PART THREE: Loans to Irrevocable Trusts and Equalizing a Trust Distribution

Lending to an Irrevocable Trusts

Improving Family Security With Low Property Taxes

When beneficiaries in California are inheriting real property and looking to transfer parents property taxes, it’s typically a house possibly with some land from parents… and yet when they are involved in emotional and/or financial conflict with co-beneficiaries, generally siblings – revolving around the issue of retaining an inherited property, or selling it to an outside buyer, one or more beneficiaries who prefer to keep the property in question frequently will attempt to buyout the beneficiaries looking to sell their shares in an inherited property.

One increasingly popular method of being able to transfer parents property taxes, while accomplishing an inherited property buyout, involves the hiring and collaboration of a trust lender that is experienced in loans to irrevocable trusts, as well as the expert use of California Proposition 13 and the Proposition 58 property transfer tax break measure. As is the case in this particular account involving the Smith family in Southern California, and the Commercial Loan Corporation.

If qualified, and over 55 years of age, many property owners involved in this exact process can also apply a significantly lower tax rate to a secondary dwelling, as long as they own the initial inherited property for 2 years or more.

Rules, regs and steps regarding the trust loan process – in conjunction with California Proposition 58:

1. Determination of who will keep the property
2. Determination of the loan amount
3. Loan to trust/estate is implemented
4. Trust lender equalizes cash distribution to beneficiary or beneficiaries
5. Property is transferred into the acquiring beneficiaries name
6. Parent child exclusion is filed, avoiding property tax reassessment
7. Five to seven day funding turnaround
8. The trust loan is repaid, concluding a win-win family arrangement
9. No Up-Front Costs
10. No Hidden Fees

An Alternative Financial Solution for Beneficiaries

One member of the Smith family found the Commercial Loan Corp firm on Google.com, while the other three family members were referred to the trust lender by their attorney. Interestingly enough, all members of the Smith family ended up finding and calling the trust lender at their Newport Beach office separately on the exact same day. They all were extremely motivated to get this transaction closed as rapidly as possible.

The personal issue that appeared to motivate the call to the trust lender, referred by the Smith family’s attorney, was concern that all four Smiths had for tax savings derived from applying a trust loan; involving their inherited property valued at $900,000 – in conjunction with tax breaks made possible by California Proposition 58. Only one of the siblings was interested in selling their inherited property, as it happens. The amount of the trust loan applied was for $675,000. Estimated Annual Tax Savings for the Smith family was calculated to be $6,064.

Fortunately, the Smith family got along well, and all agreed their main interest was to retain the low tax base their parents had paid yearly, thanks to California tax break Proposition 13, which makes it possible for folks to keep parents property taxes, transfer parents property taxes at the low rate they used to pay, and basically enjoy the benefit of inheriting property taxes that are as low as they should be.

The Smiths wanted to avoid property tax reassessment… and to take advantage of Proposition 13 and Proposition 58 protected property tax transfer and parent to child transfer; commonly known as parent to child exclusion (from present day property tax reassessment).

The three siblings looking to keep their parents’ home all agreed they should buy out the one sibling looking to sell as quickly as possible. Buying out a siblings share of house, or buying out a sibling’s property shares is also referred to as sibling to sibling property transfer, which is where an estate loan working with Proposition 58 comes in to play. Beneficiary buyout of a sibling’s property shares was made possible in this scenario by the Smith’s $675,000 trust loan.

Bottom line outcome is that the cost of actually selling the $900,000 property to an outside buyer would have been $54,000. Not selling the property and using the loan to a trust to buyout the one sibling, and process entire transaction, cost the family only $20,764, This meant an extra $33,236 in cash to the trust in savings for the Smith family.

PART TWO: 100% Secure Trust Loan Distribution Equalizing Solution

Lending to Irrevocable Trusts in California

Improving Your Family’s Security With Low Property Taxes

When families in California are going through an estate and/or probate scenario, are inheriting property, and are unfortunately  experiencing conflicts between beneficiaries who wish to retain their inherited property, and siblings who want to sell their property shares – frequently, a loan to an irrevocable trust, and a trust lender you can depend on to be reliable and affordable is the answer.

