How Receivership can Protect Values in Matters of Trust & Probate – Fiduciary Broker Vlog #6

Ep6

Hi, I’m Dan Collins – a California licensed real estate broker with expertise in real property matters in Probates and Trusts. I am also a California licensed general contractor and receivership expert.  To learn more about receiverships protecting values, please visit my website: probate-realtor.biz

I want to tell you about how receivers can be useful in difficult trust or probate cases.

Family relationships can sometimes create toxic environments, especially amongst siblings who are beneficiaries to a Trust or Probate.  Let’s be truthful here; being asked to act as a Trustee or to administrator probate is a thankless duty that comes with real exposure to risk and liabilities.

In a family dynamic, it is usually the most responsible sibling who is appointed to act and administer a Trust or Probate after a loved one has died.

Usually the person who has stepped up to act as the Probate administrator or, a Trustee, has a family and a job with a full life and not enough hours in a day or week to accomplish everything they need and want in their life. Add to that life situation the burden of being an executor of an estate and you have a recipe for a lot additional stress.

Attorney Mike Hackard of Hackard Law and I have seen these dynamics countless times; stress can cause people to act in ways that are not becoming. In some people, stress can cause a person to become aggressive or emotionally unstable, which can lead to poor decision making.

Beneficiaries do not have a position of strength or leverage when that occurs with the person who is responsible to protect assets for their benefit.  Sometimes they feel they need to seek legal counsel if they suspect the Trustee or Executor is not acting in accordance to trust and, or, the last will and testament of a decedent, especially where legacy assets are involved, such as a business or income property.

When an Estate Executor is acting in ways that obviously are counter-productive to properly run a business or manage an income property, quick action is necessary to protect the legacy asset.   Appointment of a Receiver is an effective and powerful tool to employ in those situations. A Receiver has fiduciary duty to all parties, not just one side. There is no more equitable action than to seek the appointment of a qualified receiver to protect legacy assets.

The Receiver can step in quickly upon the court granting the appointment, assess the operations and make certain the business or the income property is adequately protected with insurance, licensing if necessary, and to create a temporary estate with all the powers of possession to provide an orderly takeover and protect all parties as well as the legacy asset.

The Estate Executor can also benefit from the appointment of a Receiver because it mitigates their exposure to liability if they have deliberately or, inadvertently taken action that if left uncorrected, may result in negative consequences — such as a monetary judgement if they were not removed from a role which they were not qualified to manage, but were placed in because the decedent named them as the Estate Executor.

I’m Dan Collins, a California licensed real estate broker, general contractor and receivership expert.  To learn more, please visit my website: probate-realtor.biz

 

What Defines You in Your Role When Administering an Estate? – Fiduciary Broker Vlog #5

Hi, I’m Dan Collins – a Sacramento, California licensed real estate broker with expertise in real property matters involving Probates and Trusts. I am also a California licensed general contractor and I act as court appointed receiver administrator for the Superior Court.  If you have found yourself tasked with being an Executor administering a Probate or a Trustee in an estate, I can help you effectively execute your duties that attorneys do not help you with. To learn more, please visit my website: probate-realtor.biz

Today’s subject is about serving as a Trustee or an Administer to an Estate, and the obligation to act as a fiduciary in your role. I read a Zig Ziglar quote this morning that was very appropriate to this subject.  Mr. Ziglar stated: “Integrity eliminates guilt, because you do the right thing.”

If you are a family member that has been tasked to administer an estate, you may not know it but your actions will define you, and your family’s opinion of you, for years into the future.  I know this from my own personal experience having acted as Probate Administrator in my father’s estate, and as the Trustee in my mother’ estate. If you have recently been appointed as a personal representative to a Probate or, as a Trustee to administer an estate, you will be presented with challenges in the coming months that you never imagined.

