Because of the highinterest rates, children with access to a trust are more likely to tap intotrust funds to buy a house. This alternative can buy a home outright, orprevent people from taking out large mortgages. Borrowing from a trust iseasier than applying for a mortgage. Two specific trusts might be good options.The first is a Qualified Personal Residence Trust, and the other is anIntentionally Defective Grantor Trust. Regardless of the type of trust thereare some important things a financial planner should consider. They are listedbelow:
- 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.