Many property owners can also be qualified to apply and keep a significantly lower tax rate to a secondary dwelling as well, if over 55 and retaining the initial inherited property for 2 years or longer.

Steps, rules & regs for the trust loan process – in conjunction with California Proposition 58 – are typically as follows:

1. Determination of who will keep the property
2. Determination of the loan amount
3. Loan to trust/estate is implemented
4. Trust lender equalizes cash distribution to beneficiary or beneficiaries
5. Property is transferred into the acquiring beneficiaries name
6. Parent child exclusion is filed, avoiding property tax reassessment
7. Five to seven day funding turnaround
8. The trust loan is repaid, concluding a win-win family arrangement
9. No Up-Front Costs
10. No Hidden Fees

An Alternative Financial Solution for Beneficiaries:

The Miller family in Southern California urgently needed a $320,000  trust loan to equalize distribution involving an inherited house valued at $615,000. They were very concerned about tax savings as well as keeping the home they have been living in for the past 10 years. Their family attorney referred the Millers, totaling four siblings, to the Newport Beach trust lender Commercial Loan Corporation.

Their inherited home was valued at $615,000, and the two beneficiaries who were interested in selling the property to an outside buyer were to be bought out to the tune of $205,000 each with the cash from a trust loan, instead of selling to a buyer, with the other two siblings losing the beloved home the family was attached to for sentimental reasons.

If the property was to be sold to a third party buyer and their property taxes reassessed normally, their estimated property taxes at current value (1.1%) would have been $6,765. If the one beneficiary was bought out by the trust loan, allowing the other three siblings to retain the home, estimated taxes were to be $4,164. An estimated property tax savings of $2,601 per year. Looking at this realistically, their income before income tax would be somewhat higher than that figure, to come up with $4,164 in cash every year to pay off those property taxes. It would have been a significant sum for a normal middle class family.

The situation was apparently very difficult in terms of getting everyone on the same page, agreeing to all the numbers. Sibling squabbling had gotten heated over the months they had spent dealing with house issues, and the in-fighting became so
intense that both beneficiaries looking to sell out actually hired separate attorneys to represent their interests. It got to the point where the family spent more time arguing on a daily basis, than doing anything else.

According to an account rep who is particularly experienced with loans to irrevocable trusts, Miss Alonso, the family arguments began to dominate all of their time together. It seemed impossible for them to agree on anything. There was also conflict between the two beneficiaries looking to keep the property. Both agreed to the process of transferring property and buying out beneficiary shares, however disagreed on what values to use. Each thought the other was attempting to trick or fool the other.

It began to look unworkable. Some of the siblings even threatened to take the matter to court of there could be no agreement on the numbers involved.

Yet, in the final analysis, the one issue that prompted the call to a trust lender that furnishes loans to irrevocable trusts, Commercial Loan Corp, and bound a thread between them all was their genuine desire to continue living in the home they had resided in prior to their parents’ passing away. In the end, this particular desire to stay on in the house was even more important to this family than the numbers and interest in saving on property taxes!

It took some time to finally normalize the situation and get all these family members on board with numbers they could all agree upon. However, the account rep, Miss Alonso, was able to eventually get everyone to the table, and to agree on the final numbers.

Everyone ended up happy with the deal, and with their tax savings looking ahead towards their projected property tax realities. Bottom line, it would have cost $36,900 to go through with a sale of the property in question. And only cost $11,919 if the family decided to simply retain the property as is.

Additionally, the trust received an extra $24, 981 in cash by keeping the property, and agreeing not to sell. All the way around, their decision to enlist the help of a firm experienced with loans to irrevocable trusts, and to keep the home of their beloved parents for sentimental reasons, ended up, ironically, being a far more sensible decision for the entire family group financially.

To reach Commercial Loan Corporation regarding assistance with a loan to an irrevocable trust, call 877-464-1066.

PART TWO: Why is California the Only State Where Trust Loans Can Equal Low Property Taxes for Life?