Let me share with you a story about a very difficult I challenge I personally had to negotiate while acting as a Trustee administrating my mother’s estate. To complete the distributions to my siblings, who were beneficiaries, I needed to sell an income property that her estate partially owned. The tenant had provided me with the required written notice of their intention to exercise the option to purchase, and my siblings and I were anxious to complete that sale and make the final distributions of the estate.

I had a willing buyer, who was the tenant in the property, but his business partner objected to the terms.  The negotiations to settle with his unhappy partner took almost three months, during which time the bank withdrew its offer to fund the loan.

Meanwhile, my younger sister, who had anticipating that the sale would be completed, and that she would receive a cash distribution, had gone under contract to buy a home in the city where she lived. She had placed a large non-refundable deposit on the home and had days to close her acquisition or she would forfeit her large deposit. As you can imagine, this created a lot of stress on me to perform and meet everyone’s expectations.

Despite years of experience as a court appointed receiver administrator, and years of experience with all facets of probate, I found myself in a defining moment in my life.  I knew that how I handled this situation would define my relationship with my siblings for the rest of my life.  Fortunately, following the integrity advice of Zig Ziglar, I met the challenge head on and I did the right thing for my siblings.

I managed to salvage the sale of the trust owned property, I found a bridge loan for my sister, so she did not have to forfeit her deposit and lose the home she and her husband wanted, and I made it possible for the tenant to get new preferred loan terms from their lender.  It was the best solution for everyone, even though I personally had to give up a lot financially to make it happen.  But I absolutely don’t regret the decisions I made at my own expense because I kept my relationship with my siblings in good standing.

And that’s the same advice I would give anyone who is a trustee or an administrator to an estate: Do the right thing!  Benefiting yourself at the expense of others is a recipe for broken relationships and poor reputations.  In the long run, the potential financial gains are never worth the lifelong costs of bitter hurt feelings, and family rifts that can sometimes last for generations.

My name is Dan Collins, I act as a “fiduciary broker” in probates and trusts that involve real property assets.  To learn more, please visit my website: probte-realtor.biz

Thank you for joining me today.

Overcoming Bad Advice from an Attorney – Fiduciary Broker Vlog #4

Hi, I’m Dan Collins – a Sacramento, California licensed real estate broker with expertise in real property matters involving Probates and Trusts. I am also a California licensed general contractor and I act as court appointed receiver administrator for the Superior Court.  If you have found yourself tasked with being an Executor administering a Probate or a Trustee in an estate, I can help you effectively execute your duties that attorneys do not help you with. To learn more, please visit my website: probate-realtor.biz

I am going to share a story about an attorney who asked me if I would be willing to serve as a Court Appointed Receiver. The attorney was called by a man whose siblings and he were involved in a trust litigation matter involving trust owned parcels of land. He was approached by this beneficiary who wanted his sister, who was acting as the Trustee to the estate, to take appropriate steps to sell some trust owned land parcels in the San Francisco Bay Area.

To determine if a receivership action was going to be effective, I performed some preliminary diligence and investigation about the subject land parcels, as well as the real estate brokers who had been trying to sell the parcels for over a year.

Because of my 30+ years’ experience entitling raw land for development both as an investor and as a real estate broker, I quickly saw why the Trustee had not been successful in selling the land parcels. To be truthful, neither the Trustee nor the real estate brokers were qualified to correctly position the land parcels for sale to a developer or perspective individual custom home builders.

Had the Trustee hired a qualified and experienced real estate broker to market the land parcels for sale, the litigation would probably have been avoided. But, because litigation was under way, the most expedient resolution would have been the appointment of a qualified Receiver who had experience in land entitlement and building speculative homes, because the land parcels highest and best use was single family home development.

I reported back to the attorney who had expressed an interest in nominating me as the receiver and outlined the problems in the current approach employed by the Trustee. The attorney then called his prospective client and told her that he felt I would be well qualified to expedite a resolution to the trust litigation and then find an experienced land broker to market, enter into a contract of sale, complete the necessary buyer’s diligence and close the sale with a Receiver’s Deed.

