Rubicon Mortgage Fund makes loans to trusts and estates across California — most often so one beneficiary can keep a property the others want to cash out of, without forcing a sale.
Why Trusts and Estates Struggle to Borrow
The borrower is not a person a bank recognises
A conventional lender underwrites an individual with income, a credit history and tax returns. A trust has none of those. Neither does an estate in probate. The asset can be excellent and entirely unencumbered, and the file still does not fit the form.
We lend to individuals, LLCs, corporations, trusts and partnerships, and we underwrite the property rather than the borrower’s financial profile. For a trust holding real estate, that is usually the difference between a loan and a sale.
The deadlines come from courts and families, not markets
Estate timelines are set by probate calendars, beneficiary agreements and the patience of siblings who have already waited. They are not set by how long an underwriter would like. A process that takes ninety days frequently arrives after the family has given up and listed the property.
The California Property Tax Problem
This is the part that costs families the most money and gets the least attention.
What Proposition 19 changed
Before February 2021, children could generally inherit a parent’s California property and keep the parent’s assessed value, including on rental and investment property. Proposition 19 narrowed that considerably. The exclusion now applies mainly to a family home that the inheriting child makes their own principal residence, and it is capped — at a figure the California State Board of Equalization adjusts for inflation rather than a fixed amount.
Where the exclusion does not apply, the property is reassessed at current market value. On a property held in a family for decades under Proposition 13, that increase is large, permanent, and arrives every year thereafter.
Why the loan has to come from outside the trust
When several siblings inherit a property and one wants to keep it, the money to pay out the others has to come from somewhere. Where it comes from matters.
If the sibling buys the others’ shares personally, that is generally treated as a transfer between siblings — which no parent-child exclusion covers. If instead a third-party lender lends to the trust, the trust can distribute cash to the siblings being bought out and the property to the one keeping it, and the transfer remains parent-to-child.
That is the entire reason trust loans of this kind exist, and it is why the lender has to be an outside party rather than a beneficiary.
We are a lender, not a tax or legal adviser. Whether an exclusion applies to a particular estate is a question for the family’s attorney and CPA and the county assessor, and the rules have changed before. Bring us in once your advisers have told you the structure works — we will fund it, and we are used to working alongside them.
Situations We Fund
- Sibling and beneficiary buyouts where one heir keeps the property and the others take cash
- Probate and estate administration where the estate needs liquidity before it can close
- Trust refinances of property held in a family or irrevocable trust
- Paying estate costs, taxes and creditors without selling the real estate to do it
- Equalising distributions where the estate is mostly one property and the beneficiaries want different things
- Property in poor condition that must be repaired before it can be sold or financed conventionally
Full parameters are on our borrowers and lending criteria page, and related structures are covered under complex loan structures and cash-out refinance loans.
Loans to Trusts and Estates: FAQs
Can a trust be the borrower?
Yes. We lend to trusts directly, as well as to estates, LLCs, corporations, partnerships and individuals.
Can you lend while the property is still in probate?
Often, yes, depending on the stage and what authority the personal representative holds. Tell us where the probate stands at the first conversation, because it drives the timeline more than anything else.
Do the beneficiaries need credit or income?
No. We do not run credit and we do not ask for tax returns or income statements. We underwrite the real estate.
How fast can you fund a buyout?
Most borrowers have preliminary terms within 24 hours, and closings inside 30 days are routine.
Will you lend if the house needs work?
Yes. Inherited property is frequently deferred-maintenance property, and that does not disqualify it.
How does the loan get repaid?
Usually by the beneficiary refinancing into long-term financing in their own name once title is settled, or by a sale on the family’s own timeline rather than a forced one.
Do you require an appraisal?
No, on any loan. Someone from Rubicon inspects the property in person.
Are loans to trusts and estates regulated in California?
Yes. Rubicon lending is made or arranged pursuant to California Financing Law and overseen by the California Department of Financial Protection and Innovation. All loans are business purpose and secured in 1st position.