Which banks lend to Family Trusts?
Those banks and financial institutions that offer lending to Family Trusts have different loan products for the needs of both the trusts and beneficiaries. Whether a family trust can normally obtain a loan or not depends, inter alia, on various factors: the nature of the trust, the underlying assets held in this trust, and the financial positions of the beneficiaries. Options usually include:
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Private Banks:
- JPMorgan Private Bank: Considered one of the largest players in offering special trust and estate services, the bank offers a variety of lending products and services against Family Trusts. More precisely, for high net-worth individuals whose net worth ranges from tens up to hundreds of millions of dollars, JPMorgan extends credit in the form of trust mortgages and other types of specially designed loans against major trust assets.
- Citi Private Bank: The bank has provided very unique credit products to Family Trusts in the form of lines of credit, mortgages, or investment loans that often accompany flexible terms to meet the financial objectives of the trust.
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Large Commercial Banks:
- U.S. Bank: U.S. Bank provides trust services. It also extends credit to Family Trusts. The bank issues different types of credit facilities, such as mortgages and lines of credit, which are contingent upon the assets and financial standing of the trust.
- Bank of America: Bank of America has a private bank wing through which it operates its trust services, besides other services like lending. Through this, it offers lines of credit and mortgages against home equity and for Family Trusts that have qualified assets.
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Speciality Lenders:
- Northern Trust: Northern Trust offers family trust lending services, including extremely specialized collateralized loans to facilitate estate planning and asset management. Structured Credit solutions for the wealthiest families are part of the offering, too.
Considerations
- Trust Structure: The type of trust is another factor a bank considers in making decisions to lend. Generally speaking, it would be easier to lend to revocable trusts, while the bank would tend to be more circumspect in dealing with irrevocable trusts because the settlor has lost control over the assets.
- It may also be a big factor for the lender if beneficiary and asset stability are called upon to approve loans according to the type of assets held within the trust.
In cases where such situations do occur, Family Trusts in need of lending should consult with a financial advisor or trust officer able to provide an ideal lending strategy that meets the bank's criteria, but at the same time also serves best the goals of the trust itself.
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