Best CA Lender For A Proposition 58 Loan

California Lenders for Irrevocable Trusts

California Lenders for Irrevocable Trusts

When Should a Trust Lender Enter the Picture?

There are many ordinary, middle-income families, often referred to as “trust fund heirs” who put their assets into a trust with the help of an experienced trust lender like Commercial Loan Corp. When Mom or Dad passes away, and the property is held in trust,  some beneficiaries either sell their inherited property or they keep the property and, through  a trust loan and Proposition 58 tax benefits, manage to lock in a low property tax base, and frequently buyout an inherited property from co-beneficiaries, to be able to own an inherited  home without difficulties and complications from shared property ownership. 

On the other  hand, if beneficiaries in that position decide they’d prefer to sell the property directly to an outside buyer, instead of receiving a typically higher payment from a trust loan – then those beneficiaries will get significantly less money due to realtor fees (typically 6%) when the property sells. 

Interestingly enough, beneficiaries will generally net, on average, $16,400 or more by not selling the property – and instead having at least one sibling, a co-beneficiary, take advantage of Proposition 58.  Moreover, the average family estate will net $45,000+ more than if the property was sold outright to an outside buyer, with the  revenue from that sale being divided evenly between the  beneficiaries.

Higher taxes imposed on families by Proposition 19 will tend to compel a great deal of beneficiaries to sell their inherited property, even if their preference is to keep  the old home and/or land.  Naturally, this is often good for realtors, who will tend to bank more commission revenue from increased sales.  However It’s not good for a middle class or working class family who is suffering the loss of a generally beloved Mom or Dad.

A trust lender usually enters the picture when enlisted by a beneficiary, or beneficiaries, who wish to keep their inherited property, while buying out owned shares of the same inherited home, mutually inherited by siblings.

Trust lenders who run their practice with integrity generally work with siblings that have lost a parent and are  helped a great deal by the California Constitution’s provision that serves to protect beneficiaries from owing  thousands of dollars in property taxes,  as they settle estate or trust business matters and typically complicated financial issues.

A trust loan introduced into this type of estate or trust equation allows a beneficiary or beneficiaries, often referred to as “trust fund heirs” by realtors and real estate attorneys, to retain the home they have happily inherited from their Mom or Dad – safely and securely, at a nice low property tax base. 

Meanwhile, without having to actually sell the property, co-beneficiaries walk off happy as clams, with more cash in their pocket having had a loan to an irrevocable trust used to buyout their shares in their inherited property – than if the property had been sold to an outside buyer, at current market value. 

Middle class beneficiaries typically do their own research on how to protect their inheritance from the tax man… On property tax breaks that make real sense, on trust lenders when inheriting property taxes; on property tax transfer and estate planning; and usually on their legal right to keep parents property taxes as well as having the ability to transfer parents property taxes at the same low tax rate that their parents had. 

Many beneficiaries will conduct their own research on property tax benefits first (prior to going to a trust lender) on how to avoid property tax reassessment, on Parent to Child Transfer benefits and  the complex Parent to Child Exclusion (from current tax evaluation). 

Beneficiaries gravitate to info-sites such as the state government BOE site at https://www.boe.ca.gov  or to a well known trust lender like the Commercial Loan Corp firm we mentioned here, they can also be reached at 877-464-1066; generally due to their reputation as a firm with a family  atmosphere, where clients all seem to get treated like V.I.P.s  regardless of their net worth or the value of their inherited property.

Prop 58 Loans

Prop 58 Loans

Prop 58 Loans and Loans to Equalize Trusts

It has been an interesting piece of California history, concerning people who have been  involved in the struggle for, or against, Proposition 19 in 2009–2010 which was not voted into law… as well as the next version of Proposition 19 in 2020, which was voted into law, just barely.

Moreover, Proposition 19, 2020 was promoted in a rather deceptive and  confusing manner, along with a measure called Proposition 15, which did not pass or, as you know – commercial property owners in California would no longer be able to avoid property tax reassessment.

As you also probably know, Proposition 19, 2020 managed to revise certain property tax breaks within Proposition 58, such as the “Parent to Child Exclusion, or, as tax attorneys like to call it, the “Parent to Child Exemption”.

At any rate, there was far too much focus on the recreational use of marijuana surfacing during the 2009–2010 version of CA Proposition 19. This battle descended into a petty conflict involving decade-old personal bias and social prejudice characterizing marijuana as a “socially destructive, addictive drug” (which it apparently is not, according to pharmacological experts) and placed in the same class as crack cocaine or meth-amphetamine, which are indeed socially and personally destructive drugs.

It does seem that the real purpose of Proposition 19 in the 2010 version, away from the grey area of “recreational use of marijuana” which the debate became mired in – was to try to generate $1.5 billion or more for state violent crime fighting needs.  Due to a great deal of personal bias, this never happened. Which is unfortunate, as the state could have used the extra money for legitimately battling violent crime associated with genuinely harmful drugs; as opposed to rather benign couch-potato pot smoking. 

