagram. Elijah, thanks for taking the time today.

Elijah Keyes (02:31)
Thanks for having me, really appreciate it.

Dylan Silver (02:33)
When we talk about ⁓ estate planning, it’s so important really for everyday folks, for seasoned investors, because if you don’t do it, someone else is gonna have to deal with it, right? It’s not something that you can forego and say, well, someone else will figure it out. They will definitely be having to pick up the pieces, right?

Elijah Keyes (02:54)
That’s right. Yeah, the biggest thing about estate planning is that you don’t know when you need it. And so a lot of people delay and most people delay too long. About 75 % of people, regardless of how much money they have, never do some sort of plan. So what happens is when they can’t make decisions anymore, then the government, which is well known for managing things well, takes over and they have prepared a will for you. They prepared a succession plan for you if you have a real estate portfolio.

the judge’s hands are in it and probates in California take three years.

So welcome to the show that if you are married and you have a wife or a husband, your spouse doesn’t see a dollar for years.

Dylan Silver (03:37)
When we talk specifically about who needs an estate plan, right? And I was watching one of your videos where you’re talking about, when you hear the word estate plan, it makes it sound like there’s some regal palace that you’re planning, you know, a succession plan for. But really it’s for anyone who has property, right?

Elijah Keyes (03:56)
Right. Right. You would think, you know, the word estate is weird. I wish I wish that we could change the definition of what I am from an attorney to like a tax and family project manager. It’s really what I do. Right. I work on a project. And so when you think estate, you think of this big mansion on top of a hill. Right. And some got some lord who’s sitting there sipping tea at four in the afternoon and having all these peons work for him. It’s not really what it is. And estate is what you own. It just so happens that these people own a lot.

Right? And that’s okay that they own a lot. And it’s okay if you don’t own a lot. The difference is, is that an estate plan takes what you own and has just a number of tools that we use to try to pre-plan things. So you might think that an estate plan is weird, but it’s not. It’s just a technology. It’s something that you and I might use to try to make sure that your decisions are done the way that you want them. Because the way that the government has planned it,

The government has planned it based upon this imaginary set of individuals who aren’t you and this imaginary set of circumstances who aren’t you. And then they’ve tried to layer on the judge’s decisions and the judge is in control.

And so if you don’t make a plan, totally fine that you don’t, but you have chosen that the judge is more important than your family.

Dylan Silver (05:57)
You mentioned three years, right? So if people don’t have a plan, what’s happening, that’s a long time, what’s happening in those three years?

Elijah Keyes (06:06)
So there’s five things that need to happen after someone dies. Five. We have to take control of their things. I met with a family yesterday. The husband had passed away. He owned property with his mother but wanted to give it to his wife but never did a plan. No one can sign his name. If you are unconscious in a hospital, no one can sign your name. If you have a real estate portfolio, you need to collect checks and you need to pay mortgages. No one can access your bank account. It’s done.

No one has permission, only the judge has permission. So someone has to get access to your stuff, not ownership. Uh-uh, they can’t take it. They need access. So you need access to control. Then you have to value things. You have to pay debts. You have to resolve disputes. You have to deal with all of the issues that are present with all of your property and your family. Maybe you have a sister who’s really aggressive who says, owed me money. Maybe you have a family member who says, hey, I think you should do this way and throws a neutron bomb.

And now that person walks in and that person, the judge listens to that person. The judge listens to your crazy aunt Sharon, because your crazy aunt Sharon believes that aliens say that she should get all of your real estate. The judge listens to her because the judge is required to. Just so happens that the judge has a really good BS meter and they know when people are BSing them, but you have to deal with all that stress and you’ve allowed your family to deal with it. Final step is distribution. Now California is weird.

because California is the second worst state for probate in the country. Hawaii is the only worst one. The easiest state for probate in the country is like New Jersey. New Jersey is super easy for probate. It takes four hours to get permission in California, it takes two months. So it’s just a scale difference.

Dylan Silver (07:51)
I’m from New Jersey, so it’s good to hear that we’re doing something right. I like-

Elijah Keyes (07:54)
Well,

New Jersey does a lot of things right, but they do a lot of things weird too. So, know, everybody has something.

Dylan Silver (08:01)
I want to ask you if I can on a granular level, know, when when folks are thinking about estate planning, let’s say it’s it’s one home, right? And it might not be some like regal home as we talked about, could be a fairly distressed property, but it’s livable. What’s the cost of estate planning to get the book to have something in place? I know it’s going to range, but what’s the general cost of an estate plan for one home in California?

