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: Are Trusts, Trust Loans and California Property Tax Breaks Strictly for the Rich?

Loans to Trusts

CA Proposition 58, Loans to Trusts and Property Tax Breaks

Beneficiaries in every state in America should have property tax measures like California does, and be able to use trust loans & Proposition 58 to equalize property shares sold by co-beneficiaries;  and by all rights be able to transfer parents property taxes, when inheriting property taxes in California, to themselves at the low rate their respective parents used to pay, whenever inheriting property taxes in California on gifted or inherited property — either residential or business real estate.  In all states, and especially in high tax states like New York,  Texas, Massachusetts and Pennsylvania. 

If people want to march on something, egregious property tax rates in most of this country would be worth marching for.  Trust loans & Proposition 58 in California, and by now institutionalized California tax breaks from Proposition 13, saves beneficiaries a great deal of money; avoiding property tax reassessment on the transfer costs,  plus the low base rate from parents, from CA Proposition 13.

Lawmakers in every state can, and should, pass property tax relief bills that make sense, like CA Proposition 58 and 193, enabling low raxes on property tax transfer from parents and grandparents when inheriting a home, for example… as well as maintaining a low Proposition 13 tax base from parents, forever.  California trust loans are used to resolve inherited property conflicts, between beneficiaries, working alongside CA Proposition 58 – enabling co-beneficiaries to sell shares of inherited property, a beneficiary buyout of sibling property shares… while avoiding property tax reassessment. Generally buying out a sibling’s share of an inherited house – as real estate lawyers call it, “transfer of property between siblings” or “sibling to sibling property transfer” – lending money to an irrevocable trust – from a lender specializing in trust loans and CA Proposition 58, from A to Z.

And likewise, inheriting property taxes on that home in accordance with parent to child transfer or parent to child exclusion, from present day property tax rates, avoiding property tax reassessment simply to keep property taxes low, giving beneficiaries the ability to utilize trusts for personal estate use and benefit – for all Americans; not just for the VIPs and the wealthy.  California is the model every American state should mirror when it comes to property tax relief.

If this were in fact the case, all Americans, in every state, would be able to enjoy a bit more of a sense of genuine financial comfort, with a greater sense of security, that most people associate with their home…  Placing this sense of “home security” under threat year after year, by jarring home owners and business property owners’ feeling of security, where their home is concerned, with unexpected, seemingly arbitrary property tax hikes on what is most Middle Class people feel is their most valuable asset, and the very foundation of what little security  Middle Class Americans have these days. 

Middle Class Americans as a rule do not have a seven-figure bank account or eight-figure net-worth “portfolio” that helps them sleep better at night!  In fact, a recent 2019-20 financial report tells us that most Middle Class Americans have trouble coming up with $400 in cash to deal with a personal emergency!  Bearing in mind that unreasonable taxes on their home – what they consider their base asset for personal security, along with their health and income – might intrude on their security at any time – unless controlled by iron clad property tax relief, such as the 1978 CA Proposition 13 tax break, and the 1986 CA Proposition 58 property transfer tax measure

This automatically made  unpredictable, arbitrary tax hikes, imposed by politicians with questionable motives and goals, impossible to impose on all Californians.  Property tax relief is not just a dream, as many critics in other states might suggest.  California accomplished it. Why not every other state as well?

If you are seriously considering a loan to a trust in California, to take advantage of California Proposition 58,  our Senior Editors would advise you, without hesitation, to look into Commercial Loan Corp at 1-877-464-1066 in Newport Beach, CA. This firm is one of the only California lenders that not only specializes in assisting beneficiaries with Proposition 58 – unlike conventional lenders, they are also able to lend directly to an Irrevocable Trust with loans of any size and, unlike other lenders, surprisingly, they treat all their clients like V.I.P accounts –  regardless of the size of their loan, or property value.

 

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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.

 

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PART ONE: Are Trusts, Trust Loans and California Property Tax Breaks Strictly for the Rich?

California Loans to TCA rusts

CA Proposition 58, Loans to Trusts and Property Tax Breaks

Gifting property to adult children is a wonderful thing to do, setting aside any potential tax breaks for a moment… although property tax relief does obviously make it all the more wonderful for parents and offspring. And, thankfully, to take advantage of these benefits in all 58 California counties, you don’t always need to be wealthy, with $1,200 per hour tax attorneys standing by to manage your ability to avoid property tax reassessment, or to learn how to use a trust to save on taxes or to buy out siblings’ shares in your inherited real estate… with a trust loan.

Naturally, it doesn’t hurt to live in a state like California, where you get to save tens of thousands of dollars over the years in unique property tax breaks, tax breaks that compared to other states…. or compared to California the way it was pre-1978, before Proposition 13 came about, and later in 1986 when Proposition 58 became a reality, when Californians became able to keep parents property taxes upon inheriting property from parents, with the ability to transfer parents property taxes, inheriting property taxes that are as low as they can possibly get on a property tax transfer, with a simple parent to child transfer, or, as lawyers call it, a “parent to child exclusion”.

Another related point that seasoned California trust lenders, real estate attorneys, and realtors know quite well, is the fact that large loans to irrevocable trusts are not simply for the extremely well off. These are trust loans in California for wealthy and middle class beneficiaries alike… loans to irrevocable trusts, to buy out siblings’ share of inherited property, with sibling to sibling property transfer when selling shares of inherited property. 

This provides beneficiaries who insist on selling inherited property with secure, fair transfer of property between siblings; with enough cash to equal, in fact generally to surpass, their share in that property; this process allows the beneficiary or beneficiaries who do not wish to sell out, the absolute  right to retain the inherited property in question – plus receive a low yearly property tax rate at levels unimaginable to most property owners and beneficiaries in other states.

Quite simply, all business and residential property owners in America, nationwide, should pay no more than the 2% maximum property tax rate property owners pay ever year in California in property tax rates, plus low rates on property transfer, thanks to California Proposition 13 and Proposition 58, generally in concert with a trust loan that pays for expensive closing and legal costs.