Simply explained, the PACTrust is a unique means of acquiring (or selling) the benefits of real estate ownership without the necessity of new financing or standard down payment requirements.

The PACTrust system allows an owner (a would-be seller) to place his/her