0:02 Who are you? And where are you going? What do you want? [Music] Hello and welcome to Trust and Estates Weekly. I'm your host, Kevin Bemel, and I'm here every Monday at 10:00 a.m. Pacific time. And if you're thinking, "You look different." Yes, I do look different. I got new glasses on Friday. They are now rimless. I don't look like Po Dexter for those of you who are old enough to remember who that character
0:37 is. So, but in any event, uh we're kicking off a new week here and I'm very happy to have as my guest Mark Harris who is the CPA uh CEO of a company called Probate Cash. So, this is a new topic for Trust and Estates Weekly. If you've watched my friend Bill Gross's show, uh, Probate Weekly, which I know sounds suspiciously like the title of my show, that's because with Bill's consent, I borrowed his title and changed it a little bit, but Mark has been a guest on Bill's show, I think, a
1:14 couple of times. And, um, in in talking to Bill, he said, "You really, you got to have Mark uh, on your show. This is a very important topic and it's something that people need to know about because it can really help people out, but also there's there's a way to handle what's sometimes called a probate advance in a way that um makes sure that that that people are protected um and not being taken care taken advantage of by the bad actors. So So Mark, uh first of all, thanks so much for for coming on the
1:49 show this morning. Thanks for having me, Kevin. I appreciate it. And uh I I did enjoy being on Bill's show and I'm glad glad you all are good friends. So uh love it.
2:00 >> Hopefully a helpful conversation today.
2:02 >> Yeah. Yeah, absolutely. So I you know I I want to start out by asking you a question that I I mentioned when we were just chatting before uh we went live. I I was uh I met someone on Saturday who's a trust administration lawyer and I was asking her how she got into that and you know kind of like uh you know I just sort of ended up here. Uh she started out as an M&A lawyer and I think it's it's interesting for viewers to to how did you end up um starting you know probate cash? I mean it I imagine you
2:37 know when you were 12 and growing up you I don't think I suspect you weren't thinking to yourself I want to start a probate advance company when I grow up. So
2:47 >> I'm still waiting for the Boston Celtics to call me. Okay.
2:50 >> That was the original dream when I was 12 in the driveway. Um starting to come to terms that may not happen. So I I went to law school and uh I uh after law school I actually started working at companies that did factoring factoring future cash flows.
3:10 >> Okay.
3:11 >> So as opposed to doing more traditional law right off the bat I was suddenly in-house counsel where we were in in uh in companies that were providing upfront liquidity to people in exchange for their future cash flows. So, initially it was lottery prize payment streams. So, if people won won the lottery, if you won the lottery in California or just about anywhere in the country, uh a a real lottery, not a $100 lottery, but you know, a seven figure lottery or so, you'd be paid in an annuity. And uh that was it. There was no choice. And most
3:46 people never even knew that. They won the lottery. They thought they were going to go get a check for a million, two million, whatever it was, when in fact they're going to be paid over 20, 25, 30 years. and and tax withholding. So, uh so that was a shock to a lot of lottery winners and we would so what we would do is provide them upfront cash against their future cash flows. Um then it became structured settlement payment rights. uh we I've been involved in that and then any other kind of uh future cash flows that that are going to be paid by uh an insurance company, estate
4:21 commission or in the probate case and a personal representative of an estate and uh what happened is through the natural course I have a lot of friends who are are attorneys and they they practice probate, family law, personal injury, all it and one of the common themes is their clients are are calling them asking when is this case going to get settled? When is the probate going to end? When when can I get my money? I need money to live on. I was counting on this.
4:52 >> And uh there were no answers except for the court takes a long time. So
4:56 >> yeah,
4:57 >> uh we found a way uh to provide upfront cash against potential lawsuit uh claims and uh with probate against an inheritance. So, uh they're they're nonreourse advances, but uh which which means we make these advances and uh and have a lot of lawyers watching this show. So, uh we we take all the risk the inherent risk of a probate which are claims uh challenges to the will, anything like that. And if uh there there is something that occurs in the natural uh uh
5:34 progress or slow progress of the probate, that's a risk we take. And so if we can't get paid back, uh, we have no recourse against anybody in those situations.
5:43 >> Right. Right. So it's it's interesting when when you mentioned factoring, uh, that really sort of brought this all into alignment. So just a my what I call Kevin 1.0. I had a real estate company here in uh, Los Angeles and I had a specialized appraisal practice. Um, and I dealt with a lot of assetbased lenders and and other lenders in the sort of nontraditional business lending area. And so, while I I never did any collateral reviews for any factors, I knew a number of people in
6:19 the factoring business um because again, it's all part of the non-traditional business lending. So, that that makes a lot of sense. Um, and and and and also I want to highlight that point. So, this idea of nonreourse. So this this is I think this is a a a key aspect of what you do because if if I'm an heir and I take an advance against my inheritance and then for some reason the amount of my inheritance either doesn't materialize or is short. It sounds like you know you get what you get from from
6:55 the probate but but you can't come to me to collect a shortfall. Is is that essentially what you're saying?
7:02 >> Correct. absent fraud. Of course, if if you were to get paid your inheritance and just didn't want to pay us or something of that nature or made some misrepresentations to us, that would be a different story. But yes, otherwise we are are taking that risk and the other benefit that it's these are non-reourse advances as opposed to loans. So, uh, of course, a lot of the people who need upfront money from us against their inheritance, uh, don't have the necessary credit to obtain a loan from any traditional kind of lender.