CALIFORNIA TRUST LOANS

Newbies in the trust loan and Proposition 58 property transfer and inheritance process learn the rules & regulations from their trust lender of choice – more often than not choosing the Commercial Loan Corp in Newport Beach, statistics tell us, for whatever reason…  Avoiding property tax reassessment on an inherited property, with the CA Proposition 58 & 13 property tax transfer – subsequently  inheriting parents property taxes – establishing significant tax relief for residential and/or business real estate.

Folks that are new to this process also learn very quickly, when they start wondering what it might cost of they used their own cash (if they actually have that much in the bank), that there is more to using a trust loan than at first appears, with respect to tax savings, but also saving of process costs and fees as well. That is often the most interesting part…

Those beneficiaries looking for a loophole, where they can possibly avoid the cost of a trust loan – find out rather quickly, and abruptly, that it will cost them nearly twice as much using their own money – and that a trust loan used in this way is literally the only way to provide themselves with enough cash to enable each heir or beneficiary the ability to receive an equal portion of the assets of a trust or estate inheritance.

They all find out that in fact this is not only the best way to go – it’s the only way to go! They all discover that this trust loan process  allows siblings to keep a family home without all the stress and cost of spending their own funds, without an expensive real estate law firm or pricey 6% realtor, they find out they can now transfer at a much lower cost – and with much lower property taxes.

And, at the same, beneficiaries discover this approach allows beneficiaries looking to sell out to get the cash they wanted from a sale, yet without having to go through all that stress and trouble and expense to sell their inherited property to a typically greedy buyer looking to negotiate them down to a much lower selling price. The obligatory price negotiation.  So you wind up spending more – and profiting less.

All around, this is a much more affordable way to go. Well, look at the numbers – you have a realtor you need to pay 6% to, right? You have a real estate attorney you need to pay $500 per hour to, correct? Plus, other incidental fees and outlays. And in the end, selling to a buyer, you wind up with far less cash in your pocket than you would going down the trust loan / Proposition 58 avenue. 

People new to trusts being used in this fashion, understand right away that their ability to keep parents property taxes and to transfer parents property taxes means they will be inheriting property taxes as a basic Proposition 13 property tax transfer, parent to child transfer,  or parent to child exclusion, that will end up saving them tens of thousands of dollars, if not hundreds of thousands of dollars, in the long run. 

Trust loans, working alongside CA Proposition 58 makes it possible for beneficiaries to sell shares of inherited property, called a beneficiary buyout of sibling property shares, while avoiding property tax reassessment.  generally buying out a sibling’s share of an inherited house – or, as real estate lawyer refer to it, “the transfer of property between siblings” or “sibling to sibling property transfer” – by lending money to an irrevocable trust – typically from an irrevocable trust loan lender, commonly called trust lenders, specializing in trust loans.          

In fact, on average, beneficiaries typically save more than $6,200 annually in property taxes – year after year, basically forever – simply by taking advantage of the tax break afforded by Proposition 58, and preserving parents low Proposition 13 property tax base – a basic CA Proposition 58 & 13 property tax transfer. Never forgetting that the trick is to choose the right trust lender… and the right real estate or estate attorney to guide you through the process.

The convenient thing about a trust lender like Commercial Loan Corp is that with a company like them, you don’t need to depend the extra money on a lawyer, as you get all those extra services in a package, basically at no extra cost.

So if you’re in that position right now, and need to make some wise decisions, as to sell or not to sell, as Shakespeare might have put it – start educating yourself with dense but well organized official gov. info, and Click Here: California State Board of Equalization Website.  You can also Click Here: for a top notch niche Proposition 58 info site Or  for  well vetted, easy to understand and highly specialized information on  trust loans, Proposition 13 & Prop 58 ~ Click Here  However, there are only a few first-class Websites like this. You might also look further  here, on this site, with one of the many blog articles or interviews that address what you want to look into, and apply it to your own scenario,  starting with: Transferring Property Taxes in California  (Click Here)

PART ONE: Trust Loan Distribution and Equalizing Solution

Trust Loan Distribution and Equalization

Improving Your Family’s Yearly Financial Security With Lower Property Taxes…

When families inheriting property are experiencing conflicts between beneficiaries who wish to retain their inherited property and siblings who want to sell their property shares – a loan to a irrevocable trust is frequently the answer.

