How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Barrister Your Own Question

Barrister
Barrister, Attorney
Category: Estate Law
Satisfied Customers: 23546
Experience:  14 yrs estate law, real estate. Wills/Trusts/Probate
19958803
Type Your Estate Law Question Here...
Barrister is online now
A new question is answered every 9 seconds

I am the executor of my fathers trust, which became irrevocable

Resolved Question:

I am the executor of my father's trust, which became irrevocable upon his death. We linve in California. My mother had already passed and left no trust. We placed the house in the trust, and as with much else, when sold the profits are to be split amongst the three siblings. The trust gives me the ability to encumber debts to the trust, etc. to maintain the estate. Question: We need to get a home equity loan to fix up the house before it goes on the market. It is very dated, and some things just HAVE to be done to get sold at anything below rock bottom price. So, my question is: Can I get a home equity loan on the house? We approached one bank, and they said we would have to remove the home from the trust, and get a loan in the name of all three siblings. This doesn't make sense to me, and given family politics, not a good idea... Any advise would be helpful. Thank you
Submitted: 1 year ago.
Category: Estate Law
Expert:  Barrister replied 1 year ago.
Hello and thank you for using JA! My goal is to provide you with excellent service and help with your legal problem.
.
Can I get a home equity loan on the house?
.
I actually ran into the similar situation with a client where their house was in a revocable trust and they wanted to refinance the mortgage. The bank is hesitant to agree to loan money to a trust simply because it likely has no income to support a loan payment. Since the trust owns the house, it would be the trust that would be applying for the loan through you as the trustee. It would essentially be the same thing as if an individual applied for a loan without a job or any source of income.
.
With that said, the way the client got around it was for the trustee to sign the loan applicatoin and then the grantor (who was still living) signed the loan application as a cosigner. But since it is irrevocable now, the bank may require all beneficiaries to sign off as cosigners on the loan.
.
And yes, some banks are a little more experienced in dealing with trusts and financial issues they face simply through working with them. Smaller banks are less likely to have dealt with trusts before and give you the "deer in headlights look" when you tell them that the trust needs to take out a loan.
.

.

.

Thanks.

Barrister

.

.

If you need further help, just reply to me via the “REPLY” button and I will be happy to continue.

.

I cannot enter into an attorney client relationship, this is a public forum, and all posts are available for public viewing. There is no duty of confidentiality that attaches to any posts. The information provided is not a substitute for a local attorney’s legal advice.


.
In this situation, the bank would likely agree to make the loan if you as trustee signed personally for the loan so they have someone other than just the trust on the hook if the loan isn't repaid.
.
Customer: replied 1 year ago.

So, that makes sense. The trust doesn't have income, so it "looks" like you're loaning to someone who doesn't have money.


 


So if I am reading this correctly, probably going to a larger bank with someone who really knows this stuff is the ticket. And the three beneficiaries would probably need to cosign - that shouldn't be a problem. But, this isn't somehow illegal, impossible, etc. It's just finding the right bank, etc. who knows what they are doing? Just checking. thanks,

Expert:  Barrister replied 1 year ago.
Yes, I would suggest a larger bank that would have a trust dept that is used to dealing with trust issues.
.
But no, it isn't in any way illegal as you have the authority as trustee to encumber the assets of the trust. It is just that the bank that may require additional security in the form of co-signers as the beneficiaries since they are the ultimate recipients of the property. If this is a short term loan that is not very large compared to the equity in the property, then the bank might just require you to sign off personally and not every beneficiary.
.

.

.

Thanks.

Barrister

.

.

If you need further help, just reply to me via the “REPLY” button and I will be happy to continue.

.

I cannot enter into an attorney client relationship, this is a public forum, and all posts are available for public viewing. There is no duty of confidentiality that attaches to any posts. The information provided is not a substitute for a local attorney’s legal advice.

Barrister, Attorney
Category: Estate Law
Satisfied Customers: 23546
Experience: 14 yrs estate law, real estate. Wills/Trusts/Probate
Barrister and 11 other Estate Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • My husband has been driving me insane with questions regarding estate issues since his mother died. I'm not a lawyer! Thanks to JustAnswer, I was able to calm his concerns. Loretta T Illinois
< Last | Next >
  • My husband has been driving me insane with questions regarding estate issues since his mother died. I'm not a lawyer! Thanks to JustAnswer, I was able to calm his concerns. Loretta T Illinois
  • Thanks Adam!! - A very direct and understandable response - you have been a great help! Happy Customer Ellicott City, MD
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
 
 
 

Meet The Experts:

 
 
 
  • Thomas McJD

    Attorney

    Satisfied Customers:

    3076
    Wills, Trusts, Probate & other Estate Matters
< Last | Next >
  • http://ww2.justanswer.com/uploads/MC/mclemorelawyer/2011-9-21_193631_IMGP8718Version2.64x64.jpg Thomas McJD's Avatar

    Thomas McJD

    Attorney

    Satisfied Customers:

    3076
    Wills, Trusts, Probate & other Estate Matters
  • http://ww2.justanswer.com/uploads/NY/nyclawyer/2012-6-7_22011_photo66139201112041.64x64.jpg Infolawyer's Avatar

    Infolawyer

    Attorney

    Satisfied Customers:

    3781
    Licensed attorney helping individuals and businesses.
  • http://ww2.justanswer.com/uploads/BA/barristerinky/2012-6-10_22423_office.64x64.jpg Barrister's Avatar

    Barrister

    Attorney

    Satisfied Customers:

    2188
    13 yrs estate law, real estate. Wills/Trusts/Probate
  • http://ww2.justanswer.com/uploads/RA/rayanswers/2012-6-7_23346_Untitled1.64x64.jpg RayAnswers's Avatar

    RayAnswers

    Attorney

    Satisfied Customers:

    1484
    Texas lawyer for 29 years in Estate law
  • http://ww2.justanswer.com/uploads/RO/RobertJDFL/2012-6-6_175352_7538220120606.64x64.jpg RobertJDFL's Avatar

    RobertJDFL

    Attorney

    Satisfied Customers:

    1226
    Experienced in multiple areas of the law.
  • http://ww2.justanswer.com/uploads/PH/philip.simmons/2012-6-7_161915_BIGPhilipSimmons.64x64.jpg P. Simmons's Avatar

    P. Simmons

    Attorney

    Satisfied Customers:

    770
    12+ yrs. of experience including estate law.
  • http://ww2.justanswer.com/uploads/RA/ratioscripta/2012-6-13_2955_foto3.64x64.jpg Ely's Avatar

    Ely

    Counselor at Law

    Satisfied Customers:

    754
    Fully licensed attorney in Texas in private practice.