Loans to Trusts

Описание: Trustees are fortunate in that in a trust estate you can make partial distributions at any time. What we often see with many trust estates, however, is that oftentimes such estates don’t have much cash. It may be because the decedent was sick before they died and were using all their cash for caring for themselves, or perhaps beneficiaries had gone in and taken cash. There are lots of reasons why an estate may be asset rich but cash poor.

I see this happen all the time.

I employ using loans to trusts in my consulting business for trust litigation attorneys all the time. These are great loan programs in cases where you have real property with sufficient equity to securitize these loans. They can typically be had for approximately 3 points and the interest rate is going to range between 10% to 12% per annum.

If you need to fund your trust to conduct the business, and make the distributions, and reposition assets in a responsible fashion to maximize value, these can be excellent loans.

The other benefit of loans to trusts is that if they are for business purposes, then they do not have to be guaranteed by a trustee personally. It is simply the trust that would take out the loan, and it would be the trust that would be responsible for re-payment. Limiting or mitigating your personal liability as a trustee is a critical consideration when you seek funding for trust estates.

If you have questions about loans to trusts, call me directly. I’m Dan Collins at Integrity Estate Lending.