Latest news with #trustee
Yahoo
02-08-2025
- Business
- Yahoo
What is a deed of trust?
Key takeaways A deed of trust is a legal agreement used in real estate transactions in which a third party — the trustee — holds the title to the property until the borrower repays the mortgage. A mortgage is a similar agreement, but it doesn't involve a third party. The borrower or lender — depending on state law — holds the title. Both agreements obligate the borrower to repay the home loan, with the home serving as collateral if they default. What is a deed of trust? A deed is a legal document that shows who has title to — or ownership of — a piece of property. And a deed of trust, or a 'trust deed,' is a deed that gets put into a trust. Like a mortgage, a deed of trust agreement obligates the borrower to repay a home loan, with the home serving as collateral if they default. Deeds of trust are used instead of mortgages in some states. How does a deed of trust work? There are three parties in a deed of trust: the lender, the homebuyer or borrower, and the trustee. The trustee is a third party who plays the role of intermediary for the real estate transaction, usually a title company or escrow company. It can also be another party, such as an attorney or bank. Here's how the process works: Shop Top Mortgage Rates A quicker path to financial freedom Your Path to Homeownership Personalized rates in minutes The lender gives the borrower the funds to make the home purchase. In exchange, the borrower provides the lender with a promissory note. This outlines the terms of the loan and the borrower's promise to pay. The borrower transfers the real property interest — or the right to the particular piece of real estate — to the trustee. The trustee holds the deed until the borrower repays the lender, at which point the borrower receives the deed. Is a deed of reconveyance the same as a deed of trust? A deed of trust is not the same as a deed of reconveyance. A deed of trust is used when you first take out a loan, and a deed of reconveyance is a legal document confirming that your home loan has been fully paid off. It proves that your lender has removed the lien on your property and transferred ownership of the property to you. Deed of trust vs. mortgage Both a deed of trust and a mortgage are agreements between a lender and a borrower to fund and repay a home loan. Both also state that the home serves as collateral for the loan, meaning if the borrower stops repayment, the lender has recourse. A deed of trust, however, adds a third party to the agreement: a trustee, an unbiased third party that holds the property's title while the loan is being repaid. A mortgage, on the other hand, involves only the lender and the borrower. Deeds of trust and default The differences between a mortgage and a deed of trust become important in cases of default. If a borrower fails to repay a mortgage, it's 'usually foreclosed judicially, through the court system,' according to Amy Loftsgordon, legal editor at Nolo. Judicial foreclosure is a lengthy process that involves expensive legal fees. If the borrower defaults on a loan secured by a deed of trust, the trustee has the right to take control of the property. 'Deeds of trust are usually foreclosed through an out-of-court, nonjudicial process,' Loftsgordon says. Nonjudicial foreclosure typically happens more quickly than judicial foreclosure. Learn more: Calculate your monthly mortgage payment State laws and deeds of trusts 'A deed of trust is not recognized by all states,' says Kevin Frankel, a partner at Fiffik Law Group. According to Rocket Lawyer, deeds of trust are used exclusively in 25 states and the District of Columbia, while nine states permit both the use of deeds of trust and mortgages. In the states that allow both mortgages and deeds of trust, such as Arizona and Michigan, the lender can choose which to use. Lenders typically opt for the deed of trust, as it speeds foreclosure proceedings if the borrower defaults. FAQ How does a deed of trust impact foreclosure? Under a deed of trust, if the borrower is in default, the property can be sold by the trustee without going through a costly, lengthy legal procedure. The process is known as a nonjudicial foreclosure. Nearly all deeds of trust include a power-of-sale clause, which allows the trustee to sell the home without needing to foreclose on it first. Alternatively, borrowers may pursue a deed in lieu of foreclosure. Can a deed of trust be transferred? Deed of trust transfers operate similarly to mortgage transfers, though neither one is especially common. Whether buying a house with a deed of trust or a mortgage, the transferee will most likely need to enter into a new arrangement as part of the sale. However, in certain circumstances, like a property owner's death, divorce or living will proceeding, both mortgage and deeds of trust can be transferred. The appropriate authorities — usually a municipal government — will have to record the transfer, just like they would for a purchase agreement. And, Frankel says, 'Based on the terms of the deed of trust, it may be assigned if all three parties agree in writing.' What is the difference between a deed of trust and promissory note? To compare a deed of trust to a promissory note, think of the deed of trust as the whole agreement while the promissory note is just one part. The promissory note focuses on the borrower's commitment to repay the lender. The deed of trust is an overarching document that specifies what happens if the borrower defaults on the loan. 