Handling Complicated Estates: An Heir's Story, with Max Meraz

0:01 As a real estate broker working in probate and trusts, and as a fiduciary and working with attorneys and fiduciaries, we get everything from a small estate to large complicated estates. And I'm really excited to have you today. Really, my customer on one of the largest estates I've worked on, Max Meraz. Max, thank you for joining us today. I'm glad to be here. Thank you for having me. So, we meet regularly in that we have a process working on with you where you've come to be in this whole matter. You want to talk a little bit about your experience on how that started? Well, sure. My father owned a small business out in Los Angeles, California, as a commercial and industrial real estate company called Magnum Properties. And he ran it by himself with two employees. And about almost 2 years ago, he suddenly passed leaving the business kind of in an unknown state. Unfortunately, I was never a part of the business at any point in time. I was never trained on anything. So, I don't have any experience in real estate. So, it's kind of been new territory for me. And this wasn't just real estate. This was commercial real estate in downtown Los Angeles, which is a very specific niche.

1:20 And he also had found a way into a niche at the time that was very successful at the time, which was cannabis leasing properties that had cannabis facilities to cannabis businesses, right? That was one of the focuses. Correct. He was definitely on the forefront of that in Los Angeles. Yeah, and I think that business kind of ran a course and for a lot of different reasons, it's kind of fallen out of favor and it's not completely out, but I'm just saying it wasn't the hot Like a lot of niches, it's hot for a while and then it's not. And so, we were kind of left with some of the mess on what do we do now that the rents aren't the same they were back when we leased them out, right? Correct. So, the thing that was unique about this case was that and he says small business and it technically legally is correct, but for most people this was a business with two employees. It had I want to say about 10 different customers they were managing property for and then separately the owner had about another 10 properties of his own plus a couple joint ventures with partners. So, there was there was the property he owned, the property he had in partnership, and the property he managed for other people, all kind of mixed together with the property management company, right? Correct. And so, even though I'm a you know, experienced real estate broker, those are also areas I've not dealt with. Nobody has done business in all those areas including residential house or two residential properties and some partnerships and such. And then Now, he didn't have an estate plan when he passed that had been executed, right?

2:48 That was one of the things you discovered along the way. Correct. He was in the process of creating a plan, however, he never finished it. So, we were kind of just left with nothing, picking up all the broken pieces and trying to make them work. And the employees that you wanted to make sure were taken care of at the same time. You had a lot of employees.

3:08 Cuz they've been working there for 20 years. So, I want to take care of them. I've known them since I was growing up. So, I absolutely want to take care of them. Shout out to Liddy and Vero. They've been great to work with. So, kind of describe the process of obviously you get a the terrific phone call that your father passed. When did you realize you had to do something and what were your next steps? So, I'm over here on the East Coast. So, I got the call about let's say about 10:30 at night. And I was I was really shocked. I was not expecting that. As far as I knew, my father was in good health. And so, I went and woke up my wife and we discussed it. And the first thing was is I need to get over there. Cuz I didn't know what to do. I've never had this experience before in my life. So, I was unsure if do I need to physically be there? Do I need to call Liddy and Vero to let them know. The thoughts went in around my head. It's like, "Oh, wait. He's got this large business, too. What about the tenants and business partners?" So, there's a lot to go through, but the first step was just to get out there. And then I met with Michael Abramson and a few others and they kind of helped me they put me onto the right path to begin this process.

4:26 So, a couple things to add some color cuz I know this. You're married and you have two children. Correct. You were working at the time. So, like everybody in life, you're busy. Yes. Very busy.

4:36 Busy, probably. You got two kids. You're you got your hands full, right? So, now you have to jump everything, come to California. Fortunately, your father had a trusted attorney who I'm not sure his exact title, but to me, I think of him as a commercial business you know, a consultant attorney where he handled a variety of things. He handled evictions, he handled contracts, he handled lawsuits. He was but he was more of a generalist attorney to your father, right? He wasn't specific in probate. So, you meet with him and of course you trust him to some degree, but you still are kind of trying to figure things out on your own. So, after talking to him, how was it that you guys put the plan together at that point? There's this big meeting with Michael and a few other business partners. And the first step was to find a fiduciary. And then the question was posed to me as do I want to be administrator of the estate or not? If I was the administrator, obviously it'd save a lot of money. However, I do not have the experience in any of that. So, I found that or my wife and I kind of came together and said it'd be better to hire an administrator who was our fiduciary, Kevin Bemel. And from there we branched out and found the team that we have now to help run the estate. So, Kevin was both a personal and business associate of mine and attorney Michael Abramson and he's a professional fiduciary. It's his business.

6:01 And so, in that sense he was able to act, you know, on your behalf to fill out those roles. You know, in my experience, it wasn't just the size and the variety of things, but this is one of the complex estates I've ever worked with in that I felt like we had so many people talking to us at once. You had two partners who just to summarize, they're both in various forms of litigation with us at some point. They both have attorneys involved with things to resolve matters 2 years later. So, neither one of those partners at the end of the day helpful I think from our perspective as you stated that's my judgment. Of course, you're entitled to your own. But it was interesting more the more people told me how much they loved your father and appreciated him, seemed like the worse they were to work with the exception of Irwin Liddy. Yes. And then we had a bank that was First Republic that was in the process of going out of business. And they were a nightmare. And so, even though we had you had plenty of money to pay bills and payroll and such, they weren't writing checks because they knew that your father passed and they didn't know who was in charge and they were having their own problems and they got taken over by Chase and we had to repeat the whole thing again for months. So, we had two difficult partners, we had customers who rightfully wanted to get paid, we had tenants who wanted who tried not to pay their rents every day I think originally.

