On Oct. 2nd, 2020, Property Tax Transfer Trusts sat down with Account Representative Abe Ordaz from Commercial Loan Corp, in Newport Beach, California; to discuss his routine with trust and estate attorneys, trust administrator and beneficiaries, explaining the trust loan / Proposition 58 funding process…
Property Tax Transfer: Abe, thank you so much for sitting down with me today to chat about your work at Commercial Loan Corp and how you assist clients when it comes to using California Proposition 58 to transfer a parents low property tax base to a child who is inheriting a home.
Abraham Ordaz: Sure, my pleasure.
Property Tax Transfer: Abe, who do you generally speak to when it comes to taking calls from prospects?
Abraham Ordaz: I speak to a variety of involved parties when it comes to helping a client transfer a parents low Prop 13 property tax base from a parent to a child. Often times the conversation begins with a Trust Administrator or a Trust Beneficiary who is interested in using Prop 58 to transfer a property tax base from a parent to a child on an inherited property. After that initial conversation it is common for me to also have a conversation with the Trust & Estate Attorney who is assisting them with the distribution of the trust or estate.
On occasion beneficiaries do not have an attorney who is currently working with them and I am able to refer them to one in their area who is familiar with the Proposition 58 Parent to Child Property Tax Transfer process and who can help them secure their property tax transfer benefit. At Commercial Loan Corporation we have helped hundreds of clients by providing them with a loan to an irrevocable trust so that an equal distribution can be made and they can meet the requirements set by the California Board of Equalization to qualify for the Proposition 58 property tax transfer benefit.
Property Tax Transfer: Are your clients and attorneys usually familiar with trust loans, and how they work with the California Proposition 58 process?
Abraham Ordaz: Many of the Attorneys that I work with are familiar with the Proposition 58 process, as well as Proposition 13 and the need for a trust loan to equalize a distribution when a trust or estate does not have sufficient liquid assets. In fact, many of my clients are referred to me by their trust and estate Attorney.
We are one of the only California Trust and Estate Lenders who will lend directly to an Irrevocable Trust with no personal guarantee from the acquiring beneficiary and we are the only California lender that I am aware of that specializes in these types of transactions, specifically to help our clients secure every single Proposition 58 property tax benefit.
That’s the reason I get so many Attorney referrals. Attorneys want to make sure their clients are in good hands, when it comes to something this important – and that the process is done 100% correctly so that the client will qualify for the Proposition 58 parent to child exclusion, or the parent to child exemption, from property tax reassessment. Attorneys are well aware that we typically help clients save more than $6,000 per year in property taxes on an inherited home. Without exception, that’s the bottom line critical issue for them!
Property Tax Transfer: Abe, that is fantastic that you have developed such great relationships with Trust & Estate Attorneys. Do you usually provide them with an estimate on how much you would be able to save their clients when it comes to property taxes?
Abraham Ordaz: Yes, we provide a free cost benefit analysis for each client. It tells them exactly how much we expect their client to save in property taxes each year as opposed to if their property were to be reassessed. At that time we also provide them with a free quote for the trust loan so that we can make sure it is in their best interest. In most cases it is of great benefit and we generally save our clients over $6,000 per year in property taxes by helping them keep a parents low Prop 13 property tax base.
Property Tax Transfer: That’s significant. Do you get into the various particulars with Proposition 58, and how that works in concert with loans to trusts?
Abraham Ordaz: Yes, we break everything down into very simple terms so that the Proposition 58 property tax transfer and trust loan process are all easy to understand. That is one of the reasons why so many Trust and Estate Attorneys who deal with California Proposition 58 love to work with us.
Property Tax Transfer: Got it. Abe, how do you help your clients who are interested in keeping a parents low property tax base on an inherited home understand how the trust loan and Proposition 58 parent to child transfer benefits work, keeping the initial inheritance property transfer taxes down, buying out siblings’ property ownership shares, and so on? Yet keeping it very simple.
Abraham Ordaz: I start with the basics of Proposition 58 and the California Board of Equalization requirements for a Parent to Child Property Tax Transfer. I then help them determine how much their trust or estate will need in order to make an equal distribution. After that we review all the numbers together and I answer any questions they may have on the process. Next we get their Attorney involved so that they can handle all of the legal aspects of the Proposition 58 parent to child exclusion and provide us with all of the required information for the trust or estate.
Lastly, we provide them with the funds needed so that an equal distribution can be made in order for them to meet that qualification requirement for Prop 58. The Attorney or Property Tax Consultant then helps them submit their property tax transfer request to the County Assessors office so that they can secure their parents low property tax base.
Property Tax Transfer: At the end of the day it’s really just all about saving money on property taxes for clients, isn’t it. It’s a complex process, but the motivations remains very simple, doesn’t it?
Abraham Ordaz: Yes, bottom line, it’s a simple matter for these clients and lawyers. It’s all about how we can help clients save money on property taxes – to keep their family home. I help explain all this clearly to the heirs that want to keep their inherited property.
Property Tax Transfer: Yes I see. Abe, how do you explain why the trust is so crucial to this entire process?
Abraham Ordaz: Typically when attorneys ask about the trust loan process – I tell them our loan goes directly to the trust… and follows the property. Conventional lenders want to take to take the property out of the trust – but once the property is taken out of the trust, this often triggers a reassessment… So if you took a cash loan from a traditional bank for example – you’d end up putting the property in the beneficiary’s name and thus get reassessed at current property value. Which in most cases raises the property tax rate significantly. If the property was purchased say 20 years ago, the property tax would be significantly higher today.
Property Tax Transfer: Got it. Abe, do you get into the customer service aspect at all? I understand that a very special kind of customer service is critical to this process, to be successful, so to speak, with each family.
Abraham Ordaz: Yes… Customer service is the most important aspect to our business and we try to be our best version of ourselves for every client regardless of the size of the loan. Everyone is treated equally and respectfully. Everyone that joins the Commercial Loan Corp family, as it were, is a V.I.P. client!
Property Tax Transfer: That’s very interesting and a rare thing to find these days in this business climate. Well, we want to thank you so much for sitting and chatting with us today. We really appreciate it.
Abraham Ordaz: It’s my pleasure. Thanks for having me.