Legal Question in Wills and Trusts in New York
Equity Loan On Living Trust Property
My Father signed his house over to his children with a stipulation that he must be allowed to live in it as long as he wishes. Can we, the children, obtain a equity loan against the house without adversely affecting that trust. If so, who must sign for the loan, the children( one or all), the Father ?
2 Answers from Attorneys
Re: Equity Loan On Living Trust Property
If the house is in the name of the trust, the named trustee is the only one with authority .
Re: Equity Loan On Living Trust Property
If the title to the house is in a trust, the acting Trustee(s) apply for the loan, presuming the trust language allows the house to be pledged for a mortgage. Since there is a stipulation in the trust, the lender may want personal guarantees of the beneficiaries. You do not say what the purpose is of the loan, which might also impact on the ability to get financing. If the purpose is other than for improvement of the house itself (such as a loan to one of the beneficiaries for personal use), this might not be a permitted use of the house as collateral. More information on the language of the trust is needed to provide a better answer.
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