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Forbes
01-08-2025
- Business
- Forbes
Offshore Trusts Offer Liability Protection But May Create More Tax
A lawsuit from a disgruntled employee of a successful family-owned business can bankrupt the family that built the business over generations. To prevent such unexpected ruin, a Foreign Asset Protection Trust (FAPT) can provide significant creditor protection, and even be implemented in conjunction with tax-efficient planning. However, FAPTs have a reputation for harboring hidden financial accounts and serving as tax evasion vehicles with tiered shell entities. Especially for founders and investors building wealth through investments in high-risk ventures and assets, FAPTs are an attractive option to mitigate liability exposure. In an increasingly global business world, especially for multinationals, FAPTs can be legal and effective vehicles to minimize exposure to frivolous lawsuits. However, the details of the structure and administration is key to its success and audit survival. A FAPT must have substantial economic substance. Especially for risky businesses, including professions such as high-stakes lawyering and medicine, a FAPT would likely meet that requirement with a purpose being to prevent asset depletion due to frivolous litigation. However, a settlor retaining rights to the management and control of the FAPT would risk losing the liability protection. Oftentimes, FAPTs are created in debtor-friendly jurisdictions such as the Cook Islands, Nevis, Jersey, etc. A FAPT has to have a foreign third-party as trustee provide broad discretion and control to the trustee. Companies operating as third-party trustees for the FAPTs rely on their selection based on their decades of reputation in managing the trust assets, discreetly and legally. While many asset protection trust are drafted appropriately to meet these and the multitude of irrevocable trust requirements, FAPT failures can arise from issues involving access to distributions and the nature of the assets held in the trusts. The essential structure relies on transferring the assets of the settlor subject to high-risk whether due to their business industry, investments, or marital situation to an offshore trust, the FAPT before the liability is contemplated. If the assets placed in the trust have a U.S. situs, while attachment may be protected due to the need to pursue the action in the offshore jurisdiction, it does not prevent the debtor from being forced to repatriate the asset and accordingly, pay the debt. Holding investments in an offshore financial institution, such as an account in Singapore, Liechtenstein, or the Cayman Islands may offer some additional protection and limit exposure. However, U.S. settlors and beneficiaries with interests in foreign trusts are subject to foreign trust reporting requirements including Forms 3520 and 3520-A in addition to foreign account reporting under FBAR and FinCen requirements. Most FAPTs are foreign grantor trusts with income flowing through to the settlor, which subject the trusts to foreign trust reporting. Additionally, FAPTs require careful navigation of cross-border tax laws and U.S. foreign tax and trust reporting obligations, which may include Passive Foreign Investment Corporation and Controlled Foreign Corporation rules including GILTI tax and FATCA and FinCen reporting. If the FAPT owns interest in a foreign corporation, such as a company established in the offshore jurisdiction, and the FAPT has US beneficiaries, the shareholders, depending on how the FAPT is structured may be subject to GILTI tax, now renamed under the One Beautiful Big Bill Tax Act (OBBBA) to NCTI which taxes income regardless of repatriation by way of a dividend payment. However, a FAPT drafted primarily with creditor-protection in mind generally does not offer tax-protection and the exposure to more nuanced tax implications due to the structure of investments in a FAPT may be increased without simultaneous asset protection planning which considers tax-efficiency.
Yahoo
31-07-2025
- Business
- Yahoo
I'm trustee of $65,000 going to my nephew. What are the rules for what I can do with the money?