Unfortunately, some bad advice from an attorney thwarted the plan.  One of the siblings had another attorney who told her it would not be possible to have the Court appoint a receiver.  Of course, that was nonsense.  In my opinion, that attorney did their client a disservice by not giving advice that would have been in everyone’s best interest – best for everyone but the attorney, of course!

I believe attorneys should, like many other professions, work in areas where they have real expertise and stay away from areas where they are not competent. Many attorneys do not realize the equity benefits of employing a neutral Receiver in litigation to allow expedient resolution to conflicts.  In other cases, some attorneys may not want expedient resolution because they only get paid so long as the conflict goes on.

If your attorney advises against using a receiver or seems disinterested in finding an expedited resolution to a problem, how can you overcome that bad advice?  Give me a call.  I’ll either help you find a different attorney, or explain to your attorney how beneficial it can be to appoint a neutral third party to resolve litigation.  Don’t let an attorney needlessly drag things out.  Remember, in a protracted litigation, the attorneys are usually the only ones who benefit.

My name is Dan Collins, I act as a “fiduciary broker” in probates and trusts that involve real property assets.  To learn more, please visit my website: probte-realtor.biz

Thank you for joining me today.

A Needle in a Haystack – Fiduciary Broker Vlog #3

Hi, I’m Dan Collins – a Sacramento, California licensed real estate broker with expertise in real property matters involving Probates and Trusts. I am also a California licensed general contractor and court appointed receiver for the Superior Court.  If you have found yourself tasked with being an Executor administering a Probate or a Trustee of a Trust estate, I can help you effectively execute your duties that attorneys do not help you with. To learn more, please visit my website: probate-realtor.biz

I’m calling today’s program “A Needle In A Haystack” because I want to draw your attention to the need for Probate Administrators & Trustees to search for important documents amongst a loved one’s personal effects when they become incapacitated or, upon death.

I was recently reading the editorial in Sacramento Magazine entitled “The Stuff of Life.”  The editor, Kristina Minard, shared a story that involved two generations of family members passing away and searching for important documents and dealing with the daunting task of removing their personal effects from their homes. It started with her husband’s parents. The story told how a week after her father-in-law died her husband and his brothers cleaned out his garage. She described a Grapes of Wrath worthy pile of junk in the truck being hauled to the dump.  But not everything went, her husband kept a compressor and some hand tools that came to live in her garage.

When her mother-in-law, who had dementia, was placed in an assisted living facility, she and her husband’s family emptied the house so it could be rented; which is a good way to offset costs of her mother-in-law’s assistance with her daily living requirements as well as a good strategy to not incur an avoidable taxable event if they sold the house before her mother-in-law died. She commented on the fact she does not remember what happened to all the furniture, housewares and music boxes of photos – she thinks her brother-in-law dealt with all that – but she knew what happened with all the boxes of paperwork from the back bedroom — they ended up in her garage.

She described weeks of painstakingly culling through the boxes of “nicotine-fumed sheaths” of paperwork looking for important documents – the figurative ‘needle in a haystack’. Just as she was tiring of the process and contemplating taking everything straight to a shredding service she discovered – between a retail store receipt and a financial statement from 1974 – the pink slip to the vehicle sitting in her mother-in-law’s driveway that they wanted to sell.

Then, her sister’s husband died. She described how her sister spent more than a year carefully tackling what to keep, what to donate or scrap. Her sister scoured the closets, the spare bedroom, the garage, and the man cave under the house looking for important documents and sentimental items before she jettisoned the rest of the personal property.

The comparative description of time spent on pre-estate administration of a spouse passing away, versus estate administration upon the passing of the last surviving spouse is very telling and quite common: Daughters and sons who accept duties to act as probate administrator’s or trustees have busy lives with families, careers and obligations just like we all do. And, they often find they do not have the time necessary to thoroughly search, locate and assemble probate or trust assets, pay all taxes and legitimate debts, to protect the residue, and to distribute it to the beneficiaries designated in the will. If you believe the probate or trust attorney will do all those things, you will be disappointed to learn they do not.

