How to Secure Debt With Trust Assets

Secured debt is debt backed by some type of collateral to be turned over to the lender in the event that the borrower cannot repay the debt. Secured debt generally grants the borrower better terms and interest rates than unsecured debt. Many kinds of property can be used to secure debt, including homes. Provided you are a trustee or a trustee approves of your action, you can use assets from a trust to secure debt.

Instructions

1

Determine whether the debt you wish to insure is an existing unsecured debt or loan you intend to take on soon. If it is an existing unsecured debt, proceed to Step 2. If not, proceed to Step 3.

2

Visit a bank to discuss taking out a new secured loan with your bank, using your trust assets as collateral. This will enable you to pay off the old, unsecured debt and start paying down the new, secured debt with better terms and interest rates.

3

Contact the trustee of the trust to determine whether you can use your trust assets as collateral if you are not already the trustee. The trustee(s) should have sole discretion on how the assets are to be used if there are no explicit instructions against such actions made by the originator of the trust.

4

Collect all paperwork and evidence of ownership of the property to present to the lender when negotiating your loan. Have property transferred to your name if it was not already done so within the trust.

5

Set up an appointment with your bank or lender to negotiate terms of the secured loan.