Irrevocable Trust Loan

Irrevocable Trust Loans

Irrevocable Trust Loans

Recently Tanis Alonso, one our Trust & Estate Loan Account Executives was interviewed by the staff at PropertyTaxTransferTrusts.com/  here are some of the highlights of that interview and the full interview can be found here: Trust Loan Interview

We sat in with noted Proposition 58, trust loan expert – Tanis Alonso, at Commercial Loan Corporation in Southern California. Tanis has a uniquely profound, global understanding of the entire trust loan process; and applies a very human, not simply financial, viewpoint to the process ~ as does the entire team at the cloanc.com organization; with a strong, genuine focus on “helping people” not simply implementing financial transactions…

Property Tax Transfer: Thank you so much for agreeing to chat with us about Proposition 58 and trust loans today…

Tanis Alonso: Of course. It’s my pleasure.

Property Tax Transfer: Great. Tanis, can we take a close look at how the basic trust loan process works in California, from your perspective, as a lender – and from the point of view of your average everyday beneficiary, many who need to keep parents property taxes…  Some who want to sell a property they are inheriting from their parents – and of course the other beneficiaries to a trust or estate that are determined to keep that home, and fight that sale. But first, who is your typical caller? Who in the estate or trust scenario tends to reach out to you first?

Tanis Alonso: Basically, whomever is trying to not sell the inherited property – is generally the initial caller to my office. It might be the trustee, frequently at odds with certain beneficiaries… Or very often it’s a family member, one of the beneficiary’s to the trust that doesn’t want to sell that home.

Property Tax Transfer: Got it. So, what does an average Proposition 58 property transfer and trust loan scenario in California look like, contributing to peace of mind for property owners? There must be similar scenarios, that reflect average  trust or estate outcomes all across the state.

Tanis: Absolutely. One of the most common scenarios we see, here at Commercial Loan Corp., are elderly parents, for example… who, sadly, pass away, leaving loved ones behind. So, let’s say there is an estate, or perhaps a trust, and there are three beneficiaries involved… And property is the only asset… Let’s say there are no cash accounts. And this is not uncommon these days.

Property Tax Transfer: Yes, we hear that it’s quite common to see a trust inheritance, or probate estate, where there is very little cash left at the end of the road…

Tanis: Exactly. Parents who pass away in their nineties let’s say, who basically have spent most of their cash assets that were in savings, or in stocks and bonds, and by the time they get into their mid or late nineties, those assets are mostly gone, cashed out or spent –

Property Tax Transfer: OK. So there isn’t much money left in many inheritances… So what do beneficiaries do? When do these conflicts we hear so much about begin, when a house is being inherited by several beneficiaries… some who wish to sell, and some who prefer to keep the property, and to keep parents property taxes?

Tanis: Well, here is a typical middle class inherited real estate scenario – let’s say, for example, there are three beneficiaries and no other assets being inherited except an older home. One beneficiary wants to keep the house, to keep parents property taxes; while the other two siblings prefer to get cash from an immediate house sale, probably through a nearby realtor. But – instead of selling to a buyer, here is where Proposition 58 and a trust loan comes into play, providing liquidity and compliance with the Proposition 58 tax system – furnishing the two siblings who prefer to sell, with enough cash liquidity as if they had sold their shares in the inherited property to a buyer…

Property Tax Transfer: So why not sell? Why the trust loan?

Tanis: Because with a loan to a trust there is the upside of less expense. Frequently, we’re talking about ten times less of an expense than would normally be involved in a house sale. Again, a process compensating beneficiaries through a trust loan, instead of a house sale or coming up with the cash yourself… versus a formal house sale through a realtor that would cost approximately ten times the amount to process the entire scenario, a house sale, with realtor commission and fees, taxes, ancillary costs, etc…

Property Tax Transfer: Paying off the beneficiaries who wanted the cash from a house sale in the first place, right?

Tanis (Commercial Loan Corporation): Exactly. And so the rest of the trust loan goes to pay for 100% of parents Proposition 13 tax base – and the Proposition 58 tax system makes it possible to transfer the property to the beneficiary or beneficiaries that did not want to sell – to keep parents property taxes at the low Proposition 13 tax rate – or involving Proposition 193 if it is real property,  not left by the parents, but by grandparents.

Property Tax Transfer: You say ten times less on expenses versus paying for it yourself?

