Trust Distribution Loans

Описание: Let’s say that there is a Trust Estate, there is a family home, and there are two beneficiaries – let’s say a brother and sister. For the purposes of this example, let’s say that the brother would like to keep the family home. When it comes time for the distributions, if the family home is worth $100,000, and if it’s an equal distribution, that would be an equity position of $50,000. If the brother wanted to keep the property, he would need to pay his sister $50,000.

So an example of a trust distribution loan would be the brother coming to us and requesting a $50,000 loan against the property to pay off the sister so that she gets her distribution. Then the brother gets his distribution – the house, and it is all achieved through loan financing.

In this example, the brother would be taking out a personal loan secured by real property, which means that it would go through personal underwriting and a full credit check. In this case, it would not be a business loan because it’s an estate distribution. When it’s a distribution, the title will go into the brother’s name, but before that can happen, the brother has to make sure that his sister gets her share of the equity.



Trust distribution loans are expensive. There are points on such loans, there are interest payments, but that’s the price someone must pay if they want to keep a piece of inherited real estate but they are not the sole beneficiary.

If you want to talk about a trust distribution loan, call me. I’m Dan Collins at Integrity Estate Lending.