How to add funds to an Irrevocable Trust

Adding funds to an Irrevocable Trust for a sibling to sibling buyout

Add funds to an irrevocable trust

How do I add funds to an irrevocable trust?

When adding funds to an irrevocable trust in California you need to be cautious depending on that the purpose of adding the funds is. If ultimately one of the child beneficiaries (if multiple are involved) wants to inherit real estate, a third-party lender should be used if they want to transfer the parent’s low property tax base. Failing to do so could be viewed by the County Assessor as a sibling-to-sibling buyout if they inject their own money into the trust and jeopardize a full property tax reassessment exclusion. When obtaining a third-party loan, it is important to keep in mind that very few lenders will provide financing to an irrevocable trust. Most lenders will insist that during the lending process the home is removed from the trust and the loan be made to an individual as opposed to the trust once again putting the full property tax reassessment exclusion at risk.

Commercial Loan Corporation specializes in providing loans to Irrevocable Trusts. In fact, we are the #1 California Lender for trust loans. We can provide funding to an irrevocable trust for a variety of purposes, but the typical reason is to equalized the assets in a trust so that one of the children can keep the parents low property tax base and avoid reassessment. Are you, a sibling or a client in need of a trust loan? If so, call us at (877) 464-1066 or apply online. We will walk you through each step of the process and have established relationships with many of California’s Trust & Estate Attorneys.

Bridge Loans to Trusts

Bridge Loans to Trusts

Bridge Loans to Trusts

Bridge Loans to Irrevocable Trusts

A bridge loan is a sum of money lent by a lender to cover a short duration of time between two transactions. Bridge loans are typically used for the buying of one house and the selling of another or during the construction of a home. The bridge loans that we provide at Commercial Loan Corporation are done to help the beneficiary of a trust keep a parents low property tax base on an inherited home.

Can a trust get a bridge loan?

Yes, a trust can receive a bridge loan. That being said, very few lenders will make a loan to an irrevocable trust. Unlike other California lenders, we specialize in helping clients who require a loan on a property that is currently held in an irrevocable trust. We also provide bridge loans on properties that are currently in probate. Not only do we provide bridge loans, loans to irrevocable trusts and probate loans, but we can also provide the funds needed to prepare a home in a trust or estate for sale. We can also assist you in getting an immediate cash offer for a home if you prefer.

When you contact us, we can provide you with a free assessment of all of your options so that you can make the decision that works best for you. We are California’s top Trust and Estate Lender and have helped hundreds of clients avoid property tax reassessment on an inherited home with our bridge loans to trusts.

Trust Bridge Loans

Our trust bridge loans have been purpose designed to assist beneficiaries in taking advantage of the California Proposition 19 Parent to Child Property Tax Transfer. Prop 19 allows a parent to transfer their low property tax base to a child and avoid property tax reassessment on the inherited home. Commercial Loan Corp provides a bridge loan directly to the irrevocable trust or probate estate, with no personal guarantee requirement from the beneficiary inheriting the home. This bridge loan meets the California Board of Equalization equalized distribution requirement and avoids a sibling to sibling buyout, which can put your exclusion from property tax reassessment at risk. The bridge loan to a trust loan process is quick and easy. We are able to close a trust bridge loan in as little as 7-10 business days. Our trust bridge loans help clients avoid costly realtor fees and save on average over $6,500 in property taxes annually by avoiding reassessment. If you, a client or family member are inheriting a home and have questions about a bridge loan to a trust, please call us at (877) 464-1066 and we can answer all of your questions and provide you with a free quote on a trust bridge loan.

Parent to Child Property Tax Transfer in California

Parent to Child Property Tax Transfers in California

Parent to Child Property Tax Transfers in California

Perhaps the greatest benefit of California Proposition 58 and Proposition 19 is the ability those propositions grant to a parent allowing them to transfer their low property tax base to a child. On average avoiding property tax reassessment saves a child inheriting a home over $6,500 a year. In some situations that property tax savings means the difference between a child being able to afford keeping an inherited home or having to sell it.