Tanis Alonso: Absolutely. It costs the families we help far less to get a trust loan from us, believe it or not, then it does if they were to dig into their own savings to complete the Proposition 58 property transfer process.

Property Tax Transfer: How does that translate in terms of real numbers?

Tanis Alonso:  Let’s say a property value is currently one million dollars and the current tax base is $1,200. If they were to get reassessed at current value that would be around $11,000 annually.  By someone keeping the property and obtaining a trust loan to properly buy out their siblings that allows the beneficiary that is keeping the property to keep parents property taxes, to retain 100% of the Proposition 13 tax base that was paid by their parents and keep that low property tax base of $1,200. This of course creates much greater affordability than if they were to improperly buy out their siblings and have that property reassessed. The loan to trust goes hand in hand with the Proposition 58 property tax transfer system, creating enough liquidity to equalize distributions, not sell, and allow a beneficiary to keep their parents property with their low property tax base.

Property Tax Transfer: It sounds counter intuitive, doesn’t it.

Tanis Alonso: I know, it does sound counter intuitive – yet it’s true. All you have to do is run the numbers yourself, and you’ll see what I’m talking about. It’s a better way to be able to keep an inherited house in the family, and to keep parents property taxes, when there is a dispute going on that pits the beneficiary who wants to keep a house against the beneficiaries that want to sell that home. A home that a family has so many memories associated with; with such strong emotional attachments to. There are so many wonderful family memories that are attached to each home. And every home is unique and different in that sense, just as every family member is different and unique.

Property Tax Transfer: You mean emotional memories you can’t replace with cash, in fact you can’t buy for any amount of money.

Tanis Alonso: That’s right. Anyway, this process allows families to keep that home in the family. And that’s the most important point!

Property Tax Transfer: It is the crucial point.

Tanis Alonso: Absolutely. And as a person on the front lines for this firm, neither I or Commercial Loan Corp. view each trust loan scenario as simply a “financial transaction”. Nor do we see the home they’ve lived in for decades as just a “piece of real property”. To us, this a “piece of family history” in the making. And the process a family decision, not a “transaction”. We see our clients as real families that we’re helping, financially and emotionally, not just as clients signing a contract for a trust loan. For us it’s much more than that.

Property Tax Transfer: It’s very obvious that you really enjoy helping people… getting them money when they really need it – and saving them on the cost side in the bargain, with trust loans.

Tanis Alonso: Correct. We see them as real people that we’re able to help in a time of need. For us it’s so much more than cash and property – we don’t view it that way. We’re talking about family history here. Not just “another deal”.

Property Tax Transfer:  Tanis, let me ask you…  Beneficiaries that call your company, desperate to keep parents property taxes;  for any solution to their property transfer / Proposition 58 issue – is it a safe bet to assume that 99% of the time there are elements that come up again and again?

Tanis: Well, that’s true, to a point. With beneficiaries that call us, with a trust or estate situation, there is always real property being inherited, going to one or several beneficiaries… and little, if any, cash – and each family always has different dynamics. There are always differences, as regards the people and details involved. But, the one constant you can be sure of is that there is always someone who wants to sell… and always someone who wants to keep the property they are inheriting… dead set against selling.

Property Tax Transfer: And at the end of the tunnel, is it safe to assume that with your company it’s generally a win-win equation, for everyone involved. Everyone involved, more or less, get what they want, right?

Tanis Alonso (Commercial Loan Corporation): That’s right.  99% of the time. The beneficiary, or beneficiaries, that want cash from the sale of the property that they’re inheriting, get the cash they were looking for, from the trust loan…

Property Tax Transfer: And the beneficiary or beneficiaries that want to keep the house, get to keep that house, and keep parents property taxes…

Tanis: Yes! And let me say that, typically, this is a really, really big win for them – as the siblings that wanted to sell are usually very vocal, and very aggressive about their desire to do so! That beneficiary that wants to keep that property, that is also able to get the other siblings a large amount of cash for their shares in the inherited real estate – while still being able to keep the home they’re so attached to, and keep parents property taxes; keeping parents property tax rate.  This would be practically impossible, were it not for our trust loan. And there’s your win-win equation!

