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Ask Barrister Your Own Question
Barrister, Attorney
Category: Estate Law
Satisfied Customers: 34784
Experience:  16 yrs estate law, real estate. Wills/Trusts/Probate
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My wife is a trustee with 2 sisters over an irrevocable trust.

Customer Question

My wife is a trustee with 2 sisters over an irrevocable trust. Our daughter has 300k in it and wants to buy a house. 1) Can the trust mortgage the house $225k to her. 2) Can she repay principal only per amort table and are there any tax implications if principal and interest.
Submitted: 1 year ago.
Category: Estate Law
Expert:  Barrister replied 1 year ago.
Hello and welcome! My name is ***** ***** I will try my level best to help with your situation or get you to someone who can.
Does the trust give the trustee the power to engage in financial transactions on behalf of the trust with regard to trust assets? (this is typical)
Customer: replied 1 year ago.
My wife has power and does financial transactions on behalf of trust
Expert:  Barrister replied 1 year ago.
Ok, then if the trust grants her financial power to undertake transactions on behalf of the trust, then she could loan daughter the money for the house purchase and have daughter sign a Note and Mortgage agreeing to repay the trust for the loan. As for any interest, this would be negotiable between the parties, but there is no prohibition on the trust making an interest free loan to her if the trustee chose to do so. Trusts are entirely confidential and private documents, so no court would oversee the transaction. If interest was charged, then the trust would have to report this as income to it on any tax returns and pay any applicable income taxes..thanksBarrister

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