Loans to Estates in Probate

Managing probate estates can be problematic for several reasons, many of which are caused by lack of liquidity in the estate. Our private loans help solve myriad estate issues and provide flexibility for the administrator in order to carry out the deceased person’s wishes, assist each beneficiary in receiving their share of the inheritance without being forced to part with valuable family property, and allow heirs to maximize the value of their inheritance.

  • Many probate estates have limited liquidity, meaning that all, or a majority of, the probate estate consists of non-cash assets. Without sufficient liquidity to probate the estate, valuable estate assets might have to be sold, simply to ensure that the probate process is carried out properly and fairly. Sale of the estate assets means that heirs will not be able to inherit property which may have significant monetary and sentimental value. Also, selling an asset rather than allowing heirs to inherit the asset may cause valuable income tax and property tax benefits to be wasted.
  • Estates also need sufficient liquidity to ensure that the probate estate makes its way through the court system. Since no disbursement of funds or assets may be made without the court’s order, an administrator needs access to funds in order to pay monthly bills, pay for funeral and medical expenses for the deceased, and pay fees associated with the probate court proceedings—such as filing fees, publication fees, and probate referee fees, to name a few.
  • We assist administrators, attorneys, fiduciaries and court appointed trustees with capital needs such as property maintenance, eviction of tenants, debt service, medical expenses, administrative expenses, attorney’s fees, taxes, judgments, and to cover ongoing carrying costs.

Additional benefits include:

  • Competitive rates and terms
  • No personal guarantee required
  • Interest only payments
  • No prepay penalties
  • No minimum months of interest
  • Funds are typically available within 7-10 business days
Step 1
Determine who will retain property

Oftentimes one or more beneficiary wishes to retain the property and its tax base

Step 2
Determine loan amount required to equalize the trust

The property value, other assets/cash in the trust, and the number of beneficiaries are used to determine the liquidity needs of the trust

Step 3
HCS Equity provides a loan to the trust or an estate loan

HCS Equity provides private capital directly to the trust to create liquidity needed for equalization, a necessary step to avoid reassessment under Proposition 58.

Step 4
Equalization and distribution

Cash or property are distributed as mutually agreed upon by the beneficiaries

Step 5
Change of ownership

Change of ownership and exclusion from reassessment are filed

Step 6
Trust loan is repaid

The beneficiary retaining the property either repays the trust loan with their own funds or secures conventional financing to repay the trust loan. That’s why a free consultation is often the best option if you’re looking for a loan from trust to beneficiary.

*This is for illustrative purposes only; HCS Equity does not provide legal advice or services

*This is for illustrative purposes only, HCS Equity does not provide legal advice or services

Looking to get started?

Call us today if your attorney has advised you to seek out a 3rd party loan to preserve your parent’s or grandparent’s Proposition 13 tax base. We are a direct lender, which allows us to make quick approval decisions, and provide funding in as little as 7-10 days.

Schedule a Call Today