After the 7 Investigators exposed an alarming practice in the local probate courts that often left legitimate heirs saying they felt ripped off after losing a loved one, Michigan’s Attorney General suspended a major part of this practice.
Now the state’s top law enforcement officer is demanding change, and so are some of the judges who’ve watched this unfold in their courts.
Many local families say there were outraged to learn that some Attorney General-appointed lawyers called Public Administrators have been teaming up with real estate broker Ralph Roberts to cash in on probate estates after someone dies.
“I find properties. I believe there’s a benefit, so I then tell a public administrator, here’s the benefit there,” Roberts told 7 Investigator Heather Catallo in November of 2016.
During the last 4 years, Roberts has regularly worked with Public Administrators in Oakland, Macomb, and Wayne counties to open probate estates. The lawyers bill the estates for thousands of dollars in fees, and court records show that Roberts’ company, Probate Asset Recovery, often tried to take 1/3 of the value of the estate. Roberts also scores real estate commissions by selling the houses that belonged to the person who died.
“We can’t have people taking advantage of things,” said Attorney General Bill Schuette.
After we exposed this practice, the Attorney General suspended all Public Administrators from opening estates with a home facing foreclosure or back taxes, and his office is now doing a top to bottom review of the Public Administrator rules.
“I think the message is, you’ve got to play by the rules,” Schuette said. “From my standpoint, number one, we may need to change rules and regulations within the process. Secondly, we may want to seek some statutory changes.”
“It rips off the families and that’s just not acceptable,” said Wayne County Chief Probate Judge Freddie Burton, Jr.
Judge Burton says after his judges started noticing the massive fees going to the asset recovery company, he issued a letter to the Public Administrator who was working with Roberts, insisting that PAR must account for actual work done on an estate.
“They don’t have any certification of any kind, they don’t have any particular standards, and then they want to charge 33%. It’s patently unfair,” said Judge Burton.
For example, in one Wayne County probate estate from 2014 that involved a pricey Northville condo, court records show Roberts’ Probate Asset Recovery filed a claim asking for more $80,017. The Public Administrator got $18,621.15. And real estate records obtained by the 7 Investigators show Roberts got an additional $11,300 when he charged a 4% real estate commission on the condo sale, plus his construction company billed for another $335.05.
Judge Burton says the Attorney General should terminate this practice of allowing 1/3 of the probate estate value to go to an asset recovery company.
“I would hope that we continue to insist that we not have Public Administrators be used for this kind of process,” said Judge Burton.
In addition to the review by the Attorney General, right now new legislation is being drafted to change the state’s Public Administrator statute, so the loopholes in the law that allow this can be closed. It’s expected the legislation will be ready for introduction in a couple of months.