Property Tax Transfer: And what about the cost factor? Costs involved in the equation… How does everyone benefit on that level, getting cash to the beneficiaries that wanted cash from a house sale? Versus coming up with property buyout cash themselves…

Tanis Alonso (Commercial Loan Corporation): OK, so cost involved, selling versus keeping inherited property. I’ll try to keep the equation simple. Costs associated with this property funding process through a trust loan, paying for everything, including beneficiary property shares buyout, taxes, etc. is, on average, 3.5% – So by someone keeping the family property everyone will receive more money than if they were to sell the property at approximately 6.5% in costs. The average trust receives $45,716 more to distribute than if they were to sell the property to some random buyer.  Each beneficiary on average is receiving $16,652 more by someone keeping the property, instead of selling it. And our average annual tax savings is $6,043. We have already saved a combined amount just shy of 1 million dollars for our clients on property taxes. That is a significant benefit for all beneficiaries when someone keeps the property instead of selling it!

PropertyTax Transfer: So you’re saying those savings would have been completely lost, per beneficiary, if they had sold out to a regular buyer…

Tanis Alonso (Commercial Loan Corporation): That’s right. For example, say it’s you and your sister.  A major conflict. You want to keep the house you’re all inheriting from your parents, plus keep parents property taxes. Why should I let my sister sell? The solution there is because you are going to get more cash in your hands than if you were to sell the property! That’s the bottom line. A trust loan transaction takes 7-10 business days whereas selling will take a few months. Everyone receives more money, more rapidly, then if they were to sell the property on the open market. Everyone benefits from this… it’s win-win all the way around.

PropertyTaxTransfer: So you let your sister sell, so everyone wins – is what you’re saying.

Tanis: Of course! Let her sell, let her get her way – and you end up getting your way… you get what you wanted, to keep your house with everyone paid off and happy. No more conflict. On a $500,000 property – do you want to spend 6.5% to sell that property, with a realtor, or 3.5% through our trust loan, in keeping with the Proposition 58 tax system? Which number would you want to give away, 6.5% or 3.5%?

Property Tax Transfer: Naturally. So the long range picture looks like increases in taxes as well, so that’s not as affordable either.

Tanis: Absolutely right. In certain cases a property tax reassessment can add an extra $700 to $1000 per month to your property taxes. That’s an extra $1,000 per month – not per year! Month after month. That is affordability vs not affordability to many.

Property Tax Transfer: Going through the Proposition 58 tax system, with the trust loan paying everyone off…  What would property taxes look like going down that road?

Tanis: OK so the question is, “why do I need a trust loan to buy out beneficiaries who want to sell our inherited house?”  The answer is you can still keep the house you’re inheriting, and not spend any of your own money in the process.  The importance of the trust loan is that you can buy out your siblings and still keep parents property taxes. You keep 100% of the low Proposition 13 property tax base that was originally paid by your parents.  If you were to use your own money to buy out your siblings, the State Board of Equalization would see that as a sibling buying out a sibling – and that would definitely trigger a property tax reassessment. Naturally, the result of that would be higher taxes.  So you need the trust loan to buy out your siblings in order to take advantage of Proposition 58, and keep the low property tax base.

Property Tax Transfer: Most people don’t have that kind of cash on hand nor do they want to use all of their cash for this just to buy out beneficiaries in an estate setting. Especially if the numbers go higher…

Tanis Alonso (Commercial Loan Corporation):  Beneficiaries who want to keep their inherited property still put a lot more money in their pocket, still save a lot more,  by not using their own funds…  by buying out beneficiaries that want to sell by going the trust loan route.  Staying within the discounted Proposition 13 tax base, being able to keep parents property taxes … taking advantage of the  Proposition 58 property tax system, or tax shelter.  Using this tax shelter  that we looked at before, if you recall – would be around $1,200 per year on a million dollar property.  Saving thousands of dollars annually on property taxes by taking advantage of Proposition 58; keeping their parents low property tax base.

Property Tax Transfer: Yes, the difference in the numbers are stunning.

Tanis Alonso (Commercial Loan Corporation):  Yes it is.  So if you use your own money to buy out your siblings you will trigger a reassessment… if that was reassessed normally, without doing the property transfer and beneficiary payoff with our trust loan – you’d be looking at an $11,000 tax hit per year on the same million dollar property!  If reassessed at the current, present day, base rate – that tax hit goes up 10 times. A significant difference in cash back in your pocket after it’s all done and said. Trust loans are a huge benefit for all of these families and that’s how we’re able to really help people in a significant way.