I have in depth experience in dealing with the “nuts and bolts” fiduciary duties and obligations of an executor of a probate, or acting as a trustee for a trust in administering an estate. I have personally acted and continue to act in the capacity of personal representative of probate estates and trustee for trusts involving estates and special needs trusts.

If the estate you have been charged with administering is in any way complicated, you have the right to hire an array of experts to help you – probate/trust lawyers, appraisers, bookkeepers and accountants, real estate brokers and financial consultants – and to pay their fees from estate funds. If you realize your time is limited and you require the assistance of someone with an orderly mind, life experience, and an understanding of fiduciary duty I can help you.

My name is Dan Collins, I act as a “fiduciary broker” in probates and trusts that involve real property assets.  To learn more, please visit my website: probte-realtor.biz

Thank you for joining me today.

Nobody’s Home – Fiduciary Broker Vlog #2

Keeping Vacant Homes Properly Insured in a Probate or Trust Estate.

Hi, I’m Dan Collins – a Sacramento, California licensed real estate broker with expertise in real property matters involving Probates and Trusts. I am also a California licensed general contractor and court appointed receiver for the Superior Court. If you have found yourself tasked with being an Executor administering a Probate or a Trustee of a Trust estate, I can help you effectively execute your duties that attorneys do not help you with. To learn more, please visit my website: probate-realtor.biz
The title of today’s video is “Nobody’s Home” because our subject is about insuring real property in an estate when the property is vacant. Properly insuring a vacant home or income property is the one of riskiest areas of fiduciary responsibility where an estate Executor of Probate or a trustee of a Trust has fiduciary liability. If you serve as a Probate Administrator/Trustee you have a fiduciary duty to properly insure that high value asset – real property.
Your insurance carrier for the home or building that is vacant must be told within 30-days of a property becoming vacant that it is not occupied, or you risk not having otherwise insurable losses covered if you submit a claim. A phone call to your insurance agent informing them the property is or will be vacant is all that is required.
Is it more expensive to insure a home that’s vacant? Actually, yes, it can be because fire, vandalism and, burglaries, among other bad things, are more likely to happen when nobody’s home. If no one lives in the property and a water pipe breaks it may be days or longer before it is discovered. Whereas, if a pipe breaks in a property that is occupied it may be hours before it is discovered but it will usually be discovered quickly.
So, remember, if a home or an income property is vacant, you must have proper insurance coverage in place. It is critical to inform the insurance carrier that the home or income property is vacant. That includes a vacancy between tenants for income properties.
I recently served as a Fiduciary Broker in an Estate that included a vacant single-family home in San Francisco where the decedent had lived. The Trustee hired me in my capacity as a Fiduciary Broker to market the property for sale and to assist her in properly covering all the necessary matters of responsibility required from a person who administers an estate. The first piece of advice I gave the new Trustee was to call the insurance broker to inform him or her that the home was vacant. The Trustee looked through all the files in the home and she could not find any evidence in the decedents records that the property was insured. In fact, it turned out the property was not insured at all!
Believe it or not, this is not uncommon. The decedent had no mortgage on the property. She had owned it free & clear of debt. Retired people often own their homes outright, free of debt. And, it is not uncommon that over time insurance policies may lapse and older people forget to replace insurance policies to protect their homes. I had the property appraised which is a good idea for many reasons when administering an estate, and its value exceeded $1.5M. If there had been a catastrophic loss such as a fire and the home burned down, there would have been no insurance policy in place to replace that valuable asset.
I made certain the new insurance policy covered the home as a vacant structure because if that information had not been provided to the insurance broker the new insurance policy would not have covered the home if it burned down.
My name is Dan Collins, I act as a “fiduciary broker” in probates and trusts that involve real property assets. To learn more, please visit my website: probate-realtor.biz
Thank you for joining me today.