Borrowing From the Family Trust to Purchase a Home

• Tuesday, February 11, 2014
• Category: Wills, Trusts and Estate Litigation

Because of the high interest rates, children with access to a trust are more likely to tap into trust funds to buy a house. This alternative can buy a home outright, or prevent people from taking out large mortgages. Borrowing from a family trust is easier than applying for a mortgage. Two specific trusts might be good options. The first is a Qualified Personal Residence Trust, and the other is an Intentionally Defective Grantor Trust. Regardless of the type of trust there are some important things a financial planner should consider. They are listed below:

Documentation that indicates how much is borrowed from the trust;

Family Feuds because of multiple beneficiaries; and,

Tax implications

Reference: Gerry W. Beyer, Wills, Trusts & Estate Prop. Blog, (October 11, 2013)

Filed Under: Estate Planning; Trusts

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