Property Tax Transfer: The amount of money saved really is remarkable.  And I can see that you genuinely enjoy helping your clients save a great deal of money with these trust loans. Making great use of the low Proposition 13 base rate, and the Proposition 58 property transfer tax shelter… The formula works!

Tanis Alonso: Absolutely. And helping people in this way is what it’s all about! That entire viewpoint is the basis for this whole company, from the top down – starting with the CEO, who is a truly terrific guy, who genuinely loves helping people, with money, memories, and time. And you can’t replace memories and time!

Property Tax Transfer:  You can’t replace memories and time… Very well put!  That is a concept to remember.

Tanis Alonso: It is so important to remember, when you truly care about what happens to the people you’re helping.

Property Tax Transfer: Very true.  Your clients are lucky to have you folks working for them.  Thanks so much for speaking with us today.

Tanis Alonso: Thank you.  It was a great pleasure chatting with you.

If you have questions about a loan for an Irrevocable Trust, or about California Proposition 58, please call Tanis at 877-464-1066.

 

California Proposition 13 & Proposition 58

California Proposition 58 and Proposition 13

California Proposition 58 and Proposition 13

Recently there has been debate in California if Proposition 13 and Proposition 58 still make sense. Without hesitation, the answer is yes. In June of 1978, California voters passed Proposition 13 with 65% of the total vote. Still, to this day, interestingly enough, 65% of “likely voters” in California still support the Proposition 13 this tax relief initiative.

California Prop 13 stabilized property taxes for Californians and gave a great incentive that encouraged Californian’s to become homeowners. The Proposition 13 tax break made property tax increases more affordable by limiting them to a maximum of 2% annually. Californians are fortunate enough to still be benefiting from this same formula 42 years later.

Proposition 58 works in conjunction with Proposition 13. Prop 58 allows a parent to transfer their Proposition 13 protected property tax base to a child. This is especially important when a child inherits a home from a parent. Prop 58 allows the child to inherit the home without having the property taxes reassessed, saving potentially thousands of dollars annually. This can make a home that may otherwise be unaffordable for the child, now affordable.

Trust and Estates Terms and Definitions

Common Trust and Estate Terms

Common Trust and Estate Terms

Matters pertaining to Trusts and Estates can be complicated, especially if you are unfamiliar with the terminology. The following is a glossary of terms that are commonly used in Trusts and Estates and loans made to trusts.

Administration:
Trust administration refers to the trustees management of trust property according to the terms of the trust after the settlor’s passing.

Beneficiary:
A beneficiary is the person who derives advantage or benefits from something. There can be multiple beneficiaries in a trust. Beneficiaries are names in a trust or will to receive something.

California Proposition 13:
Prop 13 is a California Constitutional amendment enacted in 1978. California Proposition 13 limits the tax rate increase that can be charged annually on real estate. The proposition decreased property taxes by assessing property values at their 1975 value and restricted annual increases of assessed value of real property to an inflation factor, not to exceed 2% per year. Prop 13 also prohibited reassessment of a new real estate property tax base year value except for in cases of either change in ownership, or completion of new construction. 

California Proposition 58:
Prop 58 became effective in November of 1986.  With certain limitations, California Proposition 58 allows for the exclusion for reassessment of property taxes on transfers between parents and children. Prop 58 is codified by section 63.1 of the Revenue and Taxation Code. In the State of California, real estate or real property is reassessed at market value if it is sold or transferred. Property taxes can sometimes increase dramatically as a result. If the sale or transfer is between a parent and their child, under limited circumstances, the property will not be reassessed if certain conditions are met and the proper application is filed in a appropriate amount of time. Prop 58 allows a child inheriting a home to avoid property tax reassessment when acquiring property from a parent.

California Proposition 193:
Effective March of 1996, California Prop 193 is a constitutional amendment approved by the voters of California which excludes from reassessment transfers of real property from grandparents to grandchildren. Prop 193 requires that all the parents of the grandchildren who qualify as children of the grandparents are deceased as of the date of transfer. Prop 193 is also codified by section 63.1 of the Revenue and Taxation Code.

Change in Ownership:
Ownership of real property transferred from one person or entity to another.