Elijah Keyes (08:26)
Well, let’s first look at what’s the cost of not doing a plan. ⁓ Your family has to deal with all your crap. And I, I made a decision a long time ago that I wasn’t going to allow other people to deal with my mistakes. I was going to try to own my own mistakes. I wasn’t going to put them on other people. And so the cost of me not doing a plan is that my wife has to deal with my entire business. That my children are left without a father and they’re left with uncertainty.

If my wife and I died at the same time, my children would have millions of dollars set in a bank account that no one could ever steal. would be set banks and organizations that would take care of them. They would be completely fine. But for someone who hasn’t done a plan, that’s the effect. So if you’re thinking of cost, it’s money out of your pocket. And if you’re unwilling to do it because of money, you’re like 75 % of people who don’t have a will. So Prince, the artist formerly known as Prince.

Dylan Silver (09:18)
Yeah.

Elijah Keyes (09:22)
did not have a will or a trust. He became an ardent conservative Christian near the end of his life and he gave 90 % of his income to his church. And he never did a plan because he always thought one word, one sentence that most people would never do a plan think. And they keep that said, I have time. I have time. I have time. And so he didn’t pay 50 bucks to download a simple will and write it out himself.

and his brothers and sisters are still fighting over his estate 10 years later. There’s no fighting.

Dylan Silver (09:54)
When you talk about

writing a will yourself, I forget the technical term, what is it called when you personally write the will?

Elijah Keyes (10:36)
You write the will by hand, like you write it out on a paper, it’s called a holographic will. The law is full of all these weird, special words because they think that they’re weird and special. It simply means that it’s a handwritten will. So let’s go back to your question of how much does it cost? It’s going to be very personalized based upon the provider. A lot of people think, hey, I want to do this for the cheapest. So let’s consider what you’re going to do. I have a house. I have some bank accounts. My house is worth

what is worth $700,000. But it’s a house. And so you think I just have a house and I have some bank accounts. This is simple. And the answer is no, the court doesn’t care that it’s that it’s a house. The court cares that you have $800,000. So let’s take your $800,000. And let’s try to let’s try to let’s try to push this down to the bottom of the barrel. Let’s try to spend the least amount possible. And here’s what you get.

You either get a lawyer who doesn’t know what they’re doing because they can’t generate a larger fee, right? We turn away 80 % of every single person that contacts our firm because they want something cheap and I don’t want to provide a cheap product. I want to provide time, expertise and a very, very good result. Or you go online and you do it yourself and then you become your lawyer. And so anybody can be their own lawyer. Just so happens that most people will be their own lawyer, screw it up. So three ranges.

You could go bottom of the barrel somewhere between zero. So you could download a free form from a local library or maybe about three to $4,000. That’s kind of the bottom of the barrel lawyers. There’s some insurance companies that will pay for an, pay for an estate plan. They pay people about, they pay an attorney about 800 bucks. So you might think if you walk into a lawyer’s office, you’re to pay them $800 to do an estate plan. You might think that that would be a crappy plan and you’re right. It is. Uh, so

So then you have between 3000 and about $8,000 and 3000 to 8,000 is actually the competent attorney that isn’t going to do a whole lot of complex planning. Our fees tend to be kind of at the top end of that range because what we do is that we provide a very robust solution and we have good relationships with our customers. We have good, good presence, all these marketing tools. We have a very robust team, blah, blah, blah, blah, blah, all this stuff. And what happens there is

Nothing is a benefit to you, has no benefit to at all, zero. You might think, well, I don’t invest in anything that doesn’t pay me money. Great, then never buy insurance. Don’t ever buy car insurance, because car insurance is never something that ever pays you money, never. It only pays when something goes wrong. It is, it is, I do not work in an environment where I promise to earn you money. I promise to make sure that your family doesn’t get fucked up when you mess it up. And so that’s my job. My job, I’m sorry, I didn’t know if I could swear.

Dylan Silver (13:29)
That’s okay.

Elijah Keyes (13:30)
Okay, so I think you’re talking to real estate investors, so don’t really care. So then you have the top end range. So our top end range starts at about 15,000. And so what we do is we help people that have a lot of money or very complicated circumstances. And so you might think, well, my family is simple. And in your mind, you’re probably right. You’re probably right that in your mind, because you have lived with your family for 50 years, your family is simple, but that’s because you’re used to them.

Dylan Silver (13:33)
Yeah, no, they don’t really care.

