Posted on: 16th May, 2010 04:07 pm
property was left to 5 siblings in an irrevocable living trust. three of the siblings want to sell the property and cash out, two, want to live in the property. can the siblings that want to stay in the house buy out the three that want to cash out?
could this be accomplished with a refinance? the trust states that the trustee can borrow against the assets of the trust.
the home is in california and has a value of around 575k
any suggestions or information would be helpful.
thanks daniel
could this be accomplished with a refinance? the trust states that the trustee can borrow against the assets of the trust.
the home is in california and has a value of around 575k
any suggestions or information would be helpful.
thanks daniel
Hi daniel,
The siblings who want to stay in the property can buy out the siblings who wants to sell it off for a stipulated cash amount. Those siblings can then transfer the property by signing a quit claim deed. The owners of the property can refinance the loan in their name. However, as it's an irrevocable trust, I would suggest the owners to contact an attorney and take his opinion in this matter.
The siblings who want to stay in the property can buy out the siblings who wants to sell it off for a stipulated cash amount. Those siblings can then transfer the property by signing a quit claim deed. The owners of the property can refinance the loan in their name. However, as it's an irrevocable trust, I would suggest the owners to contact an attorney and take his opinion in this matter.
I want to reiterate the advice to see a California estate planning attorney. There are California property tax issues that will come in to play. There is no exclusion from reassessment for transfers between siblings. Depending on the facts, there may be a way to avoid the reassessment. However, it has to be done properly and the funds must come from the right source.