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09-23-2022, 12:53 PM #1
- Join Date
- May 2022
- Posts
- 1
Funding a Truste
Hello all,
I am inquiring on the pros/cons of funding an LLC owned by a truste? If anyone has any knowledge on this please share.
Thanks!
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09-23-2022, 01:01 PM #2
- Join Date
- Mar 2018
- Location
- Salt Lake City, UT
- Posts
- 86
Is the account a trust account? Pretty sure they are really really hard to collect from.
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09-23-2022, 01:13 PM #3
A trust in essence is similar to "power of attorney" in that someone(s) (a trustee or board appointed by the trust) oversees and controls the distribution of assets for a beneficiary by whomever created the trust. E.G. a "trust fund" or someone that owns the company is dying and appointed a trust to take control over the company & assets to avoid multiple beneficiaries fighting over it.
As such, you should look into what the exact arrangement of the trust is. Who is the board/trustee. Who are the beneficiaries.
Also, pending what the story or situation is - who is signing your contract claiming they have a right as beneficiary over the company? How long have they been operating the company? How long has it been in trust? What is the plan to have it released from the trust?
Historically, many (if not, all) funders steer clear of these deals for the above reasons & it would be a circus to ensure your contract is legally sound & structured properly.
Most deals are not worth the trouble. I don't think you can legally fund & debit a trust account without the explicit permission and authorization of the trust being involved.
Hopefully it's not just some crappy 20-50k deal you have and it's worth for you to go through all this trouble to get it done.
Finally - make sure you consult your legal team before proceeding.Anthony Diamond
Underwriter
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09-23-2022, 03:07 PM #4
I have done several hard money property loans with a property in trust. I would think you just need the trustee to sign the docs and be on the bank account. We had them create a LLC, pulled the property out of trust, sign the loan docs and then put the property back in trust. I am doing one in Hawaii right now where the loan is funded into the trust which most lender's won't do.
Steve Benjamin
Professional Business Loans
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09-23-2022, 05:00 PM #5
I consistently have to explain how difficult it is for a funder to fund these types of business structures. No matter what amount the deal is.
It's too much of a hassle to collect.
Generally these type of account structures are formed to protect the assets in the trust. Yet you're looking to obtain funding you're personally guaranteeing with something protected that can't be recovered easily.
Not worth the time, not worth the headacheThe Brokers Nightmare
I don't want peace, I want problems, ALWAYS!
Florida-Based
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