Conventional Lender:
A conventional lender is a lender that provides loans that meet the lending criteria of the Federal National Mortgage Association (FNMA “Fannie Mae”) or Federal Home Loan Mortgage Corporation (FHLMC “Freddie Mac”). When it comes to lending to a property held in a trust, a conventional lender will not provide a loan to a trust.  They require that the property first be removed from the trust and placed in the name of an eligible borrower. Commercial Loan Corporation is one of the only California lenders that will lend directly to a trust.

Co-Tenants:
Co-Tenants or tenants in common share a specified proportion of ownership rights of real property.

Disproportional Distribution:
A disproportional distribution is a trust or estate distribution where one or more heirs or beneficiaries receives a larger portion of the distribution of an estate / trust.

Encumber:
To create a claim, limitation on, or liability against real property.

Equal Distribution:
An equal distribution is a trust or estate distribution where all heirs or beneficiaries receive an equal portion of assets in the trust or estate.

Equity:
The difference between the value of real property and anything owed against the real property.

Estate:
All the assets owned by a particular person (less debt) at death.

Executor:
A person or institution appointed by a testator to carry out the terms of their will.

First Right of Refusal:
A contractual right that gives its holder the option to buy real property.

Guarantor:
One that guarantees the repayment of a loan.

Irrevocable Trust:
Type of trust where its terms cannot be modified, amended or terminated without the permission of the grantor’s named beneficiary(ies).

Letter to Assessors:
Board of Equalization’s summaries of court rulings, legal opinions, highlights of enacted legislation, Property Tax Rules and technical bulletins for assessment problems.

Non-Pro Rata:
Each heir / beneficiary receives an equal portion of the entire estate / trust, but not necessarily of each asset.

Option to Purchase:
Opportunity to purchase a piece of real property.

Per Stirpes:
An estate / trust is distributed “per stirpes” if each heir / beneficiary is to receive an equal share of the estate / trust.

Pro Rata:
Each heir / beneficiary receives an equal portion of each asset in an estate / trust.

Probate:
The official proving of a will.

Promissory Note:
A signed document containing a written promise by one party to repay a stated sum to another party.

Proportional Interest:
The interest of one heir / beneficiary divided by the total number of heirs / beneficiaries.

Revocable Trust:
Type of trust where its terms can be modified, amended or terminated dependent on the grantor.

Security Interest:
Enforceable legal claim or lien on real property.

Settlor:
The settlor is the entity that established the trust.  The settlor goes by several other names in matters related to trusts; you may also see them described as the grantor, or trustor. The settlor’s role is to legally transfer control of an asset to a trustee. The trustee then manages it for one or more beneficiaries.

Share / Share Alike:
Each heir / beneficiary receives an equal portion of the estate / trust.

Statutory Powers:
Legal powers given by a statute.

Testator:
The person who made a will.

Trust:
An arrangement whereby a person or entity (trustee) holds assets as its nominal owner for the good of one or more beneficiaries.

Trust Distribution Worksheet:
The final accounting of the assets & liabilities for the distribution of a trust.

Trust Residue:
All of the property that is left after specific gifts are distributed from a trust.

Trustee:
An individual or entity given control or powers of administration of assets in a trust.

Trustor:
The person(s) that created a trust (aka “settlor” or “grantor”).

If you have any questions, please call us at 877-464-1066 and we will do our best to assist you.

Parent to Child Property Tax Transfer

California parent to child property tax transfer

Information on the California parent to child property tax transfer

Parent to Child Property Tax Transfer on California Real Estate

Did you know that in some situations California property owners can transfer a property tax base to another person?  It is possible, but there are some limitations. California Proposition 58 allows parents and children to pass property to one another and avoid property tax reassessment in some cases.

Why is a parent to child property tax transfer important for Californians?

Simply put, it allows you to keep your parents low Prop 13 tax base on an inherited home. This can make the cost of keeping the home more reasonable. Here is an example of how it works. Say a parent purchased a home in 1982 for $125,000.  The parent passes away in 2018 and the property is then worth $800,000. Because California Proposition 13 limits the amount that property taxes can increase to just 2% per year; the parents annual property tax payment may be only $2,000 per year when they pass. If that home were to have its property taxes reassessed, the taxes would jump to around $8,000 per year.

California Proposition 58 allows the child to avoid property tax reassessment on the home inherited from the parent. That means a savings of around $6,000 per year in property taxes for the person inheriting the home. This makes the home more affordable for the child and may allow them to keep the home as opposed to having to sell it. If you have specific question on if you may be eligible for a California Prop 58 exclusion from property tax reassessment, please call us at 877-464-1066.