Depending on the date of death of the parent who is transferring real estate to a child, the child may be able to take advantage of the Proposition 58 benefit or be forced to use the new Proposition 19 property tax transfer benefit. California Proposition 19 went into effect on February 16, 2021. The California Board of Equalization has created a chart (located here) to help you understand the difference between the Prop 58 and the Prop 19 parent to child transfer benefits. The two primary differences boil down to the ability to transfer a home that will not be used as a primary residence and the amount of property value that you are able to exclude from reassessment. Proposition 19 only allows a child to avoid property tax reassessment on a home that will be used as their primary residence, where Proposition 58 does not have that restriction. Additionally, Proposition 19 allows you to exclude the current taxable value plus $1,000,000; where Proposition 58 has no value limitations for a principal residence.

Often times when a trust is involved, a parent will leave a family home to multiple child beneficiaries. When that is the case and one of the children wishes to keep the family home and take advantage of their Proposition 58 or Proposition 19 property tax transfer benefit to avoid property tax reassessment, the trust may need to borrow money against the home so that an equal distribution on trust assets can be made. In many cases the California Board of Equalization will require an equal distribution of the trust assets be made in order to qualify for an exclusion from property tax reassessment. If there are not sufficient cash assets held in the trust, the trust will need to borrow the funds to make the equal distribution. Commercial Loan Corporation is one of the few lenders in California that will make a loan to an irrevocable trust.

We specialize in assisting beneficiaries and trust administrators when a loan to an irrevocable trust is required. If you would like to learn more about how a loan to a trust can help you avoid property tax reassessment on an inherited home, please call us at 877-464-1066.

Irrevocable Trust Loans

Lending to an Irrevocable Trust

Lending to an Irrevocable Trust

Commercial Loan Corporation is one of only a few California lenders that will lend directly to an irrevocable trust. So what is an irrevocable trust?

An irrevocable trust is a type of trust where its terms cannot be modified, amended or terminated under most conditions. Often times, an irrevocable trust will begin as a living trust and once the grantor passes, will turn into an irrevocable trust. An irrevocable trust designates a trustee and beneficiary(s). The trustee is the person who manages the trust and may also be one of the beneficiaries. An irrevocable trust is commonly used to pass assets to heirs while avoiding probate. When you transfer your assets into an irrevocable trust, you relinquish control of those assets. The trust becomes the owner of the assets at that point.

The reason why most lenders will not lend directly to an irrevocable trust is because the trust is the owner of the assets, as opposed to an individual. This become important when a child is inheriting a home from a parent and would like to use Prop 58, or Prop 19 to keep a parents low property tax base. The California Board of Equalization requires and equal distribution of assets be made when multiple beneficiaries are involved unless specific conditions are met. If there are not sufficient cash assets in the trust to make an equal distribution, then a loan against real estate in the trust will be needed to qualify for the parent to child transfer to avoid property tax reassessment.

That is where Commercial Loan Corporation comes into play. We specialize in lending to trusts and estates; specifically irrevocable trusts.  Our trust loans, allow one child to keep an inherited home with the parents low Prop 13 tax base in tact, while the other child beneficiaries receive an equal portion of cash. Everybody wins! By avoiding expensive realtor fees, each beneficiary on average receives and additional $15,000 in inheritance and the child keeping the family home saves on average $6,200 per year in property taxes.

If you, a family member or a client may be able to benefit from a trust loan, we are here to assist you and answer any questions you might have.  Please call us at 877-464-1066.

How to keep a low property tax rate on a home your inherited from your parent in California.

How to keep a parents property tax rate on an inherited home.

How to keep a parents property tax rate on an inherited home.

KEEP A LOW PROPERTY TAX RATE ON AN INHERITED HOME

When inheriting a home from a parent or grandparent, California Proposition 58 may allow you to avoid a property tax reassessment. Taking advantage of this Proposition 58 provision can save you thousands of dollars each year in property taxes.  In fact, our average client saves over $6,000 a year in property taxes.

In order to avoid a property tax reassessment, certain procedures must be followed and documents must be properly submitted to the county tax assessors office. The process can be complicated. This is especially true when the property is held in a trust or when multiple siblings are inheriting property, money or other assets from a parent. An even distribution of assets is required to qualify and a beneficiary can not contribute their own funds to make an equal distribution. This is where Commercial Loan Corporation can help.  We are one of just a few California lenders who provide loans that will not jeopardize a Proposition 58 approval. We are able to lend directly to a trust and do not require a personal guarantee.

Commercial Loan Corporation has a track record of success. We work with a California Property Tax Consultant who has over 15 years of experience working in the California Tax Assessors office. With his assistance we can help you solve even the most challenging cases and help you avoid a property tax reassessment. Call us at 877-464-1066 and let us help you keep a low property tax rate on an inherited home.

