Trust Loans & Sibling to Sibling Buyouts

Trust Loans

Trust Loans

How inherited property is to be shared by siblings, as stated in writing by parents in a Will, is a logical starting point for an estate.

Avoiding reassessment with irrevocable trust liquidity 

Sometimes, parents leave a larger share to one or two siblings and divides the balance of the estate among remaining beneficiaries. Whenever more than one sibling is left an inheritance involving property, all heirs and/or beneficiaries have to be in agreement as to how to proceed with that property – regardless how large or modest each beneficiaries’ share of the estate is.

When siblings are involved in an irrevocable trust liquidity solution – when you want to buyout siblings’ inherited property shares –  beneficiaries looking to buyout siblings have no choice but to consider the fact that an irrevocable trust loan can furnish liquidity and work in tandem with Proposition 19 to keep property reassessment low.  Something you can’t ignore, or simply walk away from.

You still have to get an appraisal for valuation of your inherited home and come to an agreement on an intra-family selling price. Then get final approval for financing… and distribute proceeds to all siblings wanting to sell out.

Knowing your options, and how to navigate the different stages in the process… is the challenging part.  Which is why you need an excellent trust lender and estate attorney — to help guide you through critical steps.

Beneficiaries looking to keep their inherited home should always get inherited property inventoried,  and valuation finalized… Plus:

•  Always  try to avoid intra-family conflict from reaching litigation, and mediate your estate situation to the point of reaching a cordial and equitable point of communication with your siblings.

•  Try to identify and enlist a reliable, established loan lender as soon as possible – who can project a realistic number with respect to property tax savings, with Proposition 19 working in conjunction with an irrevocable trust loan.

•  Consider all inheritance loan and refinancing options, such as an inheritance cash advance; probate cash advance assignment; trust advance; or irrevocable trust loan in concert with Prop 19. 

Under Prop 19 property tax relief, siblings need to consider:

1. How well all beneficiaries get along, or do not get along – and what the issues are that must be mediated and ironed out if resolution is to be reached…

2. What is agreed upon, with respect to the disposition of an inherited home…

3. How motivated siblings are to resolve problems – in order to reach final disposition of inherited property in a timely manner…

4. Who is insisting on selling off their inherited property shares, and who is determined to retain the family home…

5. When and if all sibling beneficiaries are in agreement, in terms of selling out or keeping inherited property. 

6. And lastly, as most of us know, an irrevocable trust has to be understood as an instrument that is profoundly different than all other trusts.

As we all know, a trust can be revocable, where a trustor can change or terminate the terms & conditions of the trust anytime.
When a trustor passes away a revocable trust becomes totally  irrevocable – no matter what the issues are.  When a trust becomes irrevocable nothing can be revised or changed – real property, beneficiaries and terms & conditions are locked in.  

So when a California irrevocable trust requires liquidation, it can be used in numerous ways that can greatly benefit trust estates, beneficiaries and families in general.

A trust loan is a loan offered typically by specialized private lenders directly to an irrevocable trust.

This type of loan utilizes property from the trust as collateral. To take out a trust loan, trust documents must permit trustees to use trust property as collateral for the loan.

Lenders like banks and credit unions have no interest in “providing liquidity” to irrevocable trusts in the state of California. This is mainly due to the complicated nature of this property tax relief solution, the lack of a personal guarantee, plus the various complex challenges involved in financing of this type. 

Private lenders, like Commercial Loan Corp, or trust loan property tax consultants like Michael Wyatt Consulting, for example, form a bridge for beneficiaries and trustees looking for liquidity in their trust.

As we always see in the final solution, an irrevocable trust can accept a loan for several reasons, the most important being to “furnish liquidity” in conjunction with CA Proposition 19 in order to provide beneficiaries with access to a low property tax base… guaranteeing low property reassessment, most importantly.

Along with enough capital to buyout siblings…  Commercial Loan Corp, for example, provides more cash than a realtor driven buyout with a third party buyer could possibly provide – given their 6% commission structure, transaction fees, fixer-upper costs, and other ancillary charges.  So everyone is able to walk away happy, as a result of a genuine win-win outcome.  And moreover, besides that, many eligible California homeowners are moving quickly on new CA property tax relief opportunities 2022

If you are in the process of inheriting a home, or recently inherited a home and would like to see if you are able to avoid property tax reassessment, you can reach Commercial Loan Corporation at 877-464-1066. Or use the following web form to learn more on trust loans and parent to child property tax transfers.