Frequently Asked Questions

In the State of California, real property is reassessed at market value if sold or transferred, and property taxes can increase dramatically as a result. However, if the sale or transfer is between parents and their children, or from grandparents to their grandchildren, under specific/limited circumstances, the property will not be reassessed if certain conditions are met, and the proper application is timely filed. These propositions allow the new property owners to avoid property tax increases when acquiring property from their parents or children or from their grandparents. The new owner’s taxes are calculated on the established Proposition 13 base year value, instead of the current market value when the property is acquired. For additional information, please visit the BOE FAQs site: http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm

Trustees, executors, administrators, private fiduciaries, and estate and trust attorneys routinely encounter problems when administering cash-poor trusts, estates or probates after someone passes away. These problems include how to equalize and distribute assets between children so that everyone gets an equal share; how to pay expenses when there is little or no cash in the estate; how to pay off a reverse mortgage that a parent or grandparent has taken out on the home; or how to structure the trust or estate administration so that one beneficiary receives real property while ensuring that the other beneficiaries receive an equal share. Often, there is too little cash in the estate to achieve these goals, and the trustee or executor is forced to sell real property assets in the course of the trust or estate administration in order to raise the money needed. HCS Equity provides private 3rd party loans to create necessary liquidity to retain the applicable property tax exemptions, and can do so in a fraction of the time it takes to prep and sell a property.

Trustees (with the power to encumber trust property), Administrators of estates (with Letters of Administration and Full/Limited Authority), Fiduciaries, and Conservators. Please note, restrictions do apply.

In most cases, and with all the supporting documentation, HCS Equity can fund a loan in as little as 5-7 business days.

Often, beneficiaries have the funds to pay the other beneficiaries for their share of the real property in the trust, or lend money to the trust necessary to make an equal distribution of assets. Per BOE guidelines, “a loan cannot be made by any of the beneficiaries of the real property to the trust in order to equalize the trust interests. Such loan would be considered payment for the other beneficiaries’ interests in the real property resulting in a transfer between beneficiaries rather than a transfer from parent to child, which would disqualify the transfer from the parent-child exclusion.” http://www.boe.ca.gov/proptaxes/pdf/lta08018.pdf

HCS Equity provides private 3rd party loans ranging from $30K – $2M, 1 – 3 year terms, no prepayment penalties and no minimum months of interest. We work to customize specific solutions that best fit the needs of the particular situation.

Step 1
Step 2
Step 3
Step 4
Step 5
Step 6

Determine who will retain property

Determine loan amount

HCS Equity provides a loan to the trust

Equalization and distribution

Change of ownership

Trust loan is repaid

Oftentimes one or more beneficiary wishes to retain the property and it’s tax base.

The property value, other assets/cash in the trust or estate, and the number of beneficiaries are used to determine the liquidity needs for equalization.

HCS Equity provides private capital directly to the trust to create the liquidity needed for equalization, a necessary step to avoid reassessment under Proposition 58.

Cash or property are distributed as mutually agreed upon by the beneficiaries.

Change of ownership and exclusion from reassessment are filed.

The beneficiary retaining the property either repays the private loan with their own funds, or secures conventional financing to repay the trust loan.

In most cases limited documentation is required, which varies slightly on a case-by-case basis. Please contact us to discuss your specific matter, and we can provide a detailed list of items needed.

Banks and credit unions offer little help in this regard, whether out of risk-averse policies or simple lack of knowledge regarding trust or estate administration.

No, we follow the BOE guidelines and lend directly to the Trust, Estate or Probate, and use the subject property as collateral.

No, our loans are not personally guaranteed, and as such do not require an individual’s financial or credit information. However, credit scores may have an impact on a beneficiary’s ability to refinance out of our private loan once the property is transferred out of the Trust, Estate or Probate into their name.

HCS Equity does not provide inheritance advances.

In the State of California, real property is reassessed at market value if sold or transferred, and property taxes can increase dramatically as a result. However, if the sale or transfer is between parents and their children, or from grandparents to their grandchildren, under specific/limited circumstances, the property will not be reassessed if certain conditions are met, and the proper application is timely filed. These propositions allow the new property owners to avoid property tax increases when acquiring property from their parents or children or from their grandparents. The new owner’s taxes are calculated on the established Proposition 13 base year value, instead of the current market value when the property is acquired. For additional information, please visit the BOE FAQs site: http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm

Trustees, executors, administrators, private fiduciaries, and estate and trust attorneys routinely encounter problems when administering cash-poor trusts, estates or probates after someone passes away. These problems include how to equalize and distribute assets between children so that everyone gets an equal share; how to pay expenses when there is little or no cash in the estate; how to pay off a reverse mortgage that a parent or grandparent has taken out on the home; or how to structure the trust or estate administration so that one beneficiary receives real property while ensuring that the other beneficiaries receive an equal share. Often, there is too little cash in the estate to achieve these goals, and the trustee or executor is forced to sell real property assets in the course of the trust or estate administration in order to raise the money needed. HCS Equity provides private 3rd party loans to create necessary liquidity to retain the applicable property tax exemptions, and can do so in a fraction of the time it takes to prep and sell a property.

Trustees (with the power to encumber trust property), Administrators of estates (with Letters of Administration and Full/Limited Authority), Fiduciaries, and Conservators. Please note, restrictions do apply.

In most cases, and with all the supporting documentation, HCS Equity can fund a loan in as little as 5-7 business days.

Often, beneficiaries have the funds to pay the other beneficiaries for their share of the real property in the trust, or lend money to the trust necessary to make an equal distribution of assets. Per BOE guidelines, “a loan cannot be made by any of the beneficiaries of the real property to the trust in order to equalize the trust interests. Such loan would be considered payment for the other beneficiaries’ interests in the real property resulting in a transfer between beneficiaries rather than a transfer from parent to child, which would disqualify the transfer from the parent-child exclusion.” http://www.boe.ca.gov/proptaxes/pdf/lta08018.pdf

HCS Equity provides private 3rd party loans ranging from $30K – $2M, 1 – 3 year terms, no prepayment penalties and no minimum months of interest. We work to customize specific solutions that best fit the needs of the particular situation.

Step 1

Determine who will retain property
Oftentimes one or more beneficiary wishes to retain the property and it’s tax base

Step 2

Determine loan amount
The property value, other assets/cash in the trust, and the number of beneficiaries are used to determine the liquidity needs of the trust

Step 3

HCS Equity provides a loan to the trust
HCS Equity provides private capital directly to the trust to create liquidity needed for equalization, a necessary step to avoid reassessment under Proposition 58.

Step 4

Equalization and distribution
Cash or property are distributed as mutually agreed upon by the beneficiaries

Step 5

Change of ownership
Change of ownership and exclusion from reassessment are filed

Step 6

Trust loan is repaid
The beneficiary retaining the property either repays the trust loan with their own funds, or secures conventional financing to repay the trust loan

In most cases limited documentation is required, which varies slightly on a case-by-case basis. Please contact us to discuss your specific matter, and we can provide a detailed list of items needed.

Banks and credit unions offer little help in this regard, whether out of risk-averse policies or simple lack of knowledge regarding trust or estate administration.

No, we follow the BOE guidelines and lend directly to the Trust, Estate or Probate, and use the subject property as collateral.

No, our loans are not personally guaranteed, and as such do not require an individual’s financial or credit information. However, credit scores may have an impact on a beneficiary’s ability to refinance out of our private loan once the property is transferred out of the Trust, Estate or Probate into their name.

HCS Equity does not provide inheritance advances.