When you are considering keeping an inherited home from a parent and need to borrow money to buyout siblings or beneficiaries, it is important to make sure that it makes financial sense to do so. To assist you in doing so, we created the Commercial Loan Corporation Trust & Estate Loan Benefit Calculator.
Our trust and estate loan benefit calculator will help you quickly and easily determine if it makes sense to apply for a Proposition 58 exclusion from reassessment and take out a trust or estate loan. The loan benefit calculator compares your property tax savings to your estimated loan expenses and determines approximately how long it will take to recover those costs. If you plan on keeping the home longer than it will take to recoup the fees, then the loan is of benefit; if not then it would make more sense to not conduct the loan.
Dealing with Trusts and Estates can be a complicated matter. It can go from complex to incomprehensible if you do not understand the terminology. To help you better understand, we have compiled a list of some of the most common terms used in trust and estate matters to assist you. If you need any additional clarification, we are here to assist you. Please call us at 877-464-1066 for any needs you may have.
Common Terms For Trusts And Estates
Appointer – The appointer is the person who can appoint a new trustee or remove an existing one.
Appointment – The act of appointing, giving an asset from the trust to a beneficiary; or the name of the document which gives effect to the appointment. The trustee’s right to do this, where it exists, is called a power of appointment. Sometimes, a power of appointment is given to someone other than the trustee, such as the settlor, the protector, or a beneficiary.
Beneficiary – A beneficiary is anyone who receives benefits from any assets held by the trust.
Bridge Loan – A bridge loan is short term financing that is typically paid back or refinanced. Often times the term on a bridge loan can range from 3 to 12 months.
Estate Planning – The process of arranging ones property and affairs to insure their disbursement in the most effective way possible.
Power of Attorney – A power of attorney is a legal instrument that empowers another person as agent to deal with one’s property and affairs.
Executor – The one nominated in a Will and or appointed by Probate Court to manage and distribute a decedent’s estate in accordance with the terms of the Will.
Fiduciary – A fiduciary is a person to whom property or power is entrusted for the benefit of another.
Proposition 13 – California Proposition 13 is a constitutional amendment enacted in 1978. The Proposition 13 Amendment limits the tax rate increase that can be charged annually on real estate in California. The proposition restricts the annual increases of assessed value of real property to an inflation factor, not to exceed 2% per year. California Proposition 13 also prohibits 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.
Proposition 58 – California Proposition 58 allows for the exclusion for reassessment of property taxes on transfers between parents and children. If the sale or transfer of real property 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. Proposition 58 allows the new property owner to avoid property tax increases when acquiring property from their parents. The new owner’s taxes are instead calculated on the established Proposition 13 factored base year value, instead of the current market value when the property is acquired from the parent.
Protector – A protector may be appointed in an express, inter vivos trust, as a person who has some control over the trustee usually including a power to dismiss the trustee and appoint another.
Settlor – This is the person or persons who creates the trust. They may also be known as a Grantor.
Trust – A trust is an arrangement in which ownership of assets is transferred to a Trustee, who thereafter has a fiduciary duty to distribute the trusts assets to the beneficiaries of the Trust.
Trust Deed – A trust deed is a legal document that defines the trust such as the trustee, beneficiaries, settlor and appointer, and the terms and conditions of the agreement.
Trust Distributions – A trust distribution is any income or asset that is given out to the beneficiaries of the trust.
Trustee – A person, corporation who administers a trust. A trustee is considered a fiduciary and owes the highest duty under the law to protect trust assets from unreasonable loss for the trust’s beneficiaries.
If you require a third party bridge loan to take advantage of the benefits of proposition 58, please call us at 877-464-1066 so that we may assist you.
Are you are considering taking out a third party loan in order to equalize a trust or estate distribution and take advantage of California’s Proposition 58’s exclusion for Property Tax Reassessment? The act of doing so has saved some of our clients thousands of dollars annually and in most situations it makes sense to do so if you plan on keeping the home for more than just a few years. To make sure that the loan is financially beneficial, it is important to compare the costs of the loan with the expected property tax savings. At Commercial Loan Corporation we do not want to provide a loan to a client if it is not in their best interest and that is why we have created the Trust & Estate Loan Benefit Calculator.
Our easy to use trust mortgage calculator only requires you to enter a few fields of information and then does the rest of the work for you! Simply input the current value of the property in question, the number of siblings who have an interest in the property, the existing low Proposition 13 protected property tax rate and your desired loan amount. From there we can estimate everything from your Prop 58 Property Tax Savings, your proposed loan costs and the time it will take you to recoup your loan expenses. Here is an example of what our easy to use Trust Loan Benefit Calculator looks like:
Trust Loan Calculators
Try Out The Trust & Estate Loan Benefit Calculator
Our Trust & Estate Loan Benefit Calculator is free and easy to use. Click here to try it our for yourself. If you have any problems using the calculator, or have questions on trust or estate loans or would like to start the loan process, please call us at 877-464-1066. The Trust Loan Calculator is meant for estimation purposes only. When we speak with you, we will provide you with a detailed trust loan cost estimate and help you to determine you exact Proposition 58 property tax savings. Often times we are able to complete your trust loan process in under 10 days!