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.

What is Trust & Estate Distribution Optimization?

Trust Distribution Optimization

Call 877-464-1066 to Optimize Your Trust or Estate Distribution

Commercial Loan Corporation does more than just provide mortgages to Trusts and Estates. We also optimize trust and estate distributions!

What does that mean? Well, we can significantly increase the funds that are distributed to the beneficiaries of a trust or estate. In fact, on average we increase the funds a Trust or Estate distributes by over $40,000.

How we increase distribution funds is simple. We provide a loan directly to the Trust or Estate enabling a beneficiary to keep a family home and providing an equal share of cash to the other beneficiaries. Our Trust Loan eliminates the need to sell a parents home, avoiding the costs association with fixing up a home for sale, costly realtor expenses and seller related closing costs. This ends up being an incredible savings that all the beneficiaries of the trust or estate are all able to share in. Best of all, one of the beneficiaries is able to keep the family home and utilize California Proposition 58 to preserver a parents low Proposition 13 tax base saving on average $6,200 per year in property taxes.

Allow us to optimize your trust or estate!

If you, a family member or a client might be able to benefit from one of our trust and estate loans, please call us at 877-464-1066. We can provide you with a FREE SAVINGS ESTIMATE!

We Make Loans To Irrevocable Trusts Easy

California Lender for Loans to Irrevocable Trusts - The Cash You Need To Distribute A Trust

Commercial Loan Corporation is a California Lender specializing in Loans to Irrevocable Trusts. We lend the cash you need to distribute a trust and receive your proposition 58 exclusion from property tax reassessment on an inherited home.

Loans to Irrevocable Trusts in California

When it comes time to distribute an irrevocable trust and funds are needed to make an equal distribution, you will find that most lenders are unwilling to lend on real estate that is held in a trust. This becomes extremely problematic if you plan on filing for a California Proposition 58 exclusion from property tax reassessment on real estate being inherited from a parent.

One of the requirements to qualify for an exclusion from property reassessment is for the trust to make an equal distribution of the trust assets to all child beneficiaries. Often times that is not possible to do if one of the trust assets is an expensive piece of California real estate. In the situation where a home is creating an unequal trust distribution, a mortgage or third party loan must be taken out to infuse the trust with enough cash so that the equal distribution can be made. That way one child receives the encumbered property while others receive cash and or other assets, equalizing the distribution of the trust. The state does not allow for the acquiring beneficiary to use their own funds to equalize the distribution. Doing so would create a sibling to sibling buyout and make the beneficiary ineligible for an exclusion from reassessment. That is why a third party loan is required. The problem is that most California lenders will require that the property be removed from the trust in order to lend on the home. Unfortunately, once that is done, you have jeopardized your ability to qualify for the Prop 58 property tax reassessment exclusion since the assets of the trust were distributed unevenly at that point.

The solution is to have a mortgage placed on the home while the property is still held in the irrevocable trust. That is where Commercial Loan Corporation comes in. We are a leading California lender of mortgages for homes held in an irrevocable trust. What makes us unique is that we lend to the trust as opposed to a beneficiary; allowing the beneficiary to qualify for the California Proposition 58 exclusion from property tax reassessment on a home inherited from a parent.

If you, a client, or someone that you know is in need of a loan to a trust, please have them call us at 877-464-1066. We specialize in the process and can answer any questions that they may have. We can also provide them with a free loan benefit proposal. The proposal compares the cost of the trust loan to the benefits received from a Prop 58 parent to child property transfer, ensuring that the trust loan is beneficial.  We can also determine how much additional funds you would receive by maximizing your trust distribution. On average we help clients distribute an additional $42,000 to beneficiaries my maximizing their trust distribution.

Call Us At 877-464-1066