Trust Loans & Loans to Irrevocable Trusts
CLOANC is the top provider of trust loans and loans to irrevocable trusts in California
Trust Loans
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An irrevocable trust is a type of trust typically created to help protect assets. The creator of the trust designates assets of their choosing to transfer over to a beneficiary or beneficiaries. Once established, irrevocable trusts are very difficult to change or dissolve. The creator forfeits ownership and authority over the trust and its assets. A trustee, is responsible for managing and overseeing an irrevocable trust. Due to the complexity of asset ownership in an irrevocable trust, very few lenders will lend directly to one, but that is what CLOANC specializes in.
Thanks to California Proposition 19, you can retain a parents low property tax base on an inherited home. When the parent held the property in a trust and multiple child beneficiaries are involved, you are likely to need a 3rd party loan to meet the California Board of Equalization Proposition 19 equal distribution requirements. That is where CLOANC comes in. We provide more 3rd party loans to irrevocable trusts than any other lender in California. On average our clients save over $6,519 per year in property tax savings. Call us at (877) 464-1066 for a free benefit analysis and learn how much you may be able to save.
Most banks and lenders are not willing to lend on a property 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 19 since the California Board of Equalization requires an equal distribution be made with no funds or personal guaranty from the acquiring beneficiary.
The good news is that CLOANC is the leading provider of trust loans and loans to irrevocable trusts in California. We work with the trustee or beneficiary and their legal representation to make sure that all of the goals of the members of the trust are met. A trust loan can be funded in as little as 7 days after we have received the required information from the trustee or Attorney. Importantly, we never charge any prepayment penalties or have any minimum interest requirements associated with our loans. This allows the acquiring beneficiary to refinance or payoff our mortgage as soon as desired with no penalty. If you require the assistance of a trust and estate attorney in your area, we can put you in contact with one who has experience dealing with California Proposition 19. For very complicated property tax situations, we can also provide you with the contact information of a California Property Tax Consultant who has over 20 years of experience working in a County Tax Assessors Office.
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Trust Loans and Loans to Irrevocable Trusts
Trust Loans in California – Loans to Irrevocable Trusts
California Trust Loans to Protect Your Inheritance and Avoid Property Tax Reassessment
Inheriting a family home through a trust can create financial challenges, especially when multiple beneficiaries are involved. Whether you need to distribute an inheritance, buy out siblings, pay trust expenses, or preserve a parent’s low property tax base, a California trust loan may provide the financing solution you need.
CLOANC specializes in providing loans directly to irrevocable trusts, allowing trustees and beneficiaries to access the equity in inherited real estate without first transferring the property out of the trust.
Unlike traditional mortgage lenders, which often require a property to be removed from an irrevocable trust before providing financing, CLOANC offers specialized trust loans designed to accommodate the unique requirements of trust administration and inheritance distributions.
Our financing solutions can help families retain inherited real estate, provide cash to beneficiaries, and potentially qualify for California Proposition 19’s parent-to-child property tax reassessment exclusion.
On average, CLOANC clients save over $6,519 annually in property taxes. Contact us today for a FREE Trust Loan Benefit Analysis to discover how much you may be able to save.
What Is a Trust Loan?
A trust loan is a loan secured by real estate owned by a trust. Rather than requiring an individual beneficiary to obtain a traditional mortgage, the lender provides financing directly to the trust through its authorized trustee.
Trust loans are commonly used when a trust holds valuable real estate but lacks sufficient cash to meet its financial obligations or distribute assets among beneficiaries.
For example, when three siblings inherit a family home through an irrevocable trust, one sibling may wish to retain the property while the others prefer to receive their inheritance in cash.
A trust loan can provide the funds necessary to facilitate the distribution, allowing the trustee to allocate cash and property according to the trust’s terms.
Trust loans can be used for several purposes, including:
- Providing cash for inheritance distributions.
- Facilitating sibling buyouts of inherited property.
- Preserving a family home rather than selling it.
