Intestate fee?
August 17, 2016 1:46 PM   Subscribe

Recently we got a call from a law firm about a parent who passed. There was no will and we figured the debt the deceased owed was more than their house that was just sold. So we left it to the banks/whoever/the government to figure out what would happen to the house. The law firm wants us to sign documents and is request 1/3 of the price of the sale of the home.

My partner would like to sign right away to get the amount owed to us (a five figure range). I find the fee to be quite high though.

Is this normal for intestacy law? Thanks for any replies.
posted by neeta to Work & Money (26 answers total) 2 users marked this as a favorite
What state was this in?
posted by corb at 1:47 PM on August 17, 2016

Response by poster: California.
posted by neeta at 1:48 PM on August 17, 2016

I wouldn't sign without understanding a lot more.

Who are these lawyers?
Is the estate in probate court?

Just to start. Do more diligence...
posted by slateyness at 1:48 PM on August 17, 2016 [1 favorite]

For all we know, this is a carpetbagger who wants to file a postcard-sized government form on your behalf and collect their fee. I wouldn't sign unless I knew a lot more.
posted by adamrice at 1:50 PM on August 17, 2016 [1 favorite]

Response by poster: These lawyers just called out of the blue. Apparently the house just was auctioned today.

The estate is not in probate court.
posted by neeta at 1:50 PM on August 17, 2016

Yeah, do the legwork yourself. Obviously check for whatever court is handling the assets, but also contact the state's unclaimed property division. There's a chance that the lawyers are just trolling those rolls looking for people for whom they'll be the go-between with the unclaimed property group. I've seen such things happen before, for a third (which, yes, is pretty freakin' excessive).
posted by straw at 1:56 PM on August 17, 2016 [11 favorites]

Who retained the lawyers? Who agreed that there would be a 1/3 fee? These are not rhetorical questions. The answers are out there.

Really, there must be someone closer to the situation who can answer these questions. Have you phoned the lawyers themselves? Call them, find out what they have to say.
posted by JimN2TAW at 2:00 PM on August 17, 2016 [2 favorites]

Wait, if there was no will, who retained these lawyers? This doesn't smell right to me at all.
posted by fingersandtoes at 2:02 PM on August 17, 2016 [7 favorites]

See if the local bar assiciation can refer you to someone who can give you a free consultation. IANYL but I wouldn't trust someone who is soliciting you often direct solicitation is against the ethical rules for attorneys.
posted by SpaceWarp13 at 2:05 PM on August 17, 2016

Response by poster: @straw
What is meant my legwork? I'm probably not fully understanding this, but my partner says he doesn't want to do the legwork because it will end up in probate which means a headache for several months.

@JimN2 & fingersandtoes
Nobody in our family knows. They just called telling us the house was sold. We're trying to research this right now.

Thank you, will do.
posted by neeta at 2:08 PM on August 17, 2016

This sort of thing happened to one of my sisters, although in a different state than you. She simply thanked the lawyer for the info, then drove to the neighboring state and collected 100% of the money herself. The person who contacted you has no official role -- they're just trying to make a buck by providing you a convenience. You'll have to do a little legwork on your own to figure out where to go to get the money, and what sort of documentation will be required, but if you can do that, then you don't owe this lawyer anything.
posted by spilon at 2:09 PM on August 17, 2016 [20 favorites]

Response by poster: @spilon
Thanks. I'll tell my partner and hopefully convince him not to sign this. My partner's only desire is to avoid probate and spend a lot of time in court so he jumped at this offer. Obviously, my desire is to avoid getting scammed.
posted by neeta at 2:12 PM on August 17, 2016

This sounds like a scam.

Here's the number for the California Bar Association's Complaint Hotline: 800-843-9053.
posted by fingersandtoes at 2:16 PM on August 17, 2016

Law firms that contact you out of the blue with papers to sign and offers of free money are almost always inevitably overcharging, because they're preying on your ignorance and thought of "oh it's free money, sure."

My partner's only desire is to avoid probate and spend a lot of time in court so he jumped at this offer.

If it ends up in probate, you pay for an attorney to deal with it and the fees in this context are limited by statute. You can see that no where in this statute is anything anywhere near 33.33% of the recovery is allowed.