Elijah Keyes (13:59)
It doesn’t mean that they actually are simple. If you have a disabled parent or if you have a child with Down syndrome or if you have a brother who has early onset Alzheimer’s or if your spouse is it has ⁓ my wife has certain conditions. I have certain conditions. Everybody has something. And so if the conditions are serious enough that they need special attention, it’s no longer simple. And so when people come into my office and they say this is simple, what they mean is I don’t want to pay that much. And my answer is

you can hit the door because I’m not going to do a crappy job because you don’t want to come out of pocket. My, my own opinion, not anybody else’s.

Dylan Silver (14:36)
Now when we talk about the importance of this, I mean, we’re talking about $15,000 on Bay Area homes that I don’t know the average price of a Bay Area home, but I know it’s probably double what it is or close to what that it is in Dallas, Texas or San Antonio where I’m active as a realtor. And I know from my personal experience dealing with people going through probate in Texas, that in many cases this…

like we’re talking about, it’s not something that they saw coming, they thought it would be easy, it’s one property and now they’re stuck in this process, right?

And they’re not experts in navigating this process, this isn’t something that they saw coming. So one of the things that comes to mind as someone who works with lot of investors and as someone who’s in the space is this is so important, especially in a state like California where homes can be a huge percentage of people’s personal wealth, that if you’re not,

prioritizing this, right? Not only are you saying, well, I’ll do it when I’ll do it, you’re potentially having a ripple effect of locking up much needed equity for your heirs. And I’m thinking, like creatively here, hey, if this is gonna be such a financial burden, like if so much of your wealth is tied up in this home that’s been in the family for a generation or two, then even something like a HELOC, a home equity line of credit,

Elijah Keyes (16:24)
Right. Right.

Dylan Silver (16:41)
so that you can gain access to that. If you know, hey, I’m getting older and this is a huge portion of our family’s wealth, this is really important, we’re in a California home, let’s take care of this because this is a priority for us.

Elijah Keyes (16:54)
You have a really good idea, but it won’t work. It’s a great idea. Who’s going to sign your name to pull from the HELOC?

Dylan Silver (16:57)
Really? Mmm.

I’m saying before, before anything happens.

Elijah Keyes (17:06)
Even even totally true. You have a great idea. You take the HELOC you pull money out you put it into your bank account Who’s gonna sign your name? Can I take access to the bank account? Nobody No, I understand. I totally get it. You have a great idea But you’re trying to use a bankers tool to solve a judge’s solution and it it’s a good idea You you’re thinking in the right way the right way of thinking here is that is that I’ve met with a family yesterday and the husband

Dylan Silver (17:15)
I’m saying me individually, like, okay.

Okay.

Elijah Keyes (17:34)
had bought a property with his mother and never solved the issue that when he got married seven years ago, he never put his wife on title. He never took his mother off. He never did a will. He never did a trust. He never did anything. California’s law screwed his wife over. He invested a million dollars into the piece of real estate and his wife is getting $300,000. He paid hundreds of thousands of dollars. He paid millions of dollars. He paid a million dollars.

for this house and his wife is getting 300,000 and his mother gets 700 because that’s the way that the law works. It’s not the fact of what’s fair. What’s fair is in your mind. What’s legal, the law is not about what’s fair or right. It’s simply a line in the sand. And so here’s the problem that people face that they don’t have awareness of. The problem is,

is that when you buy a house, a lot of people use a house as a savings investment. The reason why people buy properties is because they think, well, I’m going to pay rent anyway, so I want to pay rent to myself. So I’m going to pay the mortgage and I’m going to pay the insurance and the property tax and whatever it is, all the expenses, but that’s paying myself. So essentially what they’re doing is that they’re saying, I want a place to live and I want a savings account too. So I’m going to use this as a savings account. Just so happens that the real estate market grows faster than the money market.

So I can actually have better savings. can have a better result by having a long-term real estate investment. But now what you’ve done is you turn your bank account into something that a judge is in control of. And so if you don’t take control of that bank account, your family doesn’t have any access. So you can get a heloc and you could pull money out and that money would then go into a bank account and your family still doesn’t have access to that bank account because it’s in your name. This isn’t a problem of real estate. This isn’t a problem of banks.

It’s a problem of whose name is on the owner line and who’s going to sign your name if you’re unconscious in the hospital.

Dylan Silver (19:29)
But they could use

it for attorney fees, right? They could use the heat lock. That’s what I was referring to. No.

Elijah Keyes (19:32)
No,

You have a great idea who’s going to sign your name. ⁓

Dylan Silver (19:36)
I’m saying for myself,

so if I own the home and I take out a clock for me and to pay my attorney, I couldn’t do that.

Elijah Keyes (19:41)
I am.

