Securing a loan on a future inheritance

In message , Edward writes

If the testator is still alive, then no chance

BUT, I assume you mean that the testator has already kicked the bucket and your dosh is held in trust until you attain age 25.

A Bank would only lend if they were 100% happy that the trustees will irrevocably repay the bank on your 25th birthday. The trustees ability to do this would not only depend on their good standing in the eyes of the bank, but also on their powers and abilities as determined by the trust. It is unlikekly that the bank would go along with it, especially without any further security. However, many trusts of this type allow the trustees to make advancements for the benefit of the beneficiary, so you would have to convince them it was a good idea.

On balance, I would forget it if I were you.

................................................................................................. Where are you based? Do you have any savings now? Are you employed? Do you have anything to offer as security other than future inheritance? Is the inheritance held in trust? Is it in liquid assets or tied up in shares/bonds/trusts. Will you have full access to inheritance not just income from it?Is the person/persons who you will inherit from actually dead? Has probate been issued to prove the will? What happens if you don't inherit for whatever reason?

All questions that came to mind within a couple of secs of reading your post.I can't think of one reason myself why anyone would lend you the money. Eric

Two ways that could happen:

(1) The trustees agree to act as guarantors. Doesn't seem likely.

(2) The trustees divert 80k of the loot into a 4 year bond in the youngster's name, from which it is impossible to withdraw money before it matures. Then the loan is taken from the same bank.

Ever one to pour cold water on the exuberance of youth, eh, oldtimer?

Seriously, though, I don't think money's the biggest problem here. Is the OP in a position to manage this undertaking properly? Is he going to be travelling out there himself, or does he have reliable friends on the spot? Wealthy tourists will have expectations. Fail to meet them at your peril, Preppie.

In message , Ronald Raygun writes

That wouldne be good enough even if it were likely. The bank needs to

NO, if the trustees placed the dosh in an account in the youngsters name it is the same as giving him the dosh now.

BAAHH!!! (Humbug)

Why do that in particular? e.g why holiday lets and not one of many other things you could do with 80k? Why a 3rd world country? Why let to tourists? Why wealthy ones? (they will have bigger expectations to meet) How politically stable is the country? What is the position of the govt to tourism? And the locals? And why be so coy about what country it is? What country is it?

And is the 80k the cost of buying the property, or does it include other expenditures, such as local management, refitting (if needed?) etc.

Even if there's a signed contract with a hitman with an appropriate completion date?

Jim.

Yes. Someone might hit the hitman.

In message , Jim Ley writes

Not if the trail leads back to our man!

"wouldne"? Is that some naff attempt at imitating the Scots vernacular, you silly Scouse, you? -- No, it was just an innocent typo, quoth he.

-- Yeah right [that well-known example of a double positive resolving to a negative].

I was always under the impression that guaranteeing a loan was about as irrevocable as it gets. Do you demur?

Not if the terms of the account are such that its holder cannot extract the funds prior to 4 years hence, by which time the terms of the trust are that the youngster may in any event have unfettered access.

Hmm, so you think the lendor might require a life insurance policy on the hitman and this could push the costs up?

Jim.

In message , Ronald Raygun writes

Its not the 'guarantee' its who is the guarantor, the trust or the individuals.

No, the account would need to be in the names of the Trustees, not the beneficiary. (I accept that those whiskey drinking lawyer friends up there may do it differently than we do down here) so as to ensure title stays with the trust, otherwise it gets complicated, i.e. Who pays the tax? Etc.,

No. I think no lender would risk becoming an accomplice to murder.

If the trustees act as guarantors, that's that. If the terms of the trust don't empower them so to do, that's their lookout and they'll carry the can if the lender is forced to call in the guarantee.

OK, I take the point that the lender will wish to be satisfied either that the guarantors are of substance in their own right, or if not that the trust affords them the discretion so to act even if only up to time X, at which point responsibility passes to the borrower, who will presumably agree to act as his own guarantor.

Up where? Look here, my good man, living next the Irish Sea may give you an affinity for how they spell the stuff on the other side thereof, but North of the border there is no 'e' in whisky. This is so folk will know it won't taste as foul as transatlantic bourbon. And as for "differently than", I fear you may be in a transatlantic frame of mind already. SURELY you're not thinking of emigrating. MY GOD! Does your granddaughter have an American paramour?

Anyway, surely where money is held "in trust for X by Y" title is already with X but authority to disburse rests with Y.

In message , Ronald Raygun writes

Eh? Youve been at too much of however you spell that stuff you drink up there. How does guaranteeing you own debt by your own guarantee enhance the position of the creditor?

Thank God there is a difference apart from quality of Taste.!

No NO! I'm not a US Bourbon Man, but a bottle of Jamesons, well thats a different matter!

No, its title is with Y, but Y holds it for X. (difficult I know, but thats the nature of Trusts)

.....and how legally stable is the country !

Suggest the op browses/posts on The TMF Property Investing Overseas board

Daytona

"Jim Ley" wrote

Would that contract be enforceable by a court of law?? :-((

Well, there seemed to be some doubts over title, so if you had guarantees from both the trustee and the er, er, the, er, well, whatever you call the person on whose behalf the trust is held in trust, then you should have both angles covered without risk of losing out when title changes.

I've always assumed they tasted the same, and have never felt the need to conduct an experiment to test that assumption. If you'd care to send me a sample, I'd be prepared to give it a fair trial.

In message , Ronald Raygun writes

I still dont see how having a guarantee from the debtor enhances the position of the creditor.

Collateral security is often proffered but in this case a prudent creditor would merely seek to secure and ensure repayment directly from the trust itself, not by way of collateral security from third parties, who also happen, by chance, to be trustees of the trust.

Guarantees are effective only as a backup security, they are not a method of repayment.

Perhaps the trust could actually buy the house and allow the OP to use it.

Robert