A 7 Action News Investigation is prompting new legislation in Lansing. Now Attorney General Bill Schuette is throwing his support behind the proposed new laws that will reform the Public Administrator law.
The 7 Investigators have been exposing a disturbing pattern of some public officials and real estate brokers taking over probate estates after someone dies, often leaving the rightful heirs with very little.
“We want to make sure that if you lose a loved one, you aren’t placed in jeopardy again of losing the home you live in, running into financial difficulties. That’s not good practice,” said Andrea Bitely, Communications Director for Schuette. “The Public Administrators that have previously ignored the rules that we put in place have either resigned or been terminated.”
Macomb County Real Estate Broker Ralph Roberts had been teaming up with some Attorney General-appointed lawyers called County Public Administrators. The Public Administrators and Roberts’ company called Probate Asset Recovery billed the estates for thousands of dollars, plus Roberts got the real estate commissions when he sold the homes. Documents obtained by the 7 Investigators showed that Probate Asset Recovery often billed for 1/3 of the value of the estate.
Many of the homes were in foreclosure or behind on taxes.
“Recent actions by a handful of individuals has made it clear that it is time to make changes to the public administration system in Michigan,” said Schuette. “The current law has not been updated in nearly 40 years and while most abided by the law, the abuses that occurred and the families who lost homes and inheritances cannot be undone. It is our job to make sure it does not happen again. This new legislation will make the necessary changes to ensure there is a direct path to follow in the probate process and will help ensure heirs are better protected.”
Under the current law, 42 days after someone dies, a Public Administrator can open an estate in probate court in the deceased person’s name to handle any assets. The Public Administrator then bills the estate for legal fees.
Two new bills have been introduced in the state House of Representatives.
One bill (HB 4822) would keep real estate and asset recovery fees to no more than 10% of the net proceeds from the estate. The bill would also require the Public Administrator to give notice to the County Treasurer if the decedent’s property is facing tax foreclosure. This bill is sponsored by Rep. Jim Ellison (D-Royal Oak), Rep. Robert Wittenberg (D-Oak Park), and Rep. Tim Sneller (D-Burton).
Another proposed bill (HB 4821), sponsored by Rep. Jim Runestad (R-Highland Twp.) and Rep. Peter Lucido (R-Washington Twp.), aims to extend the number of days from 42 to 93 days, giving heirs more time to open their own probate estates.
“They’re going through a hard time – let’s not make it harder for them. Let’s give this a little more time. Let’s let people really evaluate what’s going on with the property that they may be living in, they may be debating about selling on their own, and getting their affairs in order,” Bitely told 7 Investigator Heather Catallo.
Proposed changes to the law also include strengthening the notice requirements for heirs if a Public Administrator is planning to open an estate, including making it a misdemeanor if they fail to notify heirs. The changes would require Public Administrators to provide a statement describing why the heir is receiving the notice, and information telling the heir that they can petition the court for a hearing on any matter at any time during the estate’s administration.
The bill would also require the Public Administrator to include a statement detailing their search for heirs. Many heirs have told the 7 Investigators that they never received notice from the Public Administrator that they were taking over the estates.
“They are basically hoodwinking those relative into getting out of the picture,” said Oakland County Treasurer Andy Meisner in April.
Meisner and Oakland County Clerk Lisa Brown helped bring together this bi-partisan group of legislators to try to change the law.
“You don’t find out there are some holes until somebody learns how to skirt the law… and you realize that things need to be tightened up to stop these predators,” said Brown.
“I feel really good about Probate Asset Recovery. And I’m going to help get assets for people all over this country,” said Roberts in November 2016.
“You feel good about it, but I’ve got several heirs that say you are preying on people in a time when they’re grieving. And you’re taking things from them,” asked Catallo.
“I’m not taking anything from anybody. I’m helping them get things,” said Roberts.
Federal agents and Oakland County Sheriff’s investigators recently raided Roberts offices, and seized records and computers. That criminal probe is ongoing.
A hearing on the bills will be held on September 19, 2017.
Stay with www.wxyz.com for the very latest on this proposed legislation.
If you have a story for Heather, please email her at hcatallo@wxyz.com or call 248-827-4473.