Oh, I’m sorry. My apologies. Yes, you’re good. Sorry. Sorry. So I’m sorry, you’re trying to get access to money. I understand that. So if you were to take out a HELOC, and if you were to borrow on the house or whatever it is to pay attorney’s fees, right, you can do that. My recommendation when you’re dealing with a lawyer is to look at the cost of their services and to view that as an investment because it really is. When you’re looking at an insurance, you buy insurance on a piece of real estate so that you don’t actually have to say you say you don’t have to you don’t have to suffer this loss.

Dylan Silver (19:47)
Yeah.

Right.

Elijah Keyes (20:14)
You have car insurance because you don’t have to suffer this loss. My services are essentially a very robust insurance policy. So you’re right. If you can borrow on the house, you get access to your, to your equity so that you can actually pay an attorney. It’s fantastic. It works well.

Dylan Silver (20:27)
You know,

that’s something that I think a lot of people are not thinking about. but it’s again, it’s this idea of, well, this isn’t going to happen to me. And in I’m thinking about Texas specifically, it makes sense in Texas. It makes sense in California, because here’s the thing is, it’s let’s say, you know, a 2 % of the value of the home 15 grand, right in the Bay Area might be 3%, right? But is that worth

saving three years of your time, of course it is. Of course it is. Not to mention the headache, not to mention, what I’ve seen personally, which is families effectively fighting over something that they didn’t foresee to be a problem, right? So they didn’t realize it would be this complicated. They figure there’s a succession plan in place and then there’s not. And then you realize, okay, well, what do we do now? Because we’ve got to pay for maintenance of the property, right? How are we going to do that? Things break.

It’s an older home. These things continue to pile up and without that succession plan in place, it’s honestly a great source of grief for a lot of families.

Elijah Keyes (21:37)
Let me paint you a picture. I have tons of war stories. So let me paint you a picture based upon a lawsuit that was filed yesterday. This is yesterday. my client was there are three daughters in the family, all professionals. The first daughter, my client, takes care of her aging mother. So her aging mother has them stay put. And the aging mother goes to a state planner

like me and says I want to give everything to my daughter that’s taking care of me because my other two children I have given them two million dollars of gifts literally she has given them two million dollars of gifts over time and the other two daughters still have no money because they just spent it okay so over time that’s what we have now what the mother really has what she has left over she sold her properties she’s liquidated her bank accounts she’s given a lot of money away the one daughter that was taking care of her for so long

has all of the gifts that she gave her and invested it. And the other daughters took vacations, bought Birkin bags, bought new cars. They just, they spent it. And that’s, if that’s how they want to live their lives, that’s okay. But now they have no money. Neither of them have real estate and they’re now living not so good a life. And so the mother then goes and lives with the daughters for one month, just one month. And during that time, the daughters pulled the one piece of real estate out of the living trust

tried to sell it and stole $300,000, one month. Now, mother has died. We can take control of the property. The two sisters sued the one sister, accusing the one sister of stealing all the money. So thieves will accuse other people of stealing. And eventually, if this goes to court, what’s gonna happen is we have all the evidence that we need to win the case. Great. Do we wanna have that fight?

Dylan Silver (23:31)
Right.

Elijah Keyes (23:31)
Because

until that fight is over, argument, lawyers’ arguments are about leverage. Leverage means how can I force you to feel pain? So they want to remove her from the trust that names her as a beneficiary. They want to accuse her of stealing from a mother. They want to accuse her of beating up her mother. They want to accuse her of all these horrible things. Now we are in the world that sister is against sister and it’s she said and she said and all these arguments going back and forth. And the judge doesn’t…

care about all this crap. But basically, how you work in the estate planning court in a court like that, where people are arguing, it becomes character assassination. It essentially becomes becomes ⁓ I heard an attorney say this, and it’s fantastic thing. It becomes full context storytelling. Let’s go ahead and tell a story that shows about how you are the most horrible person in world.

And the other person tells a story about how you’re the most horrible person in the world. And the person that has the most proof about how who’s horrible wins. And it’s disgusting, but that’s what it is. And why are they fighting? Because they could get another 300 grand at it.

Dylan Silver (24:39)
Yeah, I mean, look, that’s that’s that’s really what what happens here now with an estate plan in place. Do people ever still try to to fight the estate plan?

Elijah Keyes (24:50)
They do. And this is where you have that difference in range of fees. You have the fees of $2,000 or the insurance plan where they pay somebody 900 bucks. Does that attorney have the time to actually sit with you and explore things and explain how to work, how to do a workaround? No. Then you have the fees of somewhere between three and $8,000. Maybe that person has time or you have the upward fees. So let me give you another comparison, another conversation from yesterday. This is every day we have this.