Many property owners can also be qualified to apply and keep a significantly lower tax rate on a secondary dwelling as well; if they are 55+ and retaining the initial inherited property for 2 years or longer.

Steps, rules & regs for the trust loan process – in conjunction with California Proposition 58 – are typically as follows:

1. Determination of who will keep the property
2. Determination of the loan amount
3. Loan to trust/estate is implemented
4. Trust lender equalizes cash distribution to beneficiary or beneficiaries
5. Property is transferred into the acquiring beneficiaries name
6. Parent child exclusion is filed, avoiding property tax reassessment
7. Five to seven day funding turnaround
8. The trust loan is repaid, concluding a win-win family arrangement
9. No Up-Front Costs
10. No Hidden Fees

An Alternative Financial Solution for Beneficiaries:

As an example of this alternative financial solution for beneficiaries, we’ll take a look at the Anderson family in Newport Beach, CA; who found themselves in exactly this type of situation recently.  Siblings Don and Marie Anderson decided to seek help from Proposition 58, plus a trust loan, from a well known, nearby trust lender; whose motto impressed them – Commercial Loan Corporation, whose motto states: “Regardless of trust loan amount – all clients receive VIP treatment, and become a permanent member of the Commercial Loan Corp family!”

The Anderson‘s decided they would allow Marie to keep the inherited home from their late mom, as long as her brother Don could receive enough cash with a trust loan from a reliable trust lender, for his shares in the inherited property… making  the transfer of property between siblings possible.  Therefore, selling to a third party buyer would not be necessary – a process otherwise known as beneficiary buyouts of sibling property shares. At the same time maintaining property tax transfer from parents or, in other words, inheriting property taxes that simply transfer parents property taxes that retain the low property tax base their parents paid… due mainly to tax benefits made possible by California Proposition 13, parent to child transfer or, as attorneys call it, parent to child exclusion

A secondary conflict revolved around the value of the house, which was in dispute. A figure was finally agreed to of $1,400,000. This end result was finally resolved by both siblings agreeing to a value based on taking the middle number of the two property value projections. The Anderson’s trust loan was $958,000; and property taxes under Commercial Loan Corp’s trust loan management were assessed at only $1,687.50 – whereas estimated property tax at Current Value (1.1%) was $15,400. Estimated Annual Tax Savings was $6,857.

Both siblings were motivated to keep the low (2% maximum) property tax base that was paid in the past by their parents, thanks to property tax relief provided by the 1978 California Proposition 13 property tax measure.  Both Don and Marie were receptive, however each had their own attorneys, and Don, who was looking to sell, would only talk to the trust lender through his attorney, who was quite experienced with beneficiary buyouts of sibling property shares.  Both siblings fortunately agreed to the trust loan process in general, with Commercial Loan Corp., but disagreed on precisely what assessed value to apply to the property.

At one point, Don insisted he would sell to an outside buyer if his sister would not agree to the assessed value of the property that he favored.  It was finally decided that a Cost Benefit Analysis was required to insure it would be worthwhile to even keep the property. Subsequently, the positive outcome of that analysis resulted in a mutual agreement that it would be worthwhile to keep the home.

Additionally, there was property tax savings of $6,857, while Marie was able to keep this wonderful family property without any issues; with all her cherished family home memories perfectly intact.

Bottom line, it would have cost $84,000 in closing fees, attorney  charges, and so forth – to sell this inherited property outright. Cost to keep the property, with a trust loan covering all costs and fees, was only $23,255. Moreover, the trust received an additional $60,745 more, than if they were to sell the property to an outside buyer.

Obviously, this financial choice the Anderson’s made, with respect to choosing a trust lender and opting for a trust loan plus help from Proposition 58, turned out to be the right decision for this family.

 

Notice: JavaScript is required for this content.