Everyone who owns property in California regarded Proposition 58, voted into law Nov 4 of 1986, as untouchable, sacrosanct, a political third rail not to be touched. It has served to protect homeowners whose debt is at or exceeds $8,500 in additional property taxes, while settling financial affairs after a parent, who has left property to heirs, has passed away.  Proposition 58 also protects a property tax benefit called a “Parent to Child Exclusion” or Exemption, as we have mentioned… allowing beneficiaries inheriting property to avoid property tax reassessment at current market rates.

Moreover, Proposition 58 allows beneficiaries who wish to keep inherited property in their family to buyout co-beneficiaries’ property shares, through a trust loan, and helps those looking to keep their inherited home also retain a Proposition 13 protected low property tax base that their parents paid.

With the advent of Proposition 19, after a long rather disingenuous marketing campaign, middle class families woke up to realize that some of the benefits they thought were fully protected have been watered down; that you will need to move into the house you inherit from parents within a year, as a primary residence, or lose your Parent-to-Child Exclusion.  So it’s still there… but you have to keep an eye on the calendar to avoid losing the tax break altogether. 

So all of a sudden, after both Prop 15 and Prop 19 were proposed… California property owners began to worry, for the first time in decades, about possibly losing the right to keep parents property taxes for themselves, at a nice low rate…It is unthinkable, as expensive as California is, with income tax and other taxes as high as they are – to even consider that we might ever lose our right to a property tax transfer from parents, at low Prop 13 rates; or transfer of property between siblings.  Fortunately for California, this did not occur.

After Proposition 19 was passed, Californians were extremely relieved to see that they would be still have the right to get a loan to an irrevocable trust, in conjunction with Proposition 58; to be able to buyout property shares from co-beneficiaries, as the same simple transfer of property between siblings – known as “buying out siblings’ property shares” or a “sibling to sibling property transfer”, when co-beneficiaries decide to sell their inherited property to an outside buyer.

It was most likely due to notable professionals who supported property tax relief and Prop 58, that Proposition 19 was prevented from going too far. This can be verified at fact-based property tax  blogs like this one, Property Tax Transfer,  and the new Op-Ed oriented micro-site, Loan To A Trust, specifically addressing issues, opinions and fact-based information on Proposition 13 and Prop 58 at Websites belonging to real estate attorneys supporting CA property tax relief, such as property tax specialists like Michael Wyatt and his team of specialists. And certainly thanks to Prop 58 experts and trust lenders with applications for a trust loan, for transfer of property between siblings… that look something like this: https://cloanc.com/apply-online
 
It goes to show us that with some stiff opposition to unreasonable tax measures looking to squash property tax relief in California – even with millions of dollars from the California Legislature and organizations supporting special interests like realtors, such as the CA Association of Realtors (C.A.R.), conspiring tax measure that  attempt to unravel Proposition 58 and/or Proposition 13 can be stopped.  Perhaps not completely; yet at least to a good degree.

PART ONE: Surviving CA Proposition 19

California Proposition 19 2020 Election

California Proposition 19 2020 Election


Californians are anxiously waiting to see if voters pass or sink CA Proposition 15, affecting business and commercial property owners by specifically removing their ability to legally avoid property tax reassessment; as well as  Proposition 19, which is designed to unravel the “parent to child exemption” or “parent to child exclusion” (from current, reassessed property tax rates).

In fact Californians are wondering right now, if Proposition 19 passes, how much Proposition 58 will be affected; and how they will be able to get a trust loan to buyout siblings who wish to sell mutually inherited property.  Or exactly how they will be able to work with Proposition 58 to lock in a low property tax base rate, if Prop 19 passes. Companies like Michael Wyatt Consulting or Lucas Real Estate, or Commercial Loan Corp, are fielding questions like this as we speak. 

If Prop 19 passes, California can say goodby to any property tax transfer activity from one family member to another… there will be no way to transfer parents property taxes at a nice low base rate, in fact inheriting property taxes from parents to avoid property tax reassessment or the right to keep parents property taxes with a parent to child exemption will, sadly, be a thing of the past. 

If voted into law, as the LAO (Legislative Analyst’s Office) tells us, these  property tax measures will, in effect, repeal popular inter-generational transfer protections guaranteed by Proposition 58’s parent-to-child exclusion and Proposition 193 (grandparent to grandchild exemption) property transfer tax breaks – upending tax relief protections that Californians have depended on for decades.

Proposition 15 removes property tax breaks for landlords and other business  property owners – which, if voted into law, would not only directly affect business and commercial property owners, impacting stores, gas stations, supermarkets, etc., frequented every day by consumers – but will impact everyone in California.  Not only for countless people renting units in apartment buildings all across the state, but also for tenants renting commercial properties and offices in commercial buildings will be paying much higher property tax, and therefore will be forced to raise their prices.  Hence,  the cost of goods and services will go up in all 58 counties in the state. If Prop 15 passes, prepare to pay significantly higher prices, basically for everything – for rent, gas, food, air & ground travel, clothes, electronics, movies and computer entertainment, cel. phones…  you name it!

