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Trust and Estate Solutions
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Hi, I'm Jonathan Brooks, the principal of First Probate. First Probate provides short term loans to fiduciaries - executors, administrators, trustees, conservators and guardians - who borrow on behalf of trusts and estates. First Probate specializes in resolving challenging and difficult title problems associated with trusts and estates. I have provided these services to the probate community for more than 20 years.
First Probate is happy to provide you with a complimentary property profile, recorded lien and last vesting deed, upon request (Send us an email).
If you have any comments, simply hit REPLY and let me know. If you have some information that you would like to communicate to the probate community, forward it to me for consideration. Lastly, if I haven't convinced you that my newsletter is worthwhile, just press "SafeUnsubscribe" below.
Here's hoping we continue to stay in touch and that we may be of service to you!
Very truly yours,
Jonathan Brooks
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The Benefits of Using a
Professional Fiduciary
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A very useful tool for trust and estate attorneys, and their clients, is the use of a Professional Fiduciary. For years I have witnessed the tremendous benefits of using a Professional Fiduciary vs. a family member fiduciary.
The following examples illustrate the benefits of using a PFAC member to solve challenging and difficult trust and estate matters:
- Paying for conservatorship costs: A PFAC member was appointed conservator of an estate with real property valued at $400,000. The fiduciary obtained a court order to borrow $200,000 from First Probate Loans to pay for the ongoing costs of the conservatorship.
- Helping heirs keep the family home: In a case where a PFAC member was named the court-appointed administrator of a decedent's estate, intestate heirs wanted to keep the family home. The estate, however, had no liquidity to pay administration expenses, including attorney fees, administrator commissions and creditor claims. The member was able to obtain a court order to borrow $50,000 from First Probate Loans. Fees, commissions and claims were ordered paid, with the property distributed subject to the First Probate Loans lien. First Probate Loans then arranged long-term financing for the heirs.
- Netting profits for a trust estate: A PFAC member was named the court-appointed successor trustee (and conservator) of an estate with real property valued at $1.7 million. The first trust deed was $1 million; the PFAC member and her attorneys negotiated down a Franchise Tax Board lien of $1.5 million to $100,000. She obtained a court order for a second trust deed, which First Probate Loans funded, to pay off the lien. The court approved the sale of the property for $2.2 million. The PFAC member netted the trust estate $1.7-1.8 million from her services, through the sale and First Probate Loans financing.
FULL DISCLOSURE:
The Professional Fiduciary Association of California appointed Jonathan Brooks, President of First Probate Loans, chair of the Professional Fiduciary Association of California 2015-2016 Marketing Committee. PFAC's annual conference will be held June 1-4, 2016, in Indian Wells, California.
To receive 2016 PFAC Conference news and registration information via email, click
click here.
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Paying off a Reverse Mortgage
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In my business of arranging loans to trusts and estates, I pay off a significant number of reverse mortgages. As more seniors turn to reverse mortgages, surviving spouses or adult children become overwhelmed when one or both of their parents eventually dies.
When a reverse mortgage borrower dies, the loan becomes due and payable. If adequate and quick communication to the reverse mortgage company is not made, the property will go into foreclosure and additional fees added. Beneficiaries of trusts and estates, and intestate heirs, frequently call me when they want to keep the family home and prevent a trustee sale or foreclosure proceeding.
PRACTICAL TIPS:
- Please call me as soon as the reverse mortgage borrower passes. The longer it takes to payoff the reverse mortgage lender, the more additional fees will be added.
- A reverse mortgage servicer uses a number of resources to discover when a borrower has died, including the Social Security death index, proprietary databases and annual occupancy letters. Once the servicer discovers the borrower has died (or vacated the property for a nursing home), the servicer sends out a letter intended to inform the heirs of the rules of the loan and ascertain their intentions for the loan and the property.
- Alternatively, if the reverse mortgage borrower was married, the surviving spouse might be able to remain in the home even if he or she wasn't a co-borrower (please look at HUD's New Guidelines for Non-Borrowing Spouses).
- According to HUD guidelines: If the property is under water the heirs may purchase the property directly from the lender at 95% of the appraised value.
- The borrower's personal belongings and furnishings can be removed. Fixtures, as defined by state law, can't.
- After the borrower passes away or moves, if the heirs rent out the house or live in it themselves (without notifying the reverse mortgage lender) it can be considered fraud (according to HUD guidelines) because the loan became payable when the last owner died or vacated the premises.
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Have Questions?
We're happy to help answer any questions you have.
JONATHAN BROOKS
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