Can a child inheriting a home avoid property tax reassessment if the home is held in a trust?

Yes, California Proposition 58 does allow a parent to transfer a property held in a trust to a child and avoid property reassessment. That being said, doing so can be complicated when multiple trust beneficiaries are involved. An equal distribution is required in most situations. If there are not sufficient funds in the trust to equalize the distribution, the trust will need to borrow the funds needed. In that situation, the County Assessors office will require that an equal distribution was made with funds provided by a third party loan to the trust in order to grant a Proposition 58 exclusion for reassessment.

Typically at the time of passing, a Family Trust, Living Trust or Revocable Trust becomes an Irrevocable Trust. When the trust becomes irrevocable the ability to make changes to the trust is restricted. The trustee or trust administrator may have few options when it comes to receiving a third party loan on a home held in the irrevocable trust. Most California lenders are not willing to lend on a home or provide a mortgage to an Irrevocable Trust. Even fewer have the experience and proper loan documents to provide a Proposition 58 compliant loan.

Proposition 58 compliant loans to trusts.

Commercial Loan Corporation is one of California’s leading providers of loans to Irrevocable trusts.  Unlike other lenders, this is what we specialize in. While the majority of lenders are unable to lend to an Irrevocable Trust, this is our focus. Every month with assist clients qualify for their California Proposition 58 exclusion from reassessment with our Prop 58 compliant loans to trusts.  If you, a client or a family member are interested in obtaining a mortgage to an irrevocable trust, please call us at 877-464-1066 and we would be happy to assist you.

Irrevocable Trust Loans

Lender for Irrevocable Trusts

California Lender for loans to Irrevocable Trusts

Loans to Irrevocable Trusts

When it comes time to distribute the assets of an irrevocable trust, a trust loan may be needed if an equal distribution is required or desired. A trust loan provides the trust with liquidity; supplying cash so that assets do not need to be sold off or converted to cash. The trust loan is a mortgage placed against a piece of real estate held in the trust. Unlike a traditional mortgage, a trust mortgage loan is typically a short term loan. Once the assets of the trust are distributed, the beneficiary who inherited the real estate with the trust mortgage placed on it would refinance the trust mortgage with a conventional mortgage or payoff the mortgage.

Why Is An Equal Distribution Important?

When it comes to a trust distribution, an equal distribution can be important for a variety of reasons. Often times there is language in the trust that requires an equal distribution of the assets in the trust be made to beneficiaries. If the trust only contained cash, it would be easy to accomplish this. Unfortunately, most trusts that contain real estate do not have cash or other assets sufficient to create an equal distribution. In this situation, either the real estate must be sold or a mortgage must be taken out on the real estate to infuse the trust with cash. A trust loan is almost always the least expensive of the two options. Sometimes, more importantly, it also allows a beneficiary to keep a family home in the family.

Another important reason for the equal distribution of a trust is to meet the requirements of California Proposition 58. Prop 58 allows a child who is inheriting a home from a parent to avoid property tax reassessment on that home. This passes the low proposition 13 protected tax base from a parent to a child. Often times when the home is held in a trust, an equal distribution is required if a Proposition 58 exclusion from reassessment is to be granted by the County Tax Assessors office. In fact, the majority of trust loans that we provide are specifically for this reason. Our clients save on average over six thousand dollars per year in property tax savings by avoiding reassessment.

Do All Lenders Loan To Irrevocable Trusts?

No, in fact very few lenders are willing to lend to a trust, let alone an irrevocable trust. Typically when a home is held in a trust, a conventional lender will require that the property first be removed from the trust before they will lend on it. When a trust is revocable, this may not be an issue since the home can be added back into to trust once the mortgage process has been completed. Once the trust becomes irrevocable, often times the ability to do so is no longer possible and a lender who can lend to Irrevocable Trusts will be required.