10810. (a) Subject to the provisions of this part, for ordinary
services the attorney for the personal representative shall receive
compensation based on the value of the estate accounted for by the
personal representative, as follows:
(1) Four percent on the first one hundred thousand dollars
(2) Three percent on the next one hundred thousand dollars
(3) Two percent on the next eight hundred thousand dollars
(4) One percent on the next nine million dollars ($9,000,000).
(5) One-half of 1 percent on the next fifteen million dollars
(6) For all amounts above twenty-five million dollars
($25,000,000), a reasonable amount to be determined by the court.
(b) For the purposes of this section, the value of the estate
accounted for by the personal representative is the total amount of
the appraisal of property in the inventory, plus gains over the
appraisal value on sales, plus receipts, less losses from the
appraisal value on sales, without reference to encumbrances or other
obligations on estate property.

It's in your best interests to find an estate attorney to advise you on this. Both the California Bar Association and your local major metropolitan area Bar Association will have a hotline you can call where you can be referred to a few attorneys for a 30 minute consultation for a minimal (<$30) fee. You're not required to go with the attorney if you don't want to, but they'll be able to tell you what this all means and what the next steps are.
posted by Karaage at 2:18 PM on August 17, 2016 [17 favorites]

Direct solicitation of clients by mail is not forbidden by most state attorney ethics rules. This could theoretically be a scam, but it's much more likely a computer-generated letter using data taken from a database of public records.

Karaage ftw. I would repeat my usual probate advice to people in states I'm not familiar with, which is:

"Old lawyers never die; they just do probate." There are, as a result, plenty of late-Baby Boomer codgers who are still sharp and know the probate system. They tend to charge far less per hour for probate stuff because 1) they have enough dosh to retire outright, and 2) they like going to court to see their friends (lawyers and judges), and your probate matter will let them do that.

DO NOT get a referral for such an one from anyone in your family (this could cause problems in a worst-case will dispute scenario). Find somebody with a little office near your county courthouse.
posted by radicalawyer at 2:22 PM on August 17, 2016 [7 favorites]

Nobody in our family knows. They just called telling us the house was sold.

Sold by who? What was their authority to sell it? Who handled the closing? That's the legwork: all of this stuff is of record someplace, because selling the wrong house or wrongly accounting for the sale paperwork is a huge liability for any of the businesses involved in this transaction. Nobody wakes up one morning and finds that the house of a dead person changed hands suddenly -- this has been going on for some time and somebody has the documents to show for it, and I wouldn't start with random 'free money for a fee' lawyers. Start with the county recorder/register of deeds for any paperwork, the auction house to sold it (who had to have advertised it somewhere in order to find customers), the county assessors office to see if the taxes had been put under another name, recent 'legal' classifieds in the local paper of record which show that the house was foreclosed or claimed by a debtor, etc., etc., etc.

And, if this is a daunting task, find yourself a lawyer of your own: you can usually talk to a lawyer for an initial consultation for free, bring them what you know and let them do the research for you -- it'll be billed an hourly rate probably and not some percentage of an unknown amount.
posted by AzraelBrown at 2:43 PM on August 17, 2016 [16 favorites]

Listen to AzraelBrown. He said it better than I did.

Here's a possible scenario. Since the entire family did squat about their parent's affairs when he/she died (inconceivable, but that's what you say you did), the house was taken either for unpaid taxes or for the unpaid mortgage.

The creditor (the local government or the bank) hired lawyers to sell the house to cover the debt. There was money left over. Part of it belongs to you. It's just sitting there.

Find a lawyer of your own, and maybe, for a few hundred dollars, you can get your money without paying a 1/3 fee.

And it won't cost you anything to start with the "random 'free money for a fee' lawyers." Just ask them what happened and ask for copies of all the papers. Then take the papers to your own lawyer.
posted by JimN2TAW at 3:01 PM on August 17, 2016 [5 favorites]

Response by poster: Thanks for the helpful answers everybody.

One thing I'm curious about is how this law firm is able to get us this amount of money without having to go through probate. It seems like other lawyers we've talked to over the phone so far say that probate is a necessity.

The reason why we didn't want to go through probate in the first place was, in addition to the lengthy process involved, was because of the deceased's possible outstanding medical debt (not sure about how much, but I think there is some). And somehow this firm will be able to get us money for the house regardless?

