Legal Question in Real Estate Law in Oregon

Using family trust (in California) to buy home in Oregon

Hi, we are looking to buy a home in Oregon. My mom lives in California. She is offering to invest $100000 from the trust to help us purchase of the house. She heard a radio program in the SF Bay area that said to make the house a part of the trust. For example, we buy a $300K house, the trust would own 1/3. Essentially, the goal would be to have us have a lower mortgage payment and be able to get into a home sooner.

Questions:

- What would be the pros and cons to this situation?

- What is the fairest way to compensate to the other parties (my brothers) of the trust? (Our initial thought would be to take our ''third'' and subtract $100K plus an interest rate?)

- How does it work to use a trust from out of state?

- How can we protect the trust from liability of the house? If the trust is worth $1.5 million, can we just have home owner's insurance up to $2 million?

- How do taxes work?

Please feel free to share any other advice regarding this matter. I am sure we are not thinking of all factors in this decision.

At first glance, it seems a win-win situation.

Thank you for your time!


Asked on 6/06/06, 4:25 pm

1 Answer from Attorneys
Susan Burns Law Office of Susan Ford Burns

Re: Using family trust (in California) to buy home in Oregon

There are a significant number of questions here, the answers to which really depend on the various parties' goals. For example, if the trust has an ownership interest in the house, then it is probably entitled to a share of any appreciation from the house. Further, that ownership interest may have to be divided according to the trust upon the death of your mother.

The kinds of questions you are asking really need an indepth examination and cannot really be properly answered on the internet.

Unless the trust contains language prohibiting it, there is no barrier to the California trust funding (partially or fully) your purchase of a house in Oregon.

How much of this will work depends on the parties' agreement. This kind of a purchase really needs a written contract between you and the trust that spcifically delineates each parties' rights and responsibilities.

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Answered on 6/07/06, 2:24 pm


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