When the requirements of Proposition 58 need to be considered, the situation can become even more complicated. Proposition 58 requires that the acquiring beneficiary of the real estate makes no personal guarantee on the trust loan or trust mortgage.  Doing so would be perceived as a sibling to sibling transfer of real estate as opposed to a parent to child transfer and would likely jeopardize the exclusion from property reassessment. Commercial Loan Corporation is one of the only lenders in California that provides Irrevocable Trust Loans with no personal guarantee requirements. We work directly with Trust Administrators, Trustees, Beneficiaries, Attorneys and Property Tax Consultants. If you require a Trust & Estate Attorney or Property Tax Consultant to assist you with Proposition 58, we can refer you to an expert to assist you.

Is A Trust Loan Less Expensive Than Selling A Home?

Yes, in almost all cases a trust loan is far less expensive than selling a home. Additionally a trust loan takes less time to complete than it takes to sell a home. We can complete a trust loan in as little as 10 business days. That means beneficiaries can get more money and get their funds more quickly. When you consider the ability to take advantage of the Proposition 58’s exclusion from reassessment, the savings grow even further.

We specialize in loans to Irrevocable Trusts. If you or a client are in need of a trust loan or have questions about loans to an irrevocable trust, please call us at 877-464-1066. We will provide you with a free benefit analysis and answer any question you may have.

USC Trust & Estate Conference

USC Trust & Estate Conference

USC Trust & Estate Conference

If you are attending the USC Trust & Estate Conference on 11/22/2019, please stop by our booth an speak with Tanis Alonso, our Senior Account Executive. She will be on hand to answer any questions you may have on Trust Loans and their role in the Proposition 58 exclusion from property reassessment.

This years USC Trust & Estate Conference has over 500 registrants. The conference is tailored for trust, estate planning, probate and elder law professionals. Attorneys, paralegals, trust officers, accountants, financial institution executives, private professional fiduciaries, wealth management professionals, fiduciary officers, underwriters and insurance advisers will all be on hand.

The Featured Sessions Include:

  • Annual Update: Recent Developments in Probate and Trust and their Practical Applications
  • Probate Code §2580, et seq. Whose Judgment Is It Anyway?
  • To Decant or Not Decant…That is the Question
  • Mystery in a Mumu: What Makes Your Judge Tick?
  • Tips and Tricks for Taming Basis
  • Assessing Capacity on a Sliding Scale: A Look Into Retrospective and Contemporaneous Evaluations
  • Attorneys and Other Advisors as Counselors: What They Don’t Teach You in Law School

If you are currently working with a client that might benefit from a trust loan, probate loan, estate loan or has questions about lending to an irrevocable trust; please stop by our booth and Tanis can answer any questions you have.  You may also call us at 877-464-1066.

Irrevocable Trust Loan Specialist

Your California Irrevocable Trust Loan Specialist

Trust Loan Specialist

California Trust Loan Specialist

Commercial Loan Corporation is a licensed California lender specializing in making loans to trusts and estates. Unlike most lenders who provide a broad range of loans, we focus specifically on trusts, irrevocable trusts and estates. In fact every month we help clients by providing trust loans so that an equal distribution of assets can be made. Our trust loans help beneficiaries meet the requirements of California Proposition 58 and help them to avoid property tax reassessment on an inherited home.On average we save our clients over $6,000 per year in property taxes by helping them avoid property tax reassessment.When receiving a trust loan from Commercial Loan Corporation, you can count on:

  • An simplified application process
  • Quick Approvals and Fast Funding
  • Our Loans Fund In As Little As 7-Days
  • Same Day Loan Approvals
  • The Highest Level of Customer Service

If you, a family member, client or friend may be able to benefit from a trust loan, please call us at 877-464-1066. We provide clients with a no cost estimate on how much might be saved by taking advantage of California Proposition 58’s exclusion from property tax reassessment.

Loans to Irrevocable Trusts

Most banks and lenders are not willing to lend on a property that is held in an Irrevocable Trust. Instead they require that the property be removed from the trust before placing a mortgage upon it. This can make it difficult if not impossible for a beneficiary to qualify for Proposition 58. If you are trying to preserve a parents low Proposition 13 property tax base on an inherited property that is held in a trust, call us at 877-464-1066 and we can help you simplify what can be a complicated process.

Loans to Trusts and Beneficiaries

Loans to Trusts and Beneficiaries

Click here for more information on Trust Loans

California Proposition 58 – Avoiding a sibling to sibling buyout

 

California Proposition 58 Qualifications

California Proposition 58 Qualifications

Qualifying for California Proposition 58’s Parent to Child Transfer

When it comes to California Proposition 58, making a mistake can cost you! Prop 58 grants the ability for a parent to transfer real estate to a child and avoid having that property reassessed. That may sound insignificant to some, but it can translate to a dramatic yearly property tax savings. In fact, the clients we assist save on average more that $6,000 per year in property taxes by taking advantage of this Proposition 58 property tax benefit.