Got a question about investing, how it fits into your overall financial plan and what strategies can help you make the most out of your money? You can write to me at . Please put 'Fix My Portfolio' in the subject line. I am the trustee of a young relative's inheritance from my father's estate, which includes a provision for $50,000 to be distributed from a trust, which goes into another trust formed to receive it. The new trust is to last until my nephew turns 25, after which the funds are to be turned over to him, barring any issues with creditors or substance abuse. The terms of the trust are generous and give me great latitude in spending the money for the benefit of the young relative. Another $15,000 is in a brokerage account that will need to transfer somewhere. A custodial account? The same trust account? Social Security wants to make a change that would cause 3.4 million more people to have to visit its field offices Why is Meta's stock soaring after earnings? It's about far more than the numbers. Will your spouse automatically inherit your 401(k)? The relative also has a 529 account with $14,000 in it, of which I am the custodian, but the young relative is still a couple of years away from college decisions. What am I to do with all of this? My father's trust was structured so that any taxable income in the trust was passed through to his personal income-tax return, and so avoided higher taxes that trusts may incur. For the new trust, who pays the tax? Will it pass through to the young relative? Would I be able to continue funding the current 529 from the trust or would I have to set up a new 529? Who would then get the credit on their tax return? Also, once the young relative has a job, I would like the trust to fund a Roth IRA on their behalf, and I would encourage them to keep it funded indefinitely. And how should I approach communicating all of this to the relative and their parents? The Trustee You've got a big job ahead of you, but it looks like you're taking it very seriously and approaching it with love. Your young relative is lucky to have a steady hand steering their financial future. You've asked a few questions here, but they mostly come down to what you are 'supposed' to do to fulfill the wishes of your father and what you are legally allowed to do as a trustee for a minor. If your father didn't spell out any specific wishes in the trust language, you'd have to rely on what he told you himself or generally how he managed his life. It seems like his grandchild was very important to him and he wanted the child to get a good education and learn enough to manage their own affairs by the time they turned 25 and the funds became theirs. Perhaps the best thing you could do for the child is teach them what you know about money and responsibility so they are ready to handle the funds on their own when it's time. As for what you're allowed to do, let's break that down. As the trust provided for a new trust to be created upon your father's death, you would create a tax identification number to correspond to that trust. You could then use that to open a trust account to hold the assets, including the $50,000 distribution and the $15,000 in the brokerage. If there's growth in the account, the trust would owe taxes. As trustee, you'd be responsible for filing the correct IRS forms each year if the trust income is over the filing threshold, which is generally $600. The trust itself would pay the tax if there were no distributions, and would pay trust income-tax rates, which are higher than individual rates. If you give money to the beneficiary in a given year, then the tax burden passes through to them. 'Strictly from a tax point of view, making a distribution to a beneficiary who is a minor would mean they are most likely in a much lower tax bracket,' said Jere Doyle, estate planning strategist for BNY Wealth. 'What people should realize is that income-tax rates for trusts are extremely compact. Once you get over $15,600 of taxable income, they are 37%. If you were married and filing jointly, you'd have to have over $750,000 in income for that tax rate.' The trust could continue to make 529 contributions to the existing account, most likely, but the deduction would be up to the rules of the state. New York, for instance, gives a state tax deduction for contributions, and the trust could claim that on a state trust income-tax return against any income. 