Can beneficiaries borrow from a trust?
Abstract: Interest rates remain extremely low, enhancing the benefits of intrafamily loans. These loans allow a person to provide financial assistance to loved ones while potentially reducing gift and estate taxes. But what about families that lack the liquid assets to make such loans? One lesser-known possibility is for trust beneficiaries to borrow money from a trust. This article explains the benefits of intrafamily loans and details why a trust loan may be more advantageous. A sidebar provides a scenario where an intrafamily loan can result in reduced taxes.