During my first ever probate, the judge denied my Petition for Final Distribution because I needed an “Omnibus Clause.” I had no idea what the judge meant. Since then, I have successfully probated many estates. In this post, I will share with you what an omnibus clause is, where you should put it, and why you need it.
A probate omnibus clause is a catch-all clause that specifies how to distribute property acquired or discovered after the order for final distribution. An omnibus clause should say something like this: “Any other property of decedent or the estate not now known or discovered that may belong to the estate or in which the decedent or the estate may have any interest shall be [Insert names and percetnages].”
The omnibus clause is exceedingly essential. As you will read, without a proper omnibus clause you, you will go through probate all over again.
This post will explain why probate courts insist on an omnibus clause.
By the end of this post, you will know:
1. The exact language you need to use when writing an omnibus clause for probate; and
2. The exact locations where you need to put the omnibus clause in your probate petition and order.
Finally, I will provide you with samples of legal pleadings drafted by local probate courts to use as your templates.
The Fictional Estate of Jack & Jill
Suppose you are the executor of the Estate for Jack & Jill. You go through the entire probate process. You submit a petition for final distribution. The probate court approves your petition and signs the order for distribution.
Several years after the probate is over, you learn about a brokerage account owned by Jack & Jill worth a million dollars. What are you allowed to do?
Well, the answer depends on what the order for final distribution says (or does not say).
For example, if the order for final distribution included an omnibus clause, then there is no need to go back and seek court approval to distribute the million-dollar brokerage account.
But, if the order does not have an omnibus clause, then you will need to go back to the probate court and file one of two documents. First, you can file a petition for instruction asking the court how to distribute the newly acquired brokerage account.[i] Second, you can file a petition for administration after discharge.[ii]
What is an Omnibus Clause?
An omnibus clause is language in the order for final distribution that specifies how to distribute property acquired or discovered after the order for final distribution.
Typically, an order for final distribution “binds and is conclusive as to the rights of all interested persons.”[iii] Additionally, the Probate Code allows a personal representative to distribute the estate property “immediately. . . without further notice or proceedings.”[iv] But the order itself it is only conclusive as to the property and persons referenced in it.
Therefore, this presents a problem for probate estates. How can you be sure that you have collected all of the estate property? People’s finances are very private. Accordingly, there is a significant chance that the person who died hid wealth or kept a large portion of the Estate a secret.
The Probate Code allows immediate distribution of property acquired or discovered after the order for final distribution if the order disposes of the property. But how can a court order dispose of property no one knew about?
The answer is an omnibus clause.
For example, here is a sample omnibus clause provided by the County of Santa Clara Superior Court:
Any other property of decedent or the Estate not now known or discovered that may belong to the Estate or in which the decedent or the Estate may have any interest shall be distributed as follows: [Specify names and percentages].”
If this, or similar language, is in your order for final distribution, then you have an omnibus clause.
Why Do You Need and Omnibus Clause?
The Probate Code does not technically require an omnibus clause. Instead, the Probate Code allows court permission to adopt whatever rules they want regarding orders for distribution. Practically every court requires an omnibus clause.
If your court does not require an omnibus clause, you should nevertheless include it.
The Probate Code says that if the order for final distribution does not have an omnibus clause, then the property is distributed “(1) in the manner ordered by the court on a petition for instructions or (2) under . . . administration after discharge.” [v] Thus, if you do not have an omnibus clause, you will need to file another petition with the probate court and start again. It will not take as long as the first probate, but it will take some time, and it will likely be expensive.
Therefore, omnibus clauses provide real finality to the court’s order for final distribution. Furthermore, since they state exactly what to do with any property located after the probate, omnibus clauses offer peace of mind to the personal representative.
Preferred Language for an Omnibus Clause.
The sample language provided by the Superior Court of Santa Clara County is perfectly fine. In case you forgot, their omnibus language says:
“Any other property of decedent or the estate not now known or discovered that may belong to the estate or in which the decedent or the estate may have any interest shall be distributed as follows: [Specify names and percentages].”
But, there is a better version.
The Superior Court for the County of Riverside has the better omnibus language. The Riverside Probate Court’s omnibus language says:
“Any other property of the Estate acquired or discovered after this order is made, including any unused portion of the reserve for closing costs, shall be distributed as follows:”
Notice that the Riverside language includes the unsued portion of reserve closing costs.
Additionally, the Riverside language is simpler and more direct.
But either version is acceptable.
Where to Put Omnibus Language.
Omnibus language needs to go in the proposed order for final distribution. The best location to put the omnibus language is immediately after you list the names of the beneficiaries of the probate estate and their percentages.
For instance, if you are preparing an order for final distribution that says that the probate estate gets split evenly between two siblings, your proposed order may look like this:
“The personal representative is authorized to distribute the assets of the Estate as follows:
- Bill Doe 33.333%
- Sue Doe 33.333%
- Bob Doe 33.333%”
If this is how you prepared your proposed order, then immediately after this section you would add:
“Any other property of the Estate acquired or discovered after this order is made, including any unused portion of the reserve for closing costs, shall be distributed as follows:
- Bill Doe 33.333%
- Sue Doe 33.333%
- Bob Doe 33.333%”
You can find an excellent resource form the Superior Court of Santa Clara County.
In addition, here are two examples of documents for your Petition for Final Distribution.
[i] California Probate Code § 11642(b).
[ii] California Probate Code § 11642(b).
[iii] California Probate Code § 11605.
[iv] California Probate Code § 11641.
[v] California Probate Code § 11642(b).