'Trusts are governed by the same tax rules as individuals,' said Doyle. For the trust to be the owner of the account rather than you as an individual as custodian, the trust should have special provisions that authorize the trustee to hold the 529 plan and make distributions for qualified expenses, Doyle explained. Making Roth IRA contributions on behalf of the minor — or once the child becomes an adult — is more complicated. For one thing, to make a Roth IRA contribution as a minor or adult, you need earned income. Trust income would not count toward that. So once the child has a job, a custodian would be able to open a Roth IRA for minors — this could be you, as trustee or a parent. At the age of majority, which is 18 in most instances, the account would roll over to the young person's control. To make contributions to this account, you'd most likely need to make a distribution in cash from the trust and then put the money in the minor's Roth IRA account. After the beneficiary is a legal adult, this might mean handing them a check to make the deposit on their own. You could tell them you intend it for retirement, but once you hand over the money, you have little control. 'They can go have a good time with the money,' said Doyle. Which brings us back to point one. Your main job as trustee is to ensure good stewardship of the inheritance as a fiduciary. That's not just about picking good investments and keeping track of paperwork. You also need to think about the person you're protecting and what's best for them, and that means making sure they are ready for the responsibility that comes with managing money. Teach first, distribute later. You can also join the Retirement conversation in our . You can also join the Retirement conversation in our . 'He spent every dime': My daughter's husband is in prison. Is she responsible for his debts? 'I told him that wouldn't fly': My 90-year-old mother's adviser changed the beneficiaries on her accounts. What is going on? Josh Hawley's $600 rebates bill shows why Republicans win
CTV News
03-07-2025
- Politics
- CTV News
GECDSB trustee sanctions reconsidered, Armstrong's ban partially lifted
The Greater-Essex County District School Board office in Windsor, Ont., on Tuesday, May 20, 2025. (Robert Lothian/CTV News Windsor) Trustees with the Greater Essex Country District School Board (GECDSB) were given the opportunity Tuesday evening to revisit the sanctions made against trustee Nancy Armstrong. At the June 10 board meeting, trustees sanctioned Armstrong for comments made on a podcast surrounding the naming process of Erie Migration District School in Kingsville, that were found to have violated the board's trustee code of conduct. Armstrong responded in writing confirming she would accept the invitation to engage in restorative justice sessions. 'I am genuinely looking forward to the opportunity to address unanswered questions, engage in meaningful discussions around unresolved issues, and reflect on the vital roles that trustees play in our communities,' said Armstrong in her response to trustees. Armstrong asked for the board to reconsider her ban on attending private session meetings until the end of her term. 'There is a genuine risk that the decision is being judged as punitive rather than constructive which is actively undermining the already limited trust in what is widely expected to be the Board's commitment to transparency, fairness, and collaboration,' said Armstrong. Board chair Gale Hatfield brought forward a motion seeking to reduce the ban to the end of 2025, rather than the next election, but also banning Armstrong from public meetings. 'I think the investigators report clearly explains to us that there was a breach of confidentiality, and I take that very seriously, however, on reflection and taking into consideration trustee Armstrong's letter, I'm not sure how that will serve any purpose other than to be punitive,' Hatfield said. Trustee Linda Qin said she believed trustees spoke out to the media during the school naming process to protect their reputation and called the move to ban from Armstrong from public meetings punitive. 'The reason we go to media is because we are silenced here, and we were not allowed to debate, we we're not allowed to debate, that's the fact,' Qin said. Trustee Julia Burgess said she believed the restorative justice sessions would lead to healing. 'We have not entered into restorative justice yet where there I think will be a learning curve, and, hopefully, acceptance and understanding of what confidentiality is,' Burgess said. Hatfield's motion failed and other motions were presented with varying timelines. As motions kept failing, trustees Ron LeClair and Kim McKinley left the meeting. Trustee Cathy Cooke introduced a motion to bar Armstrong from private meetings until the end of November 2025, which eventually passed. Trustees will next meet on Oct. 21. — Dustin Coffman/AM800 News
Yahoo
27-06-2025
- General
- Yahoo
Libby Public Schools seek candidates for board trustee opening
Jun. 27—Libby Public Schools is seeking applications for those interested in filling a vacancy on the school board. The new appointee will fill the vacancy until the May 2026 election. Those interested in serving as a board trustee are asked to send a letter of interest to Libby Public Schools, Board of Trustees, 724 Louisiana Ave., Libby, MT 59923. For more information, call 293-8811, ext. 1005. The deadline to apply is 4 p.m. Thursday, July 3.
