A trust loan secured by real estate can be a valuable financial tool for managing a trust-held property in California.
What is a trust loan?
A trust loan secured by real estate is a type of loan provided to a revocable or irrevocable trust, using the trust’s real estate assets as collateral. The trust can use this loan for a variety of purposes.
How do trust loans work?
Trust loans leverage the real estate assets within a trust as security for the loan, so the property must have sufficient equity. The loan is allocated directly to the trust, with the trustees being tasked with its management and the settlement of payments. For a trust loan to be procured, the trust’s documentation must explicitly permit the trustees to employ trust property as loan collateral.
The prerequisite for obtaining a trust loan is that the trust possesses California-based real estate, which can act as collateral for the loan. Trust loans can be extended to revocable (family/living) and irrevocable trusts. HCS Equity is open to securing the loan against almost any category of real estate located within California (residential, commercial, industrial).
Reasons a Trustee Might Need Funds
Trust loans offer a range of applications that can provide considerable relief in managing an estate. Primarily, these loans deliver capital for covering ongoing obligations such as existing debt service, property maintenance, property taxes, and insurance. This liquidity ensures that the property, a significant component of the trust, remains in good condition and fully compliant with financial requirements.
Additionally, these funds can address immediate and sensitive expenses that arise, such as funeral costs and outstanding medical bills. Fund access can alleviate a significant burden for grieving families, allowing them to focus more on emotional healing than financial obligations and ensuring thorough and professional handling of the estate’s legal matters.
Often a trust or estate in probate will borrow funds to facilitate the non pro-rata equalization and distribution of assets between beneficiaries under Proposition 19/58 (the parent-child exclusion from reassessment) per the State Board of Equalization’s guidelines. When executed correctly, this allows for the transfer of real property from a trust or estate in probate to a child without having the property taxes reassessed.
The Benefits of Working with HCS Equity For Your Trust Loan
Opting to work with HCS Equity for your trust loan presents many advantages. Primarily, HCS Equity offers competitive interest rates and terms that can cater to various financial situations. Unlike many lenders, they don’t require a personal guarantee, providing security and ease for borrowers. The payments are interest-only, simplifying repayment and reducing monthly financial stress.
Contact HCS Equity, a trusted California Trust Loan Company
HCS Equity has assisted hundreds of trustees and administrators with specialized financing to solve their short-term capital needs. Obtaining a trust or estate loan at competitive rates and with a quick turnaround is possible with HCS Equity.
Contact HCS Equity today to get started on your trust or estate loan.
