Legal Question in Wills and Trusts in California

As Trustee, I may loan money to the trust for any purpose, which is allowed by the language of the trust, at "the then current rate of interest." The loan becomes a "first lien against the assets of the trust." What is "the then current rate of interest"? Are we talking AMEX cash advance rates in the 20% to 30% APR, or mortgage rates in the 5% to 9% APR range? (It just so happens that the trust's current main asset is commercial real estate.)


Asked on 4/21/14, 11:27 am

3 Answers from Attorneys

Victor Waid Law Office of Victor Waid

The current rate of interest is the rate set by the Federal Reserve Bank of the United States; visit their web site for the rate on any particular day.

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Answered on 4/21/14, 11:44 am
William Christian Rodi Pollock

That depends on the nature of the loan. Are you making an AMEX type of cash advance? Are you providing a secured real estate loan? What is the loan structure and why is it being done? What is the credit structure of the trust? Is this a short term loan? Long term? Who are the beneficiaries? Will the debt also be theirs, or will it be paid before distribution? Is the grantor still alive and with capacity so he or she can set terms?

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Answered on 4/21/14, 11:47 am
Aaron Feldman Feldman Law Group

The rate depends on many factors: secured versus unsecured being the most important. If unsecured, then the person better be very credit worthy or the amount not particularly significant or else you may not be acting in a manner befitting a fiduciary. Also, I am assuming that you are not the potential borrower. Overall, it seems that the trust owns significant assets and it is probably a good idea for you to consider having an attorney to represent you as trustee. I would be happy to assist you with these sorts of trust administration issues.

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Answered on 4/21/14, 3:33 pm


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