7:35 >> Uh, they wouldn't be able to pay back the loan with certain payment dates because they're waiting and uh, counting on the inheritance to pay us back. So, there no payment dates, there's no interest rate tied to this u, and no collateral. And so it's it's it's for folks who need need money against their inheritance but couldn't get it other any other way or perhaps they could get it. Maybe they do have a an okay credit but they don't have the time and our company can usually fund beneficiaries of estates within 24 hours.
8:10 >> Oh that is that's very fast.
8:14 >> Sure. In the mode of because we're we're looking at basically a couple things. Number one, just like any any purchase of property or a car, whatever you're buying, number one, are you indeed an ear to the estate, right? Do do you have what would be in effect title to the property or something like that? Are you really entitled to inheritance either in a will that we're looking at or in the line of intestasy? So, we check that box. Check. And then two, what is it that we uh believe or you believe and we believe with our underwriting that you will be entitled to at the end of the
8:49 day. So, usually it's the sale of a piece of property. Uh that's oftentimes the significant asset of the estate and that's also why it takes a while for the estate to close. Not only is it a uh the only asset of the estate, but nobody can sell it until letters are obtained in in the probate court.
9:08 >> And uh it takes time to sell a property. So that's all so far. And um in order to you know verify that status as as an heir uh do you require that a probate already be open or are you willing to you know literally look at a will and and in essence make your own determination as to the validity of that will and the and the status of an individual a as an heir under that will. Yeah, that's a good question and that's
9:43 uh there I'll modify the answer a little bit to that question, but the uh we most of the time we are making advances to a in a situation where a probate case is already open.
9:56 >> Okay.
9:57 >> Uh however, the will may not be admitted by that time. We may see a will, but it may not be officially admitted and we'll still actually make an advance. Um there are times also and we have relationships with lawyers throughout the country that uh um a lawyer may have a an estate they're representing and they they understand that there's a property there. They've talked to the beneficiaries. Somebody's going to be coming in and they're going to open up the open up the probate, but they haven't opened it up yet. But based on the lawyer's representation, I'll maybe give a small advance to the beneficiary in anticipation of that probate being
10:33 open. Um the uh uh I'll get to the the part of of the process, but it really helps to have the probate case open because we file and in fact in California we're required to there's a California statute governing inheritance assignments, but we need to actually file the assignment of the inheritance with the probate court. So in California, it's required by statute. It's the probate code 11604.5. So 11604.5 is the probate code that governs inheritance assignments. In the
11:10 states where there is not a statue which are most of them uh we still follow the spirit of the California statute which has as you can imagine significant consumer safeguards and so we uh we follow that spir that spirit and uh refile assignments uh in in the probate court and we also do everything we can to talk to the estate attorneys. We want no surprises. So it uh certainly is much better if everybody knows that there's a beneficiary taking the assignment and what's going to be paid back. So to to really digress into the weeds here for a minute, I'm assuming then that uh there
11:47 is no provision in the uniform uh probate code I think it's called that addresses uh probate advances because I know for example there was a provision written into it now I think it's maybe about 10 years ago about digital assets that has since been adopted by gosh probably 30 35 of the 50 states plus, you know, the territories. So, so somehow this hasn't found its way into that, I guess, yet, huh?
12:18 >> Yeah, it'd be a lot easier for everybody if it were. It's uh So, uh California has a a statute in the code. Utah just recently got one. Um and so otherwise, it's pretty much the wild west in that sense that there is no statute. And that's that's a problem a lot of times because I I don't want to really proceed unless I have the cooperation of the attorney who represents the estate. If I have an attorney who doesn't represent the estate and doesn't understand what we're doing and doesn't uh want to get involved, it's a problem for us. It's a
12:54 problem for the beneficiary of the estate who needs the money. Uh but I'm concerned that's going to lead into a messy situation even when I'm filing the assignment. So, and in California where there's the assignment, a lot of California probate attorneys are familiar with at least that there is an option for ears to obtain advances against their inheritance. Um, they may not love the business. They may not want beneficiaries to do it. Uh, they may have or they may actually embrace our business because it takes the pressure off of all the phone calls they're getting from beneficiaries.
13:29 >> Right? So we have you know some of each group but uh as is what our message is to folks to professionals especially is you should know about us. You should at least know we exist. So when you are fielding those calls, your parillegal is fielding those calls, your personal representative is fielding those calls. I mean, people have real life issues and they need money. And while it may not be something that you would ever need to do as an attorney, uh probably you wouldn't need to do it. Therefore, you can't imagine someone uh taking an advance. There's a whole group
14:04 of people who really need the services. And to be able to say, "Hey, call these folks up. Um and I'm an attorney. Uh and so call call them up and see if it works. See if it's uh if it's something you want to do." And we're certainly a no pressure organization. This is either works for people or it doesn't. And there's there's not a lot of selling to try to engage somebody for our services if they don't need it. It's just it's it's not that kind of a business. It doesn't work unless the person needs it.
