In the complex tapestry of estate planning and inheritance, transferring a property from one generation to the next can be a challenge. The trust or estate are often faced with the daunting task of not only managing assets, settling estates, and navigating legal procedures, but also securing the capital needed to create the liquidity for equalization.

This is where a private trust loan on inherited property may be useful. This financial tool is important in helping trustees, administrators, fiduciaries, and other borrowers navigate the intricate process of trust administration and probate while at the same time preserving property taxes under California’s Proposition 19/58.

In this blog post, we will explore how trust loans can be an invaluable tool during the property transition and decision-making process.

What to do When You Want to Keep an Inherited Property

When heirs find themselves fortunate enough to inherit a family property, they may be faced with an important decision of whether to keep or sell the property. In case they’ve decided on keeping the inherited property, but other beneficiaries do not want to, the retaining beneficiary may have to cash out their share. Oftentimes, the trust or estate will not have the necessary funds to proceed with the distribution of assets between beneficiaries.

Fortunately, there is a viable solution. A private trust loan allows the retaining beneficiary to buy out the beneficiaries who are looking to sell their share of the property. Considering the proper steps are taken, they can qualify for property tax savings available under California’s Proposition 19/58 (parent-to-child or grandparent-to-grandchild property tax exclusion).

How to Secure Financing When Inheriting A Property

Traditional banks and credit unions are hesitant to approve a loan on an inherited property because, at this point, the property title is still in the name of the trust or estate. Under such complex circumstances, the need to obtain a trust loan from private lenders in order to maintain property ownership (without being forced into a sale) and potentially save thousands of dollars in property taxes is the alternative.

To qualify for this funding option, borrowers don’t need to be on the property title. Private lenders such as HCS Equity consider only the available property equity as collateral to determine the loan amount.

Private trust loans from HCS Equity are borrowed directly to the trust or estate in probate and play an important role in facilitating the non pro-rata equalization and distribution of assets under Proposition 19/58 in order to adhere to California’s Board of Equalization’s rules. With the trust loan proceeds, the estate assets are then distributed to the retaining heir(s), while the cash is used to compensate the other beneficiary (s) selling their share of the property.

HCS Equity trust loans offer a range of benefits that can make the process of transferring an inherited property smoother and more financially sound. We’re known for our quick approval process, allowing for prompt access to funds. We provide very competitive interest rates, interest-only payments and greater flexibility in loan terms tailored to specific financial situations.

Typically, we don’t require a personal guarantee, nor do we impose prepayment penalties, thus providing an extra layer of financial security and peace of mind to borrowers.

The Final Words

It can be very difficult to deal with all the aspects of settling an inherited property while trying to come to terms with the loss of a beloved parent. On top of that, there might be multiple heirs involved in the will who, unlike you, don’t want to keep the family home.

In this case, the beneficiary (s) who wishes to retain ownership and divide interest in the inherited property may have to secure funding from HCS Equity, a trusted and experienced private money lender in California.

Contact HCS Equity today to obtain an inherited property loan and preserve your property as well as your inheritance tax advantages.


Recent Posts