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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 personally been involved in the probate community for more than 31 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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What to Know About Reverse Mortgages
By Jonathan Brooks, President, First Probate Loans
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In my business of extending credit to trust and probate estates, I regularly payoff reverse mortgages. To assi
st the Trust and Estate Bar, I have added the following Reverse Mortgage Informational Guide, published by the National Reverse Mortgage Lenders Association, to our First Probate website
link to article
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Addressing Complex Borrowing Challenges: Success Stories from First Probate Loans
By Jonathan Brooks, President, First Probate Loans
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Working with fiduciaries and their attorneys to borrow on behalf of trusts and estates is no small matter with complex probate, national and local real property, and finance lending laws. First Probate Loans manages the probate financing process for short-term loans to trusts and estates, post-property distribution loans, and distributions of trusts and estates.
The following examples illustrate the firm's highly specialized expertise in assisting fiduciaries, and its reputation for resolving challenging and difficult problems.
- Property Tax Reassessment Strategy Loan: Mom and Dad purchased a home 30 years ago, with a property tax basis of less than $1,000.00 per year; as the economy grew, so did the value of the family home. First Probate was able to fund a loan to the trust estate, eliminating the property tax reassessment event, thus saving the trust beneficiaries over $10,0000.00 per year.
- 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. 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 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, the sale and the First Probate Loans financing.
Fiduciaries looking to borrow on behalf of trusts and estates, and obtain loans at competitive rates, need a partner that can navigate complicated waters effectively and efficiently. Finding the right firm results in positive results for all parties.
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STRAIGHT NOTE LOAN PRODUCT
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First Probate Loans introduced a new loan product a few years ago to provide liquidity to upgrade, fix, enhance and/or clean up homes, to allow the family to obtain the best sale value. Visit our website for more information
These loans can be first trust deeds or in junior position (2nd, 3rd, or even 4th position) and be used for all loan purposes to benefit an estate. The terms of the loan can be tailored to the specific estate's needs. For example, if the estate can make payments, a simple amortizing or partially amortizing loan may be the best value. Or, should the trust or estate be unable to make payments a straight note may be the best option. A straight note has no payments; and, all principal and interest payments are due at the maturity date of the promissory note. Loan terms are usually 12-24 months; interest rates vary depending on location, lien position, loan to value, and the ability to make payments.
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The California BOE: Role and Resources in Property Tax Reassessment Strategy
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In order to assess the possibility of extending credit to estates that are secured by real property, and to determine the ability to repay a loan, most lenders require the following information:
- the current status of the property tax;
- any planned changes in ownership;
- any reassessment strategies planned.
BOE updates
In addition, lenders are particularly interested in periodic changes that the
California State Board of Equalization
(BOE) makes in regards to property taxes, reassessments and exclusions to reassessments. Keeping current with changes is key to any work in extending credit to estates secured by real estate.
The BOE is a public agency, created in 1879 by an amendment to the California Constitution to "equalize" tax assessments across all 58 counties in the state. The BOE is responsible for four areas of tax administration and fee collection.
- Franchise and income tax appeals
- Special taxes
- Sales and use taxes
- Property taxes (of special interest to estate planners and fiduciaries)
- BOE website - Tax preparers can to set up an account, pay taxes, set frequency of payments, make online payments, register for permits and licenses, request relief from interest or a penalty, and request a payment plan.
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QUICK RESOURCE GUIDE for Fiduciaries and their Attorneys including Practical Tips for
Non Pro-Rata Distributions to Avoid the Property Tax Reassessment Event
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In my business of arranging loans to trusts and estates, I work directly with fiduciaries and their attorneys. As this is the first newsletter for 2020, and as I embark on my 31st year working in and serving the probate and trust community, this resource guide will assist you to quickly find what you're looking for:
- To find out what is necessary to obtain a probate loan, go here
- To find out what is necessary to obtain a trust loan, go here
- To learn more about funding Non Pro-Rata Distributions to Avoid the Property Tax Reassessment Event, go here
- To learn more about Paying Off Reverse Mortgages, go here
- To learn more about Loans to Upgrade Trust and Estate Real Property Prior to Sale, go here
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THE 25th ANNUAL PFAC 2020
EDUCATIONAL CONFERENCE
We are proud to again participate as a Bronze Sponsor of
The 25th Annual P
FAC 2020 Educational Conference, this year in San Francisco, California May 27-30, 2020.
To obtain more information about the 2020 PFAC Conference news via email,
click here.
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First Probate Loans
manages the probate financing process for short-term loans to trusts and estates, post-property distribution loans, and distributions of trusts and estates. The company specializes in resolving challenging and difficult problems related to clouds on title, partial interest vesting, and cleaning title reports. The company provides complimentary property profiles, recorded liens and last vesting deeds, upon request
(
[email protected]).
Have Questions?
We're happy to help answer any questions you have.
JONATHAN BROOKS
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