4 Reasons Beneficiaries Should Borrow Against an Irrevocable Trust

When a loved one passes away and leaves money or assets to others, a process must occur for those items to officially transfer ownership. Unfortunately, trust obligations and personal needs do not wait.
An irrevocable trust loan on property in California can help bypass the waiting period, allowing beneficiaries to make several moves quickly. ‌HCS Equity has been providing specialized funding for trusts for more than 15 years.

As a direct lender, our approval and funding process is conducted promptly. We require no personal guarantees, no prepayment penalties, competitive rates, and interest-only payment.
Here are four reasons why you, as a beneficiary, should contact HCS Equity to borrow against an irrevocable trust in California.

1. You’ll Be Able to Pay Trust Expenses

When the original trustee passes away, they often still owe expenses. These can include everything from legal fees, medical expenses, mortgage payments, and more. There might also be obligations to other heirs that need to be processed quickly.

Unfortunately, there may not yet be enough liquidity in the estate to make these payments. Getting a trust loan from HCS Equity can provide the capital needed almost immediately, helping you fulfill obligations as quickly as possible.

2. You’ll Be Able to Buy Out Other Heirs

‌Sometimes, when a home is involved, heirs have varying opinions on what should be done. For example, one heir may wish to keep and even live in the property while the others want to sell it.

When this happens, it can cause a lot of contention and stress, but there’s a solution. The trust can get a loan to facilitate one beneficiary keeping the home, and the others taking their share in cash.

The money will go into the trust’s bank account and get dispersed to each heir according to their interest in the home. This can be a great way to keep the peace and give each heir what they want.

3. You Can Avoid Property Tax Reassessments

‌If a property has been in the family for several years or decades, the annual increase in property taxes is low. However, when it changes hands, a reassessment can cause a massive increase in taxes. Fortunately, some laws prevent this from happening when the property gets passed down from a parent.

When there are several beneficiaries and one of them wishes to keep that property, he or she will need to buy out the other heirs. Even if the heir desiring to keep the property has the money to make this move, this isn’t a good idea.

When personal funds are used, it’s considered a sibling-to-sibling transfer and is not protected by tax laws. That’s why it’s a better idea to borrow against the trust so that everything is handled directly through the estate. You can learn more about these laws and the loan benefits that help avoid reassessments by contacting our team at HCS Equity.

4. You Can Prepare the Home for Sale or Rent

In some cases, all of the heirs agree that selling the home or turning it into a rental property is the best idea. At these times, the house typically needs some repairs, updates, and other work to fetch the best price or make it livable.

This is not always an expensive process, but sometimes it can add up to far more than the heirs can afford to pay out of pocket. Borrowing against an irrevocable trust in California means that the beneficiaries can get the work done without putting too much financial strain on themselves.

Getting an Irrevocable Trust California Loan from a Lender

‌Getting an irrevocable trust loan in California is a big step, and it’s best to do under the advice of your attorney.

If you determine that working with a lender is the right move for you, here are six basic steps to obtaining an HCS Equity loan against your irrevocable trust property in California:

  1. Decide which heir will keep the property.

  2. ‌Decide on the amount of the loan you need.

  3. Apply for an HCS Equity loan. Funds typically get disbursed in 10 days or less.

  4. Wait for the equalization and distribution process to complete.

  5. File for change of ownership and exclusion from reassessment.

  6. Either repay the loan through personal funds or apply for conventional financing.

Please note that we are not a legal team. We advise seeking legal counsel before making any moves.

As a trusted irrevocable trust lender in California, HCS Equity provides loans to trusts to prevent hefty property tax hikes on properties in irrevocable trusts. Using our own capital, we offer competitive rates, interest-only payments, and no prepay penalties on our loans. For any questions about the loan process, contact us at (877)-427-9820. Our loan specialists will work with you to find the best solution for your unique needs.


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