- Paying trust administration expenses and outstanding obligations.
- Financing repairs or improvements to inherited real estate.
- Supporting properly structured Proposition 19 parent-to-child property transfers.
Loans to Irrevocable Trusts: Why Specialized Financing Matters
An irrevocable trust is a legal arrangement in which assets are held and managed by a trustee for the benefit of designated beneficiaries. Unlike a revocable living trust, an irrevocable trust generally cannot be freely modified or terminated by its creator.
When a parent passes away, a previously revocable living trust may become irrevocable, creating additional challenges when financing real estate held within the trust.
Many conventional banks are unwilling to provide loans directly to irrevocable trusts because of the complexities associated with trust ownership, trustee authority, and loan documentation.
Instead, these lenders may require the property to be transferred into an individual’s name before financing can be obtained.
Unfortunately, when the goal is to preserve a parent’s existing property tax base, transferring ownership prematurely can create complications and potentially jeopardize valuable property tax benefits.
CLOANC specializes in lending directly to qualifying irrevocable trusts, helping trustees and beneficiaries obtain financing while maintaining the ownership structure needed for an appropriate trust distribution.
Proposition 19 Trust Loans: Keep Your Parent’s Low Property Tax Base
California Proposition 19 significantly changed the rules governing inherited property and parent-to-child property tax transfers.
Under Proposition 19, qualifying children who inherit a parent’s primary residence may retain some or all of the parent’s existing Proposition 13 assessed property value, potentially avoiding a substantial increase in annual property taxes.
However, eligibility depends on several requirements, including the property’s use as the parent’s principal residence, the child’s use of the inherited home as their own principal residence, applicable value limitations, and required filings.
When multiple siblings inherit a home through a trust, the manner in which the property and other trust assets are distributed can also affect the transaction’s property tax treatment.
A properly structured third-party trust loan may allow the trustee to distribute cash to beneficiaries who do not wish to retain the property while distributing the home to the beneficiary who intends to occupy it.
This can help avoid a separate sibling-to-sibling purchase that might otherwise trigger reassessment of the ownership interests acquired.
A trust loan is not required for every Proposition 19 transfer. However, when the trust lacks sufficient liquid assets to make the intended distributions, specialized financing may be an important part of the overall inheritance plan.
How a Trust Loan Helps With a Sibling Buyout
One of the most common reasons families obtain an irrevocable trust loan is to resolve an inheritance involving multiple siblings.
Consider a California family home valued at $1,500,000 that is inherited equally by three children.
One child wants to keep the family home, while the other two would prefer to receive their inheritance in cash.
Assuming the home is the trust’s only asset, there are no existing debts, and the trust authorizes the proposed distribution, the trustee may be able to obtain a $1,000,000 trust loan secured by the inherited property.
The trust could then distribute $500,000 to each of the two beneficiaries receiving cash while distributing the home, subject to the loan, to the beneficiary retaining the property.
This approach allows the siblings to receive their respective shares of the inheritance without requiring the family home to be sold.
When appropriately structured and when all statutory requirements are satisfied, the transaction may also preserve eligibility for the Proposition 19 parent-to-child property tax exclusion.
For families with substantial differences between a property’s current market value and its existing Proposition 13 assessed value, the long-term savings can be significant.
How Does the California Trust Loan Process Work?
CLOANC has developed a streamlined lending process designed specifically for trustees, beneficiaries, attorneys, and estate planning professionals.
Step 1: Free Trust Loan Benefit Analysis
Contact CLOANC to discuss the inherited property, trust structure, beneficiaries, and financing objectives. Our lending specialists will help evaluate whether a trust loan may provide a practical solution.
Step 2: Trust and Property Review
We review the relevant trust documentation, trustee authority, property information, and proposed use of loan proceeds to determine the appropriate financing structure.
Step 3: Loan Approval and Documentation
Once the transaction is reviewed, CLOANC prepares the necessary lending documents and coordinates with the trustee and any participating legal or tax advisors.