CALL 877-464-1066 FOR A FREE CONSULTATION

Loans to Trusts

Loan to a Trust

Loan to a Trust

Loans to Trusts

At Commercial Loan Corporation, we specialize in providing financing to Trusts. Our loan provides the cash needed for an irrevocable trust or estate to make an even distribution when one of the beneficiaries is inheriting a home as their share of the distribution. The California Board of Equalization requires that an even distribution be made to take advantage of Proposition 58’s Parent to Child Transfer and avoid a reassessment of property taxes. Exclusion for reassessment of property taxes allows a child to keep their parents’ low property tax payment. Our loan helps clients save on average over $6,000 per year in property taxes. In just a few short minutes we can help a client determine how much they could save by taking advantage of California’s Proposition 58’s Exclusion for Reassessment of Property Taxes.

Call Today For A Free Consultation: 877-464-1066

 

Printable Ad for Loans to Trusts: Loans to Trusts

Orange County Bar Event – Costa Mesa, CA

Orange County Bar Association Event

Orange County Bar Association Event, Costa Mesa, CA

Join Commercial Loan Corporation on October 10th, 2018 at the upcoming Orange County Bar Association event. The Orange County Bar Association Trust & Estates Section Presents “SO YOU THINK YOU CAN NEGOTIATE? Learn Skills and Techniques Leading to Successful Resolutions” at 5:30PM on 10/10/2018 in Costa Mesa, CA.

Mike Riggs, Senior Account Executive at Commercial Loan Corporation will be on hand to answer any questions you have on our Trust & Estate Loans. Commercial Loan Corp specializes in lending to Family Trusts and Estates in Probate. If you are unable to make the event, please call us at 877-464-1066. Our team can review a loan scenario with you or a client to see if they might benefit from one of our Trust & Estate loan programs. Often times, our trust and estate financing is used to equalize a trust or estate distribution to take advantage of Proposition 58 and avoiding property tax reassessment on a home that was inherited from a parent.

Our specialized Trust & Estate finance programs can help a client distribute their trust faster, provide cash for legal fees and save money! Our Trust Loans are typically less expensive than selling a home. That means more money for the beneficiaries and we can fund a Trust or Estate Loan in as little as 7 days!

On average we save our clients over $6,000 a year in property tax payments by avoiding property tax assessment on an inherited property. If you are looking for a loan to a Irrevocable Trust, Family Trust or Estate, please call us at 877-464-1066 for additional details or a free benefit analysis.

California Residential Property Tax Consultant

At Commercial Loan Corporation we specialize in assisting clients with the financing they need to keep a parents low property tax rate on an inherited property. Transferring a Parents of Grandparents property tax rate can be a extremely beneficial; in fact, on average we save our clients over $6,000 per year in property taxes. Taking advantage of the California Proposition 58 property tax benefits can be very complicated and we always advice that you use the services of a qualified Attorney or Resident Property Tax Specialist. With so much potential property tax savings on the line, you want to make sure that all of the rules are followed and that all of the documents are processed correctly. Failing to do so may disqualify you from an Exclusion From Property Tax Reassessment.

A residential property tax specialist and specializes in helping clients preserve a parents low Proposition 13 protected property tax rate when a home is transferred or inherited. Often times he works with clients where the inherited real estate is contained in a trust or is part of an estate. It can be a very complex matter. If the property is not transferred appropriately or the financing is not done in accordance with California law, you may become ineligible to retain a parents property tax base rate and the home may be reassessed at current market value.

California Property Tax Consultants work with the clients of attorneys, CPAs, financial planners, and real estate professionals to minimize real property tax assessments before or after transactions involving the transfer or purchase of real estate. One of the reasons why Property Tax Consultants are so valuable when it comes to keeping a parents low property tax rate is that he formerly worked for the Orange County Tax Assessor’s Office for almost 25 years. So he has the first hand experience to make sure you obtain the tax savings that you deserve. Prior to becoming a California Residential Property Tax Consultant, Michael worked as a Legal Analyst at the County Tax Assessors Office. During that time, Property Tax Consultants have observed many real estate transactions that had undesired results due to property owners either never consulting with counsel, or advisers were not familiar with property tax law and its consequences. A Property Tax Consultant in order to help advisers and their clients avoid those unintended results, and plan and structure their real property transactions to achieve their goals.