14:34 >> And you mentioned too that it could potentially be an intestate situation. So with a will at least presumably your potential the person potentially taking the advance is named in the will in an intestate situation right there's the they're you know they're either a an heir under the laws of the particular state in which the probate is going to occur or not but but that's not always I think crystal clear. So, how do you deal with that situation in terms of doing your due diligence as to whether
15:09 someone, you know, from from Probate Cash's perspective qualifies uh, you know, at least potentially as an heir to an extent?
15:18 >> Yeah, that that is a tricky situation even when we think we've got it figured out. Sometimes there's uh that sibling that appears from uh that nobody told us or it's there's no will. So there's a race by a sibling to open up an estate and hope they're going to get all the money and not tell anybody about it. So we it when it's in test state, we we really do want to have have that conversation with the estate attorney. Uh we are learning all the information both from the potential beneficiary who wants the advance, the estate attorney
15:53 and seeing um you know what what hasn't filed. will want to see in in those situations almost always that uh there there is no will that it's intestate and here's the tree the family tree that uh is is usually filed uh to to show who gets what and so we're we're we're treading more cautiously. our advant we're um you know the other part Kevin that discussed is that we do not normally purchase the entire inheritance of somebody
16:22 >> it's almost exclusively a portion of somebody's inheritance. Uh number one it's uh just a a risk factor. Number two though we also like to keep everybody engaged in the final result even the beneficiaries. So, um, even though they may not have any legal, uh, rights to to the estate itself as a personal representative, but we we find it best to have them, uh, excited for the final result where they're still going to be receiving an inheritance.
16:55 >> Um, as each step, uh, our comfort level of providing a a more significant advance depends on where we are in the probate. So if the if the will has not been admitted, letters haven't been issued, we're probably going to give a much smaller advance of what would be uh the inheritance that our beneficiary would receive. Uh the claims period is another step. We're going to still be cautious because claims can come come in and wipe out the beneficiary's inheritance, which would in turn could wipe us out. Um, in California, you've got Medicaid out there, medical that can
17:32 come in and and knock us out and they can come in anytime. Actually, they can come after the claims fair. So, very very uh harsh lessons we've learned in this business.
17:42 >> Yes. Yeah. I mean, you know, in in the sort of, you know, panel of lending slashadvancing funds, this strikes me as being, you know, certainly on the much more risky end of the spectrum than, you know, if if the safest thing is, I don't know, you know, a home mortgage, right, or something like that, right? Where, you know, you you've got real estate as collateral, you can get an appraisal, you can get title insurance, all that kind of stuff, right? you're you're you're in a much more vulnerable or not you per se, but probate cash is in a
18:18 much more vulnerable position. It it it it seems to me.
18:23 >> Yeah. And that's that goes with uh is the part that we don't uh require a credit check and we don't require collateral. We are at the mercy of the inheritance that the heir is eventually going to receive. And then the kicker of our business is even if we do everything right, the personal representative who is often a sibling or just another family member has to pay us. Now in California, there's a court order and presumably the personal representative will follow those instructions. Presumably, they're still talking to their attorney who's been representing
19:00 them throughout this ordeal, but not always. And so we um we are we we have a staff we have a bunch of underwriters here who are looking at the cases where uh beneficiaries won in advance. So, we're underwriting the cases themselves and talking to estate attorneys. And then we have folks after we make an advance, we are following the progress of the estate. And uh we're as as we're following the progress of the estate, we know when the uh the property is about to be sold and uh when the petition for final distribution, we're checking to see if we're in it in California to just kind of remind all the parties that uh
19:36 we have this assignment here and to pay us. So, you have to be on top of that. the risk are the like nothing else I've really ever seen in the lottery business and we made advances or consle advances we had court orders actually designating us as the new payee of the monies that we were buying each period
19:57 >> and uh then the person or entity responsible for making payment to us was estate lottery commission a aaa rated doublea rated insurance company I mean what you you weren't concerned about just not getting picked. It is uh very professional. In this business, you have that concern. So, it's as I as I go home and my wife says, "How was work today?" I said, "Oh, great. We uh we handed out $100,000 today in advances." She's like, "Wow, that's fantastic." Like, "Yeah, we'll see. Ask me that in nine months to a year from now."
20:28 >> How much of it comes back?
20:30 >> Right. Remarkably easy to give money away.
20:34 >> Yeah. Yes. Yes. Yeah. I imagine that in a way that is the easy part of the business, right? Yeah. Um, so, oh, and then I had a follow-up question I was going to ask you about that. Oh, yeah. So, given how risky your position is, you you mentioned kind of at the beginning that um Oh, actually, you know what? Let's let's let's take a break real quick, sponsor break, and we'll and I'll come back with that question.
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21:38 today at 2132644396 or visit magnumprops.com. So this is Trust and Estates Weekly and I'm I'm your host Kevin Beml. My guest is Mark Harris of Probate Cash and we were we've been talking about the process whereby uh Mark the PE you know Mark's staff will you know determine whether a particular heir um will qualify to receive an advance and and the sort of the risk inherent in that
22:14 for his company. So Mark, the follow-up question I have for you is having mentioned um a while back that you don't charge any interest for these advances because they are in advance, not a loan. Uh but but nonetheless, you you've got to be getting a return on on the advance somehow, right? So, how how does how does that work and how does the the risk profile of a particular air um figure into how you determine I guess how much
22:49 is advanced versus how much uh the particular beneic how much of the particular beneficiaries inheritance will then be you know paid over to you.
