Legal Question in Wills and Trusts in Maryland

This is a real estate/trust question. I would like to borrow money form my mother to use for construction of a home. Not the entire cost, just fifty thousand to start the site work. My sister did the same thing about eight years ago and had it set up as a mortgage. Everything went fine with her loanand it was borrowed against my mothers trust. I would like to borrow from the same trust, except I just realized that I'm listed as a trustee. Will this create a problem for me? If so, what are my options? Could the money be loaned to just my wife, or would that still be considered an issue if I'm also on the deed?

Any help would be appreciated,

John


Asked on 2/20/11, 5:04 pm

1 Answer from Attorneys
Charles Stewart Law Office of Charles R. Stewart, LLC

It depends on the terms and language of the trust document. Most likely, you should be able to borrow, but at market terms (i.e. interest rate, etc.) - there also may be tax implications if not. You mention that you are A trustee - does this mean there are others? It may be better if they were more involved in the lender side of the transaction and you abstain from loaning from the trust to yourself. It wouldn't be a bad idea to have written consent of each of the beneficiaries as well. It may be wise to involve an attorney to keep things on the up-and-up.

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Answered on 2/21/11, 4:24 pm


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