In order for a child who is inheriting a home from a parent to qualify for Proposition 58, they must meet specific requirements. One of these requirements is that when there are multiple child beneficiaries involved and one of the children wants to inherit the home, while others wish to receive cash; the child inheriting the home can not use their own funds or personally guarantee the funds used to equalize the distribution. That is where Commercial Loan Corporation can help. Unlike conventional lenders, we provide loans directly to a trust; even an irrevocable trust. This allows our clients to avoid a sibling to sibling buyout which would otherwise disqualify them from receiving a full exclusion from property tax reassessment.

We highly recommend that you work with an attorney or property tax specialist to insure you both qualify and receive your benefit. Call us at 877-464-1066 and we can provide you with a FREE analysis of how much you might be able to save each year in property taxes. We can also put you in contact with a qualified Attorney or California Property Tax Consultant in your area if you require assistance.

CALL 877-464-1066

California Proposition 58 Qualifications

California Proposition 13 – People’s Initiative to Limit Property Taxation

California Proposition 13 Property Tax Information

About California Proposition 13 Property Tax Information

About Proposition 13

California Proposition 13, also known as the People’s Initiative to Limit Property Taxation was an amendment of the Constitution of California enacted in 1978. California Proposition 13 made it so that the maximum amount of any tax on real estate shall not exceed one percent of the full cash value of such property and additionally restricted annual increases of assessed value of real estate to an inflation factor, not to exceed 2% per year.

Proposition 13 also prohibited reassessment of a new base year value except in cases of change in ownership, or completion of new construction. Later, in 1986 Californian’s passed Proposition 58 which also excludes from reassessment transfers of real property between parents and children, with certain limitations.

Commercial Loan Corporation specializes in helping clients who inherit properties qualify for Proposition 58 and avoid property tax reassessment when a third party loan is needed to equalize the distribution of a trust or estate. This allows you to keep a parents low Prop 13 tax base and save potentially thousands of dollars a year in property taxes. In fact, our average client saves over $6,000 a year in property taxes.

If you are inheriting home from a parent and are interested in keeping their Proposition 13 tax base, please call us at 877-464-1066.

Jay Rhein – Trust & Estate Loan Account Executive

Jay Rhein - Trust Loan Account Executive

Jay Rhein – Trust Loan Account Executive

Commercial Loan Corporation welcomes Jay Rhein, our newest Trust & Estate Loan Account Executive.

Commercial Loan Corporation is excited to welcome Jay Rhein to our Trust and Estate Loan team! Jay’s primary role at Commercial Loan Corporation is to assist clients, Attorneys and Trust Administrators in obtaining mortgages for trusts and estates. Our Trust & Estate Loans help beneficiaries and heirs take advantage of California Proposition 58’s exclusion for property tax reassessment and retain a parents low Proposition 13 tax base on an inherited home. This is accomplished by providing a trust or estate with the cash needed for an equal distribution of assets; one of the California Board of Equalization requirements for Proposition 58.

A few words from Jay Rhein

“I began my career in the real estate business when I was a young lad attending UCLA. I worked in the construction industry (pounding nails) during the summer to pay my way through college.

After I graduated with a degree in economics, my bride and I started our wine distribution business. We represented small family owned wineries. Working hard, we were able to get our wineries into all the major supermarket chains including Safeway, Vons, Albertsons and Ralphs.

For the past six years I have had the privilege of serving as a mortgage banker helping homeowners and business owners achieve their dreams and goals. My proudest moment was when I had the honor of stopping Bank of America from foreclosing the next day on a 104-year-old borrower. I was able to secure a reverse mortgage which will provide enough funds so she can stay in her home for another one hundred and four years.

My goal is to place my customers in the best possible financial position for their future while providing the top customer experience in the industry. Commercial Loan Corporation with its family values gives me the freedom to do this. In fact, the founder insists on it.”

Contact Information For Jay Rhein:

Jay Rhein
Account Executive
Dept: Trust & Estate Loans
(t) 714-442-8897
(e) jrhein@cloanc.com