This leaves us at roughly 50,000 to 60,000 families in California that will be victimized economically by unreasonably high property taxes… in the midst of a Covid-19 pandemic no less.  Obviously, many middle class families will  be unable to keep inherited property due to property tax hikes… and, among other difficulties, will be generally unable to afford decent health coverage that includes preexisting conditions… unless they’re over 65 and have access to Medicare – unless the ACA (“Obamacare”) has been watered down, as Republicans have repeatedly promised to do… and this is on the record.  So people in California are nervous; as are folks nation-wide.   

On top of this crisis for California home owners – if Proposition 15 passes, tenants that don’t  own but pay rent will suffer from increased rents – as Prop 15 will unravel commercial and business property owners’ ability to avoid property tax reassessment at current rates. Business property owners and landlords will no longer be able to retain a low property tax base-rate, such as  home owners supposedly will continue to do – although most of us are not entirely convinced about that. Once the door has been opened, so to speak, do we really believe that the powers that be in California, the Legislature, and their realtor colleagues, are simply going to stop there? 

As far as Proposition 19 is concerned, most middle class beneficiaries and  families inheriting real property from their parents would be forced to sell that  property within the first year, as Prop 19 dictates, plus most beneficiaries or heirs will be unable to cover increased transfer costs and, in particular, yearly hiked up property taxes.  Hence, they are doubly motivated to sell inherited property many would much prefer to keep. 

Opponents of CA Proposition 13 repeatedly offer up the tired tale about the Bridges family using Prop 13 to transfer a pricey luxury beachfront property, paying little tax, and renting out for big bucks.  It’s interesting that this story  is literally the only narrative we hear about that condemns Proposition 13 and Proposition 58 by real-life example. So they raised $58 Million, in part, on this much repeated tale, and other anecdotal non fact-based evidence, to destroy property tax relief in California.

>> Click Here for Part Two…

In Tune with Tough Times in California – Free Prop 58 Trust Loan Evaluation – Save Over $6,000 in Property Taxes

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Prop 58 Trust Loan

Prop 58 Trust Loan

California is unique when it comes to utilizing trusts and trust loans, along with taking advantage of incomparable property tax relief measures from as Proposition 13, and exceptional property tax breaks from Proposition 58 (i.e., parental property transfer) and Proposition 193 (i.e., property transfer from grandparents). 

So if you reside in California, are inheriting property there, and want to insure you keep your parent’s low Proposition 13 tax base, along with buying out siblings who insist on selling to an outside buyer – you can go to a niche trust lender who will lend directly to an irrevocable trust for you, to accomplish all of the above.

Commercial Loan Corporation in Newport Beach, CA appears to be everyone’s favorite trust lender, as they specialize in taking full advantage of Proposition 58 & 193 property tax benefits, avoiding property tax reassessment,  making sure you transfer parents property taxes correctly, when inheriting a business facility, home and/or land; abruptly inheriting property taxes that must remain low if you wish to maintain your favored lifestyle!  

You certainly want to work with a lender that has a great deal of experience making sure that beneficiaries and property owners nail down the right to keep parents property taxes, with a low Proposition 13 tax base… for all property tax transfer scenarios, including parent to child transfer, what your attorney probably refers to as “parent to child exclusion”… In other words, exclusion from current property tax reassessment rates. And that typically adds up to saving over $6,000 every year in savings on property taxes. 

The process sounds complicated, but it really just boils down to having a lending firm you can rely on to provide enough liquidity to equalize everything between beneficiaries – providing enough cash to buyout siblings who insist on selling your inherited property; while enabling you to keep that property at a low Proposition 13 tax base.  At the end of the day, it should always be a win-win scenario for everyone involved.

Beneficiaries especially like Commercial Loan Corp’s same-day approval & 7-day funding turnaround – with no hidden fees, a simple application form and flexible underwriting. 

By taking advantage of the Proposition 58 and Prop 193 exclusion;  in tandem with a trust loan, if you happen to be a sibling keeping inherited  property – you get to retain that property and at the same time get to keep parents property taxes, which ends up being a low Proposition 13 base, capped at a 2% maximum rate.  You also get to buyout siblings who insist on selling the inherited home and/or land in question; and ultimately walk off with more money than if they had sold their property shares to an outside buyer.  So what frequently begins as sibling conflict, ends with a win-win resolution for all concerned.  

In many cases, a trust loan is necessary, as otherwise the California State Board of Equalization sees this transaction as a sibling buying out another sibling, or child of the parent. Instead of a parent to child transfer, or parent to child exclusion. The exclusion from present day property tax rate reassessment simply calls for a transfer of property from parent to child.

So the trust loan acts as the bridge, so to speak. You can refer to it  any number of different ways, such as “buying my brother’s share of our house” or “buying out my sister’s property shares”… Or you can call it a transfer of property between siblings, a buy out of siblings share of house, buying out siblings’ property shares, or a sibling to sibling property transfer.  It amounts to the same thing. 

Moreover, regardless of the size of  the trust loan, everyone involved is treated like a V.I.P. client, with first-class cordiality.  Which is the main reason we like to refer this firm.  

You can call Commercial Loan Corporation for a free Proposition 58 Trust Loan Evaluation at 877-464-1066 or visit their website at: https://cloanc.com/