EDITORIAL: Legislature needs to fix Nevada’s probate law

There needs to be appropriate safeguards protecting the estates of the deceased. It’s clear Nevada doesn’t have them.

The Review-Journal’s Eli Segall and Michael Scott Davidson recently exposed a tragic scandal. Complete strangers are legally selling the houses of deceased men and women in Clark County. After a person dies, an estate often ends up in probate. That’s how the legal system moves assets and settles debts. A key factor in this process is the person who manages the estate.

Nevada law provides a long list of those who may perform that role. Usually, a relative will assume that duty. But the last entry on that list is anyone “legally qualified.”

That’s the opening Estate Administrative Services and Compass Realty &Management used to take control of hundreds of homes. Thomas Moore, the founder of Estate Administration Services, received court permission to administer at least 340 cases. Cynthia “Cyndi” Sauerland with Compass obtained this authority at least 125 times. Between the two of them, they “sold at least around 360 homes through probate court,” the story revealed.

Sometimes this can be necessary. Abandoned homes can quickly become neighborhood hazards. They can attract squatters and turn into eyesores that lower property values. With a housing shortage, it’s better for the community when abandoned homes return to the market. Some homes in these situations are underwater. Lenders can agree to a short sale, which resolves the loan balance, but doesn’t leave anything for potential heirs.

None of this happens by magic. It takes work by real estate professionals and attorneys. There are legitimate cases where they may get paid even if families receive nothing.

But this process is ripe for abuse, and that’s what the Review-Journal investigation uncovered. Many homes are sold without a competitive bidding process. In one instance, Mr. Moore sold a home to We Flip It LLC. Less than a week later, it flipped the house for almost $30,000 more than it paid. In another case, Mr. Moore received court approval to oversee Tsoghik Khachatryan’s estate. He temporarily forced her husband and kids out of their home before resigning from the case.

In other cases, Mr. Moore paid out more than $900,000 to private entities for “costs listed in court records as foreclosure monitoring, abatement services, abatement fees or just ‘abatement.’ ”

Several other probate attorneys said “they had never heard” of those fees.

This is an outrage. There are legitimate competing interests in these cases, but the Legislature needs to do a better job of protecting the assets of the deceased and their heirs.