Since Nov. 2016, 7 Investigator Heather Catallo has been exposing several loopholes in the law that allowed real estate brokers and Attorney General-appointed lawyers called Public Administrators to open probate estates after a loved one dies. Catallo’s relentless reporting showed that Macomb County real estate broker Ralph Roberts and his company, Probate Asset Recovery, used that power from the courts to sell the homes and take thousands of dollars from the probate estates.
After the 7 Investigators exposed this, Attorney General Bill Schuette shut the practice down, and supported the changes to the law.
“Actions that came to light last year made it clear that now is the time to make changes to the public administration system,” said Schuette in a statement Tuesday. “What has happened in the system is unacceptable and these changes to an almost 40-year-old law will help ensure this never happens again. By creating a clear, current and direct path for public administrators to follow in the probate process we can better protect Michigan citizens and weed out any bad actors.”
“Establishing a more transparent process for the appointment of a personal representative when no heir can be located will prevent future fraud schemes and prevent these fraudsters from praying on innocent heirs,” said Jim Runestad, R-White Lake. “Public administrators do good work to help our citizens and these reforms provide further safeguards when families are grieving.”
Oakland County Sheriff’s detectives are also now conducting a criminal investigation into these practices.
In May 2017, Oakland County Treasurer Andy Meisner and Oakland County Clerk Lisa Brown connected with a bi-partisan group of lawmakers to close the loopholes. Two bills sponsored by Rep. Runestad and Rep. Jim Ellison (D-Royal Oak) were signed into law Tuesday.
Meisner is pleased the bills passed, especially since several probate judges and lawyers opposed the changes to the law.
“We reached out to the probate bench and to the bar, and solicited their input about it,” said Meisner.
“Despite our reaching out, they didn’t connect with us, they didn’t provide any feedback – and then they submitted a letter before the committee hearing opposing the legislation… It reflects poorly on the probate bar and the judges that they came out against the legislation, and I hope in the future when they’re confronted with this sort of obvious wrong doing that they take the stand of the people.”
Here are more details from Public Act 13 of 2018:
-Heirs will now have 63 days instead of 42 days to open a probate estate, before a Public Administrator can open the estate;
-A formal hearing is now required for a Public Administrator to be appointed;
-If an estate includes a piece of property in tax or mortgage foreclosure, PA’s must post a notice of the court hearing on the property at stake and prove that that they diligently searched for heirs.
Any Public Administrator who intentionally fails to give proper notice can now be found guilty of a 90-day misdemeanor.
Here are more details of Public Act 14 of 2018:
-Public Administrators must give a written notice to a county treasurer’s office if there is property in the estate that’s delinquent on property taxes; then the treasurer can make sure heirs who are on tax payment plans receive notice of the opening of the estate;
-Public Administrators must now give the courts copies of the settlement statements from the sale of real estate;
-Public Administrators will now have to get court approval before selling a property that they represent, and if an heir is living in the property, the State Public Administrator must be notified.
The changes to the law also cap real estate fees and the fees related to identifying estates to only 10% of the net proceeds from the property sales.
The 7 Investigators first exposed that Roberts and PAR were often taking 33% of the total value of the estate, plus 4% in real estate commissions, as well as other charges invoiced by Roberts various companies.
The bills passed the House and Senate very quickly, and the law will take effect in 90 days.
“It is an example of democracy working the way that it’s supposed to work. The interplay between the government sector and the media -- this a great example of how it’s supposed to work. The media providing some transparency, and then the government working to act to address the issues the media brings to bear. And so in this time where the media is under such vicious attack, I think it’s a good reminder to people across the state and the country that the media is trying to help us tell the important stories like this one,” said Meisner.
7 Action News Investigation prompts probate law change, protects heirs