23:00 >> Sure. So, uh, we we have a saying here, uh, that there's facts and circumstances for every transaction. It's pretty amazing. Every every one of these is different. And so, when we're talking about, uh, how much of an advance we can provide, willing to provide and, uh, and and repayment terms. So, yeah, the we do charge fees for the advances as opposed to an interest rate. And the fees are hefty. And that's uh the fees begin usually the standard fees usually begin at 25% of the advance amount and they can go all the way up to
23:35 100% of the advance amount depending upon when we're repaid. So it's it's common for it to be 25% each quarter and then going up 25% each quarter from there with a cap at 100%. That's a common uh uh structure pricing structure. Um and then I I will say this though when the more cooperation because you indicated it's and I have too that this is a risky kind of business uh without collateral and uh and our customer base. So, uh, if I'm getting
24:10 cooperation from the attorneys who represent the estate and the more cooperation the lawyers are involved in the process, then I can adjust the fees to reflect the risk. I mean, those the the fees I just discussed truly reflect the kind of risk our business has. Uh, so if I'm in a situation where I know almost for certain and and I never look, by the way, for legal representations or warranties from estate attorneys, if I uh if I needed that as a requirement, I could shut my doors tomorrow. So, I I
24:47 understand that, but I like to have at least the cooperation so you know, I know who I'm dealing with and I'm not just throwing money into a sewer. I like to see it get repaid. And if I'm having uh productive conversations with the estate attorney and understand the beneficiaries, I'm happy to adjust our fees accordingly uh to help them out. And and you know, as I said, I'm an attorney. Uh most of my friends are lawyers. God help me. My wife's a lawyer. Family law attorney. Really? God help me. And uh so I uh
25:21 >> You're married for life.
25:22 >> Yeah. Mar happily, right, honey? So uh Uh so um I really um you know want to to stress that as an attorney I'm I'm looking to solve problems and that's not just for the beneficiary but for the lawyers and I get it lawyers need to to look good in front of their their clients in front of the beneficiaries and you know our our job is to also once we we do business with an estate we often have repeat business from other estates who are represented by that council because now that council knows about
25:57 And you know that's that's just you know everybody on this call I'm sure does their networking and that's how we do networking from existing customers and and the the law firms that represent them. So uh you know that that's important and as we get to know them better we can adjust our fees accordingly to the situation in hand.
26:15 >> Okay. So and so just to sort of take an example let's say someone gets an advance of $10,000. So, if the if the advance is paid back in the first three months, uh you're going to receive $12,500. Is that correct? Typically on a typical And so then it would go to 1500 or I mean 15,000 1750. So, okay. Got it. Got it. Okay. Right. So, it is you know obviously it is it is expensive money. So, um, are you required to get paid back through the probate or could the
26:52 person receiving the advance, let's say that, you know, something happened and oh, now they have, you know, they have the money available, they don't they don't have to wait for the probate to close, but they could pay it off sooner and that way avoid, you know, additional um fees on the advance. Uh are you agnostic as to how you get paid back?
27:15 >> We we just prefer to get paid back. Uh so the uh you these can be paid back anytime and uh we we we encourage it. Uh we part part of this business is I know how expensive these these can be and they the beneficiaries if they can should strive to pay us back as soon as possible. there could be prelim preliminary distributions through the estate
27:39 >> uh to to repay us or other means if they are able to get traditional financing later on uh then they can pay us back anytime. So yeah, there's no prepayment not not a penalty nothing at all to uh to discourage repayment.
27:55 >> I mean and the reason I one of the reasons I ask is you know you you mentioned that you could in some cases fund in as short as 24 hours. I could imagine there was a situation where somebody really needed the money quickly. This gave them access to that money, but then you know over the next 60 days they they can take out an equity line on their house or whatever and you know so you've helped them solve a problem but on the other hand they don't want to you know let let that advance linger there when they have much less expensive ways of of obtaining that money.
28:28 >> Yeah. La last uh last month we had that exact case. We provided a $200,000 advance um to a beneficiary who really needed short-term money immediately. They their their issue was timing, not fees, rates, but they because they did have good credit, they could obtain a loan. They just didn't have the time to obtain the loan. And so they paid us back, I think, in like 30 days, something like that. So they okay, you know, got uh got that first stage. So given you know the cost of the fees
29:04 um what do you see as being let's say you know good reasons for taking advance as opposed to we'll say maybe inappropriate reasons.
