purchase a home for beneficary

[aperry58]

I am a beneficiary to an irrevocable trust. And I had asked if the trust if the trust could by a house and title it in the trust name for me. Because my credit is not good enough for me qualify for a mortgage. I was told by the trust officer. When a home is purchased in a trust it is based on the beneficiary's financial statement. Meaning, if we were to purchase a home in trust for you it the mortgage company would look to your credit....so this will not solve your problem.


Is that true.

 

[dee_dub]

Not as far as I know. It is the trustee, not you, that is purchasing the house. What the trustee uses it for is irrelevant. As long as the trust has good credit, I don't see any reason why it would be denied.

How old are you? If you are of the age of majority, why not collapse the trust, receive the proceeds, and buy your own house outright?

 

[aperry58]

Not as far as I know. It is the trustee, not you, that is purchasing the house. What the trustee uses it for is irrelevant. As long as the trust has good credit, I don't see any reason why it would be denied.

How old are you? If you are of the age of majority, why not collapse the trust, receive the proceeds, and buy your own house outright?[/QUOTE

I am 49 years old. This was a great Aunt that left her money in a trust for several of us which is held by JP Morgan. I was always under the assumption that I could not collapse the trust. But when I died the assets in the trust fund could go to whoever I choose. I am just suppose to get the interest only and If I do want money for a car or other major expense, I would have to plead with them, do a budget and have a trust committee make the decision to approve this or not.
I am kind of afraid with the economy that I might lose value and I thought if the trust were to purchase the home and deed it their name. I could not use this as collateral on a loan and the house would go to my heirs upon my passing.

 

[dee_dub]

I'm not aware of any reason why you couldn't collapse the trust and receive your share. If all beneficiaries are of age and agree, it should be doable. You should talk to the trustee or to an estates lawyer.

Economically, I would hazard a guess that your trust funds are actually safer in a trust account than in real estate.