Step 4: Trust Loan Funding
CLOANC can fund qualifying trust loans in as little as seven business days after receiving the required documentation and completing the approval process.
Step 5: Distribution and Loan Repayment
Following funding, the trustee can use the loan proceeds for authorized trust purposes. Depending on the transaction, the beneficiary receiving the property may subsequently refinance or repay the trust loan.
CLOANC trust loans have no prepayment penalties or minimum interest requirements, allowing borrowers flexibility when arranging longer-term financing or paying off the loan.
Why Choose CLOANC for Your Irrevocable Trust Loan?
CLOANC is a California trust and estate lending specialist with extensive experience providing loans secured by inherited real estate.
Our financing programs are designed specifically for the circumstances that traditional mortgage lenders often cannot accommodate.
Benefits of CLOANC Trust Loans
- Direct lending to irrevocable trusts: Obtain financing without necessarily transferring property out of the trust.
- Proposition 19 financing expertise: Specialized experience with inheritance distributions and parent-to-child property tax planning.
- No personal guarantee requirements: Qualifying trust loans can be structured without a personal guarantee from the acquiring beneficiary.
- No traditional income or credit score requirements: Financing eligibility focuses on the property, trust structure, and transaction requirements.
- Fast funding: Qualifying loans may close in as little as seven business days.
- No prepayment penalties: Repay or refinance without an early payoff penalty.
- Free benefit analysis: Understand the potential advantages and costs before deciding whether a trust loan is appropriate.
We regularly work with California trustees, trust administrators, estate planning attorneys, property tax consultants, and beneficiaries to facilitate complex inherited property transactions.
Frequently Asked Questions About California Trust Loans
Can an irrevocable trust get a mortgage loan?
Yes. An irrevocable trust can obtain a mortgage loan when the trustee has the necessary authority and the property meets the lender’s requirements. CLOANC specializes in loans secured by California real estate held in irrevocable trusts.
Can I borrow money from a house held in a trust?
A trust may be able to borrow against the equity in real estate it owns. The trustee generally arranges the loan on behalf of the trust, subject to the trust’s governing documents and applicable law.
Do trust loans require a credit check or proof of income?
CLOANC offers specialized trust loan programs that do not rely on traditional personal credit score or income requirements. Approval depends on the property, trust structure, available equity, and other underwriting considerations.
Can a trust loan help avoid property tax reassessment?
When used as part of a properly structured inheritance distribution, a third-party trust loan may help preserve eligibility for California Proposition 19’s parent-to-child property tax exclusion. The loan itself does not guarantee an exclusion but we work directly with your Attorney or Property Tax Specialist to insure you qualify for the full benefit you are entitled to. C Loan C, has helped more clients than any other Trust and Estate lender in California.
Can a trust loan be used to buy out siblings?
Yes. A trust loan can provide cash to a trust so the trustee can make authorized distributions to beneficiaries while another beneficiary receives the inherited property. This is often referred to as an inheritance equalization loan.
How quickly can CLOANC fund a trust loan?
CLOANC can fund qualifying trust loans in as little as seven business days after receiving the necessary documentation and completing the approval process. Actual funding times depend on the circumstances of the transaction.
Get a FREE California Trust Loan Benefit Analysis
Don’t let a lack of liquidity force the sale of an inherited family home or jeopardize valuable property tax benefits.
Whether you need a loan to an irrevocable trust, financing for an inherited property sibling buyout, or assistance evaluating a Proposition 19 parent-to-child transfer, CLOANC can help you explore your options.
Our trust and estate lending specialists will review your situation, explain the available financing solutions, and help you determine whether a trust loan makes financial sense.
Call (877) 464-1066 today for your FREE Trust Loan Benefit Analysis.
CLOANC – California’s Trust and Estate Lending Specialists.
Property tax exclusion eligibility is determined by applicable law and the county assessor. Trust loan approval is subject to underwriting, trustee authority, and transaction requirements. CLOANC does not provide legal or tax advice.
