Addressing Complex Borrowing Challenges: Success Stories from First Probate Loans
By Jonathan Brooks, President
First Probate Loans
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.
· 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.
STRAIGHT NOTE LOAN PRODUCT
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.
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.
PFAC ANNUAL CONFERENCE - 2021
I am proud to again participate as a Bronze Sponsor of the PFAC 2018 Annual Conference this year at the Hotel Del Coronado, California, August 25- August 28, 2021. To obtain more information about the 2021 PFAC Conference news via email, click here.
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 title reports. The company provides complimentary property profiles, recorded liens and last vesting deeds, upon request (jonathan@firstprobateloans.com).
PLEASE CALL (310) 487-6944 TO DISCUSS YOUR CLIENTS’ SPECIFIC ESTATE NEEDS.