29:18 >> Sure. Um so there there's a bucket full of inappropriate reasons. Um there's a smaller bucket full of appropriate reasons. the uh uh so uh paying expenses on the estate property is a very common issue to pay taxes to pay renovations for to get the property ready to sell. uh you know if you if you represent the estate and you see every a lot of people see cash buyers all over the place which you know is good good for them that's another business but if you're uh
29:54 beneficiary of an estate and the personal representative sells to a cash buyer instead of uh maybe putting $50,000 into the house and sell it for a fair market value which could be double or triple that uh cost then everybody benefits from that situation. And so we often make advances so you $25$50,000 of repairs can be made to the home. Uh that's that's a very common reason. Then the second reason is a lot of our customers and if you have probate attorneys and even trustees on this uh call on this podcast, you know that a
30:30 lot of the beneficiaries never heard of probate. What they know of probate is from watching a movie or television. So, somebody passes away, you go into the lawyer's office and you can't wait for the reading of the will so you can get your house, your car, maybe some cash out of the bank account. And you know, everybody go their merry way. And so, because that's uh their their strong thought and belief that's the way it works, they are counting on the inheritance. I don't I don't think it's ghoully that they're doing that. They're just it's practical. they think they're going to get their money and they need
31:05 it for um for life, life necessities to pay their own rent, to pay tuition for schools, what whatever it may be. So, there a whole bunch of real reasons uh that are are are incredibly valid that they need to know are the options here. And then they can determine, well, all right, just how badly do they need the money versus our fees? And that's something that uh they they should weigh. Um where I would not use our money for is to go take the kids to Disneyland. Um, you know, I wouldn't take it to go see a a Taylor Swift or uh fill in the blank concert. Um, so you
31:40 know, because the money is really expensive. So that's that's why. So you know, and I think it's important to talk to your family about it or talk to an attorney about it. We always encourage all of our customers to obtain professional advice one way or the other. We also before we will make an advance, we do a recorded phone call with our customer and in that recorded call where obviously they know they're being recorded, we uh explain again to them in what's in the contract, how much money they're going to receive and making sure they understand how much they have to repay us depending upon when they repay us. And that's all on a
32:16 recorded call. We do everything in our power to make sure there is no confusion. As I said, we talk also to the probate attorney and then we file the assignment of the inheritance into the court as well. In California, we ask for and and everywhere we ask in California, it's it's given but to be uh we ask for special notice. So, we get noticed on the pleadings as well and uh can follow along. And another benefit for state attorneys and personal representatives because we're following along on the case now those beneficiaries instead of calling your office are can often call us just for the status not to get more money or anything like that uh but just to see
32:52 where things are going and uh you know they're very frustrated and uh again because of my background uh our our folks never say delays are on the attorneys representing the estate or or or judges or anything else. That's just it's it's the probate being the probate. But, you know, the the idea is just to solve problems and money solves problems and and not to make anybody out to be the bad person here. Estate attorneys or or really anyone. Yeah. We're all familiar with probate cases and other other kinds of legal actions. They take
33:28 time and that's if they're non-adversarial.
33:30 >> Right. Right. Yeah.
33:31 >> So it sounds like the the the sort of the dividing line between appropriate and inappropriate if we use those terms is you know sort of needs and wants. Needs being shelter, food, health care. Those those kind true needs, not the things we tell ourselves that we need, right? Those are the in general those are um the the areas where um you you genuinely are solving a problem for someone uh keeping them in their in their residence, keeping them
34:06 fed, those kinds of things, keeping you know preventing a you know, god forbid, you know, serious health situation getting worse, things like that.
34:17 >> Is that I think that's a really good way of putting it. the needs versus wants. Now, the needs versus wants for one person, a need to one person could be a want to us. I I see a lot of times, well, I I need to buy a car.
34:33 >> And you know, that that's when you're saying, do you really need to buy a car? And, you know, if you if you live in, you know, California, where public transport is iffy, in Florida, it's a lot worse. Um, but uh you need a car to get to work and so you need a car to get your kids to school sometimes. So yeah, sometimes in this country especially a car is a is a need, not a want.
34:57 >> Right. Right.
34:59 >> So yeah, that I think that's a very fair way of putting it.
35:01 >> Okay. And you mentioned um the the idea of taking an advance to fix up a property so it can be sold essentially on a retail basis as opposed to a wholesale basis. Uh so do you work with uh executives, personal representatives, administrators of estates? In that case, it's really the estate who's taking the advance as opposed to a beneficiary who's taking an advance
35:28 >> all the time. That's the purpose of the advance. So if we do a we do need somebody under under the statute, it's an advance to a beneficiary and the personal representative is usually a a beneficiary as well. So, we will provide the advance to that beneficiary and then it's often uh an expense to the estate that would be shared at the end of the day. So, if it's a $50,000 repayment at the end of the day and there's five beneficiaries, then each beneficiaries share would go down $10,000 and as an expense to the estate.
35:59 >> Got it. Got it. Okay. So, so it's working its way through the beneficiaries no matter what the use is,
36:05 >> right? I mean it's going to be uh yeah it's going to be a a fee. It's just just like a a claim. Now we do not we're not actually a creditor of the estate. We do not file a claim. So I want to be our that's also part of it. We get paid back last or the attorneys are getting paid. The personal representatives getting paid. Uh creditor approved creditors are going to get paid and then probate cash gets paid. So, uh, we're we're down to the bottom of the pecking order and so, uh, that, you know, that that is I hate the phrase that is what it is, but that is our business. Um, and, uh, but as
36:42 because we're not a creditor, we're just taking an assignment of that, we're kind of in the shoes of the beneficiaries when they get their inheritance.
36:49 >> Okay. That's what I was that's what I was going to ask you. So you're you essentially have um sort of equivalent standing to a beneficiary as opposed to for example an unsecured creditor or correct. So where where I'm want to get involved if the the the personal representative isn't selling the home or acting in a a responsible way then that could be a reason why I'm you know that's why I want to talk to the attorney up front to know if that could be a possibility. Anything can happen, of course, know once it the probate is going on. But yeah, we'll we'll
37:24 sometimes even get involved and ask the court to to force the sale or to remove the personal representative. Uh the usual stuff that any beneficiary would do when things aren't moving,
37:35 >> right?