 If you are in need of Trust or Estate financing or are interested in preserving a parents low property taxes on an inherited home, please call us at 877-464-1066 so that we may assist you. We can help you put together a plan of action and review your potential property tax savings with you.

Loans to Trusts To Avoid Property Tax Reassessment

Trust Loans, Probate Loans and Estate Loans

At Commercial Loan Corporation we specialize in providing our clients with trust loans and estate loans. These trust loans are mortgages on real estate in a trust that provide liquidity to an otherwise illiquid trust at the time of distribution. This allows our clients to utilize Proposition 58 or Proposition 193 to transfer the property from a parent to child or grandparent to grandchild to avoid a property tax reassessment and maintain the existing low Proposition 13 protected tax rate. The following trust loan blog article provides information on California Proposition 13, Proposition 58, Proposition 193 and how Commercial Loan Corporation can assist you. For additional information or to begin the process of receiving a loan for your trust, please call us at 877-464-1066 or complete the trust loan information request form located here.

Proposition 13

Proposition 13 was passed by California voters on June 6, 1978. Property values were escalating in the 1970’s due to inflation. Property taxes were going through the roof because people were re-assessed annually at current market values. Proposition 13 froze property tax rates at 1976 levels and limited the increase in tax rates to 2% per year. Once a property was sold, the new tax rate was established at approximately 1% of the sales price and could go up no more than 2% per year.

Proposition 58 (and 193)

Proposition 58 became effective on November 6, 1986. It is a constitutional amendment approved by California voters which excludes from reassessment transfers of real property between parents and children.

Proposition 193 became effective on March 27, 1986. It is a constitutional amendment approved by California voters which excludes from reassessment transfers of real property from grandparents to grandchildren, providing that all the parents of the grandchildren who qualify as children of grandparents are deceased as of the date of transfer.

Why is this important?

Prop 58 and Prop 193 allows a child receiving a property from a parent (or grandparent) to avoid property tax reassessment. The child receiving the property will preserve the Prop 13 tax rate paid by their parents (or grandparents). The property tax savings for the child receiving the transfer of real property can be significant. Let’s say Mom and Dad has owned the family house for 20 years. If the parents bought the property for $200,000, their property taxes would probably be $2,900. That property could be worth $700,000 today. The property taxes would probably be $7,000. The difference is $4,100 per year.

What if the property being transferred is in a trust?

It doesn’t really matter that a property is in a trust. The transfer from a parent to a child will be viewed that same as a property not in a trust. The tricky part is when both parents have passed and there is more than one child (beneficiary). If the trust has assets other than the real property being transferred and those assets can be split among the other beneficiaries so that everyone gets an equal share; the child (beneficiary) taking the real property can probably qualify for the parent-child transfer exclusion afforded by proposition 58.

In the event that there are not enough other assets in the trust to equally divide the trust assets among the beneficiaries, the trust will need to borrow money so that there are enough assets to distribute equally to all the beneficiaries. This is called a 3rd party trust loan. This is where Commercial Loan Corporation comes in. CLC is a California Trust Loan provider and CLC loans help preserve a low property tax rate when taking a property out of a trust.

Even though the child beneficiary taking the real property may have enough cash to lend to the trust so an even distribution can be accomplished, it is viewed as a buyout of the other beneficiaries and the real property will probably be assessed at the current sale price. The trust is required to borrow from a 3rd party in this situation.

Pro Rata Distribution versus Non Pro Rata Distribution

A pro rata distribution of an estate is when each heir receives an equal portion of each asset in the estate. A non pro rata distribution of an estate is when each heir receives an equal proportion of the entire estate but not necessarily of each asset.

$1 million exclusion limit

There is no limit on the transfer of a personal residence.

There is a $1 million dollar limit for all other real property. This is based on the assessor’s value of the other properties as opposed to current market value. A parent may have used part of this exclusion in the past. The State Board of Equalization keeps track in a state-wide database. This can be checked by writing to:

State Board of Equalization
County Assessed Properties Division, MIC: 64
P.O. Box 942879
Sacramento, CA 94279-0064

For additional information on trust loans, probate loans and estate loans or to begin the process of receiving a loan , please call us at 877-464-1066 or complete the trust loan information request form located here.