Yesterday, client calls, he says, I have a company that’s earning $10 million in revenue, I have a $5 million loan. During COVID, my company went down quite a bit and we almost went bankrupt. My Wife and I almost lost everything. How do we protect our house? Because if a creditor comes, the creditor is going to try to take the business, fine, but they’re not going to stop there. They’re going to keep going. How do I protect my house? And so we had a conversation about how do we do that?

Now if you want to pay the bottom dollar, can you actually do that? No, and that’s OK. It’s OK if you don’t want to do that. If you do something better than nothing, 75 % of people don’t have an estate plan. You’re a young guy. You you you probably don’t have a don’t have a mature family with late teenagers and maybe a mother who has Alzheimer’s. You probably don’t have that, so I doubt that you have a very robust plan and maybe that’s right for you at this time. But for someone that that has more.

has more life experience, someone that has more savings, someone that has more family members to protect, it will go down. And when it goes down, do you want to plan it? Do you want to direct it? Or do you want someone else to control it? There’s a really good image that sticks in my mind. And state plan is a technology, something that you and I understand has been created. And it’s just been created by people. It’s been created by judges, it’s created by laws, it’s been created by whoever. And so that specific plan,

sorry, my my alarm is going off. Sorry. ⁓ The that that specific plan is a technology. And so you can view it in one of two ways. You can say I want the cheapest technology that I can possibly get simply because I want to try to drive the market. And that’s fine. You can do that. And so if

Dylan Silver (26:51)
Thanks again.

Elijah Keyes (27:06)
do that, you might view it as like a car driving down a road. And so you’re going to buy the cheapest car possible and the cheapest car which is available on the market is a Hugo. Hugo came from Yugoslavia. That’s why it’s called Hugo.

The Yugo was the worst car ever created and it crashed so much that it’s no longer street legal, you’re no longer to purchase it in the United States. But there’s plenty of attorneys who operate in a reckless way. There’s plenty of people who provide a service that’s pretty bad. Legal Zoom was sued by every single state in the country. Every single state in the United States sued Legal Zoom. Not because they’re bad, but because they told people we’re providing you a product prepared by lawyers and it wasn’t. It’s simply a computer program.

and people had confidence that LegalZoom was a lawyer that they were telling them what to do. No, they’re not. It’s a computer program where you are operating the program and you’re telling this thing what to do. It’s the same type of thing that I might do except that I have LegalZoom times a thousand when I’m preparing something for a client. Okay. So do you want LegalZoom times a thousand plus somebody who’s been doing it for 20 years? Or do you want to do it yourself? Totally fine. So the other side is do you need a Lamborghini? Probably not. Some people need Lamborghinis. Some people want a Lamborghini.

Some old ladies want to drive down the road because they’re the little old lady from Pasadena. Totally fine. That’s the technology that she wants. You probably want something in between. Do you want a Volvo to drive down the road, which is ultimately safe? That’s the reputation anyway. Do you want a Range Rover or do you want to go to somebody who actually does, who actually sells cars for a living? In which case they would probably tell you to buy a Toyota Sienna. Not because a Toyota Sienna is good or bad because Toyotas have more resale value than any other car.

and Sienna is the van, and the van is the safest vehicle on the road.

Dylan Silver (28:49)
what makes sense, right? Get what’s going to be protecting you, but also, you know, understand what you’re getting, right? Because if you’re thinking that you’re getting the Sienna and you’re getting a Yugo, that can be a difficult realization when you realize, hey, you’re stuck in the middle of the road and or you’re veering off a hill in the Bay Area. ⁓ We are coming up on time here, though, Elijah. ⁓

KeyesLawGroup.com is the website. Is that the best way for folks to get in contact with you and your team?

Elijah Keyes (29:21)
Yeah, go to the website, KeyesLawGroup. That’s K-E-Y-E-S. That extra E there is because we’re special. You can also find us on YouTube. We have KeyesLawGroupPC is our YouTube channel. We have a podcast there. We have about two or 300 videos. Go ahead and check it out. Best way to contact us, you can find us on the website or just give us a call. We love to work with people. We work with a lot of people. If you want to work with Elijah, it’s a little bit more expensive than to work with one of the associates, but.

Dylan Silver (29:48)
Elijah, thanks for your time today. Thanks for coming on.

Elijah Keyes (29:51)
Thanks so much.

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What Happens When You Die Without an Estate Plan (California Probate Reality)

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