37:36 >> And um uh Oh, well, that question went away. Um, so when um when you're getting paid how does that process work logistically? In other words, um, is it is the payment coming, you know, directly from the administrator? Is it coming through the beneficiary? So then you're relying on the beneficiary to pay you. what what are the mechanics of you getting repaid?
38:13 >> Yeah. Yeah. Uh that is also a good question. That's uh that's important to us because as you can imagine, we want to almost all cost avoid the money going to the beneficiary and then having to remind the beneficiary that they need to write a check to us. Uh that's not a good way to run a business at all. Right. Uh so we're looking to get paid from the personal representative. The beneficiary in the assignment of their inheritance that we're filing with the court is directing the personal representative to pay us um our the
38:49 money that we're owed before paying the that beneficiary themselves. So usually the checks are coming from the estate, but then the estate will adjust what the heir is entitled to receive after uh we're repaid. So uh it's usually the checks are being written by the personal representative.
39:07 >> Okay. And so um so I I is as as my viewers know I essentially act as a personal representative administrator whatever. So what liability might I have if any if for whatever let's say I I ignore you know the uh you know the claim to pay you and I go ahead and pay the money over to the beneficiary um you know am I for example would you consider that a breach of my fiduciary duty or you know how how would how would
39:45 probate cash respond respond to that situation.
39:47 >> Yeah, that that's a fair question. I mean I in with a personal representative who has in California where there is a statute and they're required to pay us pursuant to order, they would actually be in breach of the order, they'd be in contempt of that order
40:04 >> uh by not paying just as if they forgot to pay a creditor at that point. So, I mean, if a creditor didn't get paid, even though they were supposed to under the order, and it said the money went to the beneficiaries and the creditor was left trying to scramble and call three different beneficiaries to get paid back, I think the creditor would make some noise about the personal representative having uh failed to exercise their um fiduciary duty. And that we're in that same boat for as with getting the inheritance. I mean, there's and they are answering to a court order to pay us um at that time. So, we're we're in the petition for final
40:39 distribution.
40:41 >> So, it'll say probate cash is due. It'll it'll reference John Smith took an assignment uh of $20,000 and the personal representative is uh will pay probate cash $20,000 of John Smith's inheritance. And that is going to be going from the petition uh to final distribution into the order for final distribution.
41:01 >> Got it. Got it. Okay, let's take another quick break and and we'll be back. Probate and Trust TV, your curated source for the most useful and insightful content on estate planning and trust and probate administration. Featuring standout professionals like Bill Gross, Paul Bralet, James Cunningham, and yours truly. Whether you're a lawyer, accountant, real estate professional, or working on your own succession plan, this channel helps you quickly find the clearest, most
41:36 practical content YouTube has to offer. Subscribe now to Probate and Trust TV. Spend more time learning, less time searching. Okay, so we're we're back at Trust and Estates Weekly, and again, I'm your host, Kevin Bemmel. My guest is Mark Harris, the CEO of Probate Cash. We've been really doing a pretty deep dive into the probate advance business uh that that Mark has. So, we were just talking about the the mechanics of how Mark gets repaid, what liability a a
42:14 personal representative might have um if that representative uh fails to to pay Mark. So, um, Mark, next question. How do you handle a situation where, at least when you first underwrote a particular advance, it it looked reasonably uh, you know, straightforward. Um, and then, you know, a creditor pops up. Maybe the creditor, you know, didn't receive notification during the original claim period, right? So now they have they still have at least here in
42:49 California I believe it's 30 days statutoily right to file a claim and now all of a sudden you've got a you know a highly leveraged or even an insolvent estate. So what what happens uh you know from probate cash's perspective if something like that happens? Yeah, I mean that becomes unfortunate and we uh we we we look at that and that that is you know in godfather terms that's the business we have chosen and uh you know that that happens that is why our fees
43:24 are what they are is that is not uh often predictable to see these claims and we we try to predict claims. We ask state attorneys if they anticipate any claims and but who has a crystal ball? you don't know exactly what is there. That's why there's a creditors period and that's that's why there the 30-day uh period as well for creditors who missed it. So, I mean that's that's our business. If it um you know if uh if everything went great, that would be fine, but that's um you know that that would be be optimal, but it's that's just not realistic. But we we in that
44:00 instance we we look and uh we we realize that uh we're not going to get repaid and the beneficiary I mean some beneficiaries see that and say wow this is maybe expensive money but what what if some beneficiaries who understand the risk of probate say wow maybe I'll take $20,000 just in case if 20,000 I mean we talk about needs versus wants but in the uh in a world of nonreourse and who knows what's behind the next door in the probate case um to have $20,000 upfront and then everybody gets wiped out because of a claim.
44:36 Nobody gets to paid an inheritance. If you got the 20,000, you got the 20,000 and there's no recourse that we have against you.
44:44 >> So, okay. And and so following up on that idea of non-reourse and you mentioned, you know, nonreourse unless there, you know, there is a a you know, a fraud perpetrated. So, um, what kind of, um, follow-up investigation, um, might might you do to determine if, say, a partic, you know, the beneficiary who took the advance perhaps knew that that creditor was lurking out there. Um, you know, didn't disclose it. Uh, or perhaps the personal representative knew
45:21 that there was a a potential, you know, creditor out there. um that you know hadn't been notified and and you know now here you are you know sitting presumably sitting with an advance that's not going to be paid back.