In any case, we're going to talk to a lawyer about this for sure. Thanks again for your time and info.
posted by neeta at 3:30 PM on August 17, 2016

I'm a lawyer and this sounds like a scam.
posted by J. Wilson at 4:29 PM on August 17, 2016 [13 favorites]

Having just probated two estates and not being a lawyer - I can tell you it's not as insanely complicated or time consuming as you think. A house was sold. Someone signed an agreement to list and sell a house. You need a lawyer, do yourself a favor and don't sign anything. There's a lot going on behind the scenes that you don't seem aware of.
posted by fixedgear at 5:42 PM on August 17, 2016

I am a lawyer. I am not your lawyer. ALWAYS choose your own lawyer, not the first one who comes to you.
posted by banishedimmortal at 5:56 PM on August 17, 2016 [9 favorites]

Your state has a website with basic probate info.
posted by soelo at 6:41 PM on August 17, 2016

This lawyer sounds like a scammer, but if your spouse is insistent on signing with the person, I am quite sure his fee is negotiable. Offer him 10% or you take your business elsewhere and see what he says.
posted by AugustWest at 7:15 PM on August 17, 2016

Back when I was young and in need of a job, I worked for a family friend who ran a company that contacted people with unclaimed assets and recovered them for a 10% fee. It was totally a bottom feeding thing, because you can do it yourself for free (this was also in California). I don't know if this is necessarily the same kind of unclaimed asset, but the MO of this law firm sounds pretty similar to my old company's - we'd send an official looking letter on the company lawyer's letterhead, and then count on people not knowing how easy it is to claim this stuff on their own. Sometimes the boss would call people who were owed really big amounts, saying something like "I'm calling on behalf of lawyer so and so, and I'm letting you know that you have an unclaimed asset..."

We didn't actually claim to be lawyers, but we did name drop the law firm because it sounded more legit. The business wasn't illegal (a few times we had to shut down for a couple hours because someone had called the BBB on us - we were clean), but it was pretty scummy just the same.

It sounds like something similar is going on here, as other people have said. I would guess that this is a firm that does this kind of thing in bulk and makes most of their money on sizable claims like yours. If not for the huge fee they're asking for and the fact that this house just sold, I'd think this could have been my old company.

Unless this firm was hired by someone, they're probably operating with publicly available information. My long winded story here is just my way of backing up what other people have said about exploring other possibilities before giving in to these people.
posted by teponaztli at 8:07 PM on August 17, 2016 [3 favorites]

I think if your partner is tempted to sign these papers he needs to at least have another lawyer look them over first. Are you certain that accepting the proceeds from the sale won't put you on the hook for debts against the estate? And if those debts exceed the amount you're receiving, are you certain you couldn't end up on the hook for the third of the sale you "paid" to this random law firm?

It sounds like the main reason your partner wants to take this over probate is that he's assuming you'll end up with nothing or near nothing in probate. Who's to say going this route won't leave you with even less than nothing?
posted by nobody at 3:04 AM on August 18, 2016

There was no will and we figured the debt the deceased owed was more than their house that was just sold. So we left it to the banks/whoever/the government to figure out what would happen to the house. The law firm wants us to sign documents and is request 1/3 of the price of the sale of the home.

This is my understanding of what's happening:
You (or partner?) is legal next of kin to the deceased.
Deceased owned a house in Deceased's name only (possibly mortgage free?)
Deceased owed substantial medical bills
Because of the bills and the assumption that they were more than the value of the house, you and partner decided to pretend that the house didn't exist (did you sign anything?)
The house was recently sold at auction (what precipitated the auction? did the house get condemned for abandonment? is it a tax auction because no one was paying property tax? is it a mortgage foreclosure?)

Now, Law Firm has sent a letter saying that you are owed a 5-figurish amount of money, that Law Firm would like a third of.

IANYL, TINLA: I think that what's happened is the house went to auction because [reasons], and after paying off the direct liens on the house (mortgage, taxes, fines, etc.), there was about 5 figures left over. This is probably pre-probate money however, and the unsecured creditors (medical debt) probably have a legal right to a share of the 5 figures.

I am also concerned that what the law firm is trying to do is to get you to claim the money from the sale ("the estate") which could open you up to also claiming the medical debts. I have no idea how accurate the web page quoted below is for California law but this statement (which you would be unwise to take as legal advice) matches what I would expect:
What if there are debts and no will?
The important factor to note when there are medical bills and no will is that those who "make claims on the estate assets also have responsibility for paying off the debts of said assets." The "heirs at law" or "beneficiaries" will inherit both credits and debts when there is no will.
I honestly think that you should get in touch with an estate lawyer of your own to help you sort out what seems like kind of a mess. Worst case, it should cost you a few hundred dollars to get this sorted out such that you don't have to worry about it anymore. Best case, it costs you a few hundred dollars to access that 5-ish figure amount of money without exposing yourself to liability.
posted by sparklemotion at 9:08 AM on August 18, 2016 [4 favorites]

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