Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Friday, October 11, 2013

An Alternative to Taking Out A Mortgage

HouseBecause 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 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
  • Tax implications

See Anya Martin Tapping the Trusty Trust Fund to Buy a House, Wall Street Journal,  Sep. 19, 2013.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.


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