45:35 >> Sure. Well um I'm trying to think in all the the many many advances we've made whether a beneficiary knew of a creditor coming down the pipe. I don't think uh I've had that ex experience yet. Although uh potentially beneficiaries who knew they were going to be challenged by another party for uh the uh the inheritance or they were really were supposed to share the inheritance and they were trying to uh claim the inheritance as a sole beneficiary, something of that nature can happen. U as far as the personal representative knowing uh that there could be a claim,
46:12 there is no liability there for the personal representative because a personal representative doesn't often know that we're even making an advance to a beneficiary until after we have filed the assignment in court. Now we and we're really talking we want to talk to the estate attorney, not to the person, not as much to the personal representative before we make the advance. And you know besides the uh personal representative is represented by council anyway. So we want to go through through council if we were going to have any conversations with the personal representative. Uh so we uh there is no liability there with the personal representative. Uh there and
46:47 the personal representative also let me be clear unless they're also the beneficiary who's taking an advance from us they're not in contract privity with us. We're we have no they're not breaching any reps from warranties or any any contract that they have not entered into with us. So yeah, they they do have the fiduciary duty to pay us, but that's you know like any other duties they have as personal representative that they're getting compensated for.
47:12 >> Gotcha. I mean I mean it's it it it is it's an interesting um take that um you know the the personal representative has his own counsel. Sometimes beneficiaries will have their count separate council as well. Um I would have thought that probate cash would look at itself as a principle and so if they wanted to you know be in contact with the PR they would you know as a they would go principal to principal in essence. So
47:45 >> I'm sorry. Yeah. Go ahead.
47:46 >> Yeah. I'm always uh I I like the lawyers to know what's going on because I I assume the personal representatives I'm going to call the attorney and say, "Hey, what is this about?" And I just uh you know, maybe if an attorney is not being responsive after a couple of calls or emails, that may happen. And uh because I I agree from that perspective, I agree that we are a principal to a principal. It's it's more of a a preference and courtesy as a professional to a professional that uh I want to get the estate attorneys involved. I really u I I wouldn't prefer it if somebody called uh my client beh
48:24 with not it's not even behind my back. It's not being sneaky. I just like to know what's going on with my cases and I who wants to be surprised. Well, I I will I will say your your perspective is refreshing because with these kind of matters and I do this for a living, but I would much rather people engage initially with with my lawyer because in probably 80% of situations, I'm going to confer with my lawyer to explore what legal ramifications there might be to a particular situation. And so this is
49:00 just sort of taking care of that whole aspect upfront before we, you know, get down to the substance.
49:06 >> Yeah. I mean, we're we're not there's no trickery involved here. We're providing a service of money uh in exchange for a repayment against an inheritance. We're really trying to uncover facts. We're doing due diligence. And uh we're, you know, personal representatives do have that information, but their lawyers have that information. Um and so uh and we even ask the beneficiaries when we uh when they they do provide an application to us. It's not for loans or anything like that, but we uh have just an application so it has the case number, the county, who the estate attorney is so we can reach out and we also have
49:42 that beneficiary provide us with written authority that we can call the estate attorney even though the beneficiary is not the the client just to just to put everybody's mind at ease. I mean, the the biggest issue, one of the biggest issues in in any business, of course, but especially this, if you've never heard of a company that's making advances to a beneficiary against their inheritance and and you're you're a responsible lawyer in California or elsewhere in the country, you that could be unsettling to wonder who's who's involved in this uh you know, in this pot here. You know, what's going on? And you know, I want people need our service
50:18 and that they they are helped by having the estate attorneys on board at least understanding that this is a real business. They're going to be paid real money. And that way our customers can have an honest conversation with themselves, their family members, or their professionals about whether they want to take an advance. But they need to get at least to that step. And so the, you know, to not involve everybody, especially the professionals, at least to know that we're what we're doing, I it's just bad business to me.
50:51 >> Yeah. Yeah. No, I absolutely agree with that. So, we have just a few minutes left. I I want to address and this is always a little bit um I think difficult if you will. Um and I'm not asking you to you know name any you know names but but we all know in every business there are bad actors right who um don't take the approach for example that you take that you're looking to solve problems you're looking to make sure people are fully informed that you know all applicable laws are not just um adhered
51:27 to but that the spirit of the spirit of the law not just the letter of the law is is adhered to. What do um beneficiaries, what do estate attorneys, even trust attorneys, what do they need to be um on the lookout for when it comes to dealing with uh you know, a a a you know, a company that's doing probate advances. I mean, the of course the first answer is just don't do business with anybody but probate cash, right? that solves that problem, right? So,
52:02 I'll give you I always give my guests a shameless plug because I know they won't.
52:07 >> Speaks for itself.
52:08 >> So, so you want to avoid any problems just, you know, get get in touch with Mark or one of his people at Probate Cash. But let let's just say, you know, for the sake of discussion, right? Um, you know, a lawyer feels that, you know, look, I need to talk to at least whatever two, three, uh, you know, cash adv probate advance uh, companies. What do you recommend they be on the that they be on the lookout for?
52:33 >> Sure. Um, so, uh, one is are, uh, is a company representative contacting you as an attorney or are you just learning about it for the first time from your beneficiary or third party, that could be a sign that uh, a company is not upfront. there's that world that says, "Oh, if a if a professional knows that our fees are high, they're just going to tell the beneficiary not to do it or they're not going to cooperate." Right? That's that needs to be done upfront. Yeah, that's that's often the case. And we do plenty of business with beneficiaries where uh the the estate
53:08 attorneys, as I said, wouldn't do it themselves and and may not even recommend it, but people need money. Uh so, and and that's that's a fair assessment. So I I I think having the relationship with the companies is really important. And I and also once you get to know a company, once you get to know us, you'll feel better that uh we're we're not just doing things the right way, but we're real. You know, I'm I'm I'm a real lawyer. As far as I know, I'm in good standing with the Florida Bar. I'm pretty sure I looked that up. So, um you know, we we have reputations um that we're proud of. Uh a second
53:45 thing I would encourage uh lawyers and other uh even beneficiaries to do is I would um look at Google reviews. Um those actually are very helpful. The Yelps or Google reviews, wherever reviews and see what people are saying because it takes time for people to sit down and put in writing that they uh they receive good service or potentially bad service, but you know, the reviews will be what the reviews are. Um, but we um I actually take some pride in that. Our company takes pride in in reviews because that's really listening to other customers experiences that they had and
54:21 naming who our customers are I think is important. Um, the fact that uh you I'm I'm here sitting with you which I appreciate or I've been on with Bill Gross. I have my own uh webinars I think that's important. Uh the fact that I acknowledge that these aren't for everybody. I'm not trying to shove any advances down anyone's throat. If they don't work, they don't work. If they do, they do. Um, and uh the the fact that I'm trying to get everybody involved on the front end. I don't want any surprises. I've I've rarely ever had a a truly bad experience when everyone has at least been on board on the front end.
54:58 At least know what's going on on the front end. It's
55:02 >> surprises are, you know, save it for birthdays.
55:06 >> Very good. Well, uh, you know, I I think this has been a very illuminating discussion on this topic and and like I said, this is this is the first time I've dealt with this on my show. I really, um, appreciate you coming on and and talking about this, especially so candidly. Um, and I I think it it it, you know, again, shameless plug, I suppose, but it speaks to the in your integrity and the integrity of your business, right? and and in the end that that is 90% of of of good business is the integrity of the individuals. So
55:42 >> I I appreciate that and I think that going back also I would I would say who what companies are you dealing with and what kind of licenses do the the principles of the company have? Do they have anything to lose? Uh because there's no requirement that you have to be a lawyer to run a business like this or have any kind of minimal u amount of money to enter into this business. There's nothing like that. So, you know, are you dealing with somebody who besides being honest, do do they have something to lose if they're not? That's always that's that's to me actually very important. I mean, that's that's why you guys are paying that's
56:17 why the lawyers on your show are paying malpractice insurance, right? Is you're you're paying it because, you know, somebody I can rep I can retain you and I know that if there's a problem or you're negligent or there you mess up, I have the insurance behind you, not unlike a bond and the probate. So, right. Yeah. That's that that's important as well. So yeah, those are a lot of common sense stuff, but you know what when you don't know of a business or industry, that's when you're most nervous upfront and that's when I encourage people the most to reach out and to to have those conversations.
56:50 >> Very good. Well, Mark, I I want to thank you very much for coming on the show today. again it's been a a very enlightening uh talk and I I think it will be uh you know a true benefit to to my viewers um because there are those situations where people you know they they they need money uh for various needs or emergencies even and I I can say as an administrator rarely am I in a position where I can go okay well you know we'll we'll do a an
57:27 early distribution or something like that. That's that's very very rarely is that even a possibility to consider and so you really fill that that important gap. So so so thanks so much for being on the show today.
57:41 >> No, I appreciate Can I also do a shameless plug uh with my email address?
57:45 >> Oh yeah, absolutely. Absolutely.
57:46 >> Okay. So if you want to get in touch with me, it's markprobatecash.com. marketprobatecash.com and my phone number is 561-4760018 is my uh direct office line. So,
58:03 >> okay. And we'll I'll put that information in the show notes. So, anyone if you didn't catch that, just, you know, go go to the show notes uh on for the episode on YouTube. You can go to our YouTube channel which is you you've seen the the crawl below you and and Mark's contact information will be there and I know he'll be more than happy to talk with you and answer any questions that that you have uh you know so that you can better understand uh what what pro what probate cash does and how it might be able to help you or help your your clients. So I'm going to do a
58:38 quick wrap-up. Mark, I'm gonna I'll have you hold tight and then we'll we'll go offline. So, thank you all very much for joining us. I know we've got we've got our our live viewers on today. So, uh appreciate you joining us. Um I'm off for the next two days for for the Jewish holiday. Uh but on Thursday at 5:00 PM Pacific time is my show, Jiggers's Place, and we'll have a cocktail and a smoo as we head in toward uh the end of the the week. So, I hope you'll join me then. And then one week from today, uh, actually I think it's it's a holiday,
59:13 but if but we'll be back either for an episode of Trust and Estates Weekly or for for a holiday edition of the Way to Wow shows. So, uh, Mark, once again, thank you so much for joining me. All of you out there, thanks for watching and signing off as I always do. Marie darling, you are