7:20 It just seemed like this whole thing was like this what was the game we Whac-A-Mole? It's like you fix one and another. And I think that's where I realized that you were well served to have a professional fiduciary. It wasn't just as simple as walking into a business taking it over, but it really was a whole can of worms. Oh, yeah. And it kind of I think it kind of shows how much of a figure my father was to keep this business going, to keep all these people in line, to keep all the pieces moving. It was just incredible. Yeah, but I mean and then also though to understand, he had done that over decades. So, it wasn't like he just dropped in and had those skills. He had those skills, but those are skills that he developed over time working with all those people and circumstances over decades. And to expect you to walk in and keep all those plates spinning probably would not be realistic. Yes. Yeah. And so, I can tell you on the inside as the broker on the real estate side, we both helped to manage the property. We put some property on the market to sell. We tried to clear out a couple of the partnerships and close them out. And so, then here 2 years later, we now have more of a settled estate, but we're still in the probate process, but we're expecting to close that up lately. So, looking back, if you were to talk to somebody in a similar situation, caught by surprise, not planning to step into a complicated business situation, complicated financial situation, what advice would you give them to, you know, end up with the results that I think you've had?

8:48 To talk to someone that they can trust because at this moment in time when someone passes and there's a lot of money involved, people change when it comes to money. So, I would say find someone you trust and have conversation with them to say, "Hey, this is what I'm thinking of doing. Is that wise? Should I trust a this fiduciary? Should I have him run the administer the estate?" It's trying to verify who you can trust. And having one person you can talk to can make all the difference. And for me, that was my wife. And that you could bounce ideas off of her and trust her and know she had your best interests at heart and she was involved in the decision process in that sense as your advisor.

9:35 Yeah. She's a smart cookie, too. I mean, it helps be smart, right? If she wasn't, that would be a whole different experience. So Kevin Bemel was a fiduciary, Michael Abramson is the attorney that you turned to. Obviously, they've I mean, I could just tell as a third as you know, part of the team, but not as primary as either one of them. I mean, I you know, we all have our roles. That it seems like you guys enjoy and I feel the same way too to less degree pretty good level communication. I mean on one hand there's plenty of it on the other hand it doesn't seem to be a bother to you or stress to you. So where is the right how did you guys find this kind of balance between boring with all the details and stressing you out with some of the drama and at the same time keeping you informed and then bringing you at the right time to make the right decisions. How does how do you see that balance and how's that work for you? I say the team's pretty balanced right now as far as you know my stress level and my wife's stress level. We have a tendency to focus on very different things. We are different people. And so I'm able to focus on certain aspects while she may she focuses on others. So we kind of we balance our workload together because she is just as part of this now as I am. And I think just open conversation without fear of any kind of retaliation in our meetings.

10:56 I think that's the big one. Yeah. Yeah, I think we've it's been it's been for me really effective to be able to be in and hear what's going on and then and then that way I can kind of help plan ahead two or three moves that may not be relevant today but I'm kind of seeing where things are headed and kind of anticipate some of those challenges. So now going forward your longer term plan obviously has changed your life as far as the finances but I also think that I think both you and your wife are looking to a transition into a more hands-on role in the business, right? It's one thing to walk in day one have to run that's another thing to be able to kind of pick your way in or find your way in. And so where do you see your role in this in the next year or two or five years? Well that's a tough one. Let's see. For now our primary focus is our children since we are homeschooling at the moment but we do want to get more involved. It's just hard to tell when we will be involved because of you know this moment time we want to get out of the East Coast area and closer to California. So that way if anything needs if we need to go to California for whatever reason we can easily but eventually yes we would like to get involved maybe four or five years. I don't know if we'll end up getting real estate licenses ourselves but we will definitely have a lot more knowledge by then in order to how to properly run Magnum, how to manage properties and how to expand Magnum.

12:25 So you know I really appreciate the chance we talked a few months ago and I thought that somebody in your position it's one thing for me to talk to them about who they can trust, what the process looks like or for Kevin or Michael. But they may not have the relationship with either one of them and I just thought it was important that people hear your story from your side. It's one thing for me to tell people how it works it's nothing for you to say well it's my I'm the I'm the heir and here's how it worked for me. So I know that one of the roles you're looking to play on behalf of the company is to be available to talk to people in the same situation and maybe give them your experience and where appropriate we can offer some services and where not appropriate we can give them some advice hopefully or encouragement if that's necessary. So Max you're part of the P Tech team and overseeing the Magnum properties as the owner of the estate. Really appreciate your time today both you and your wife. Thank you for joining us and sharing your personal story and hopefully your opportunity to help other people going forward. Yep. Thank you for having me.