Direct lending to California trusts when banks say the borrower structure is too complicated.
Most banks will not lend to an irrevocable trust. The trust cannot show W-2 income, the trustee is not personally the borrower, and the structure does not fit conventional underwriting. Yet trusts hold an enormous share of California real estate, and trustees regularly need liquidity.
A trust loan is a loan made directly to the trust, signed by the trustee, and secured by trust-owned real estate. Common scenarios include equalizing distributions when one beneficiary keeps a property and others take cash, paying trust administration expenses, and funding repairs before a trust property is sold.
One frequent use in California involves parent-child property tax planning. Depending on the circumstances, Proposition 19 treatment may turn on how a trust distribution is structured, and in some cases a child keeping a parent's home needs other beneficiaries compensated in cash the trust does not hold. A third-party trust loan can supply that cash so your attorney can structure the distribution as your situation requires. Whether any tax benefit applies depends entirely on your facts and your counsel's analysis. This is general information, not legal or tax advice.
We lend to irrevocable trusts, family trusts, and special needs trusts throughout California, working alongside trustees, fiduciaries, and their counsel. Because we are a direct lender underwriting the real estate itself, approvals are fast and the trust's structure is a routine part of our process, not a disqualifier.
Not easily from a bank, but yes from a private lender. We lend directly to irrevocable trusts secured by trust-owned real estate, with the trustee signing on behalf of the trust.
In some situations, an attorney structuring a trust distribution for Prop 19 purposes needs the trust to pay departing beneficiaries in cash rather than dividing the property. A trust loan can provide that cash. Whether this affects your property tax treatment depends on your specific facts; only your attorney or CPA can advise on that. This is general information, not legal or tax advice.
The trustee applies on behalf of the trust and signs the loan documents. We verify the trustee's authority in the trust instrument and work with the trust's attorney throughout.
Trust loans are typically structured so the trust and its real estate secure the loan. Recourse terms vary by scenario and are spelled out in the term sheet before you commit.
The trust instrument (or certification of trust), the trustee's identification, and property information. If a court or co-trustee consent is required by the trust, we coordinate that with your counsel.
Fidelity Funding Corp · Direct California private money lender since 2006
450 N Brand Blvd, 6th Floor · Glendale, CA 91203 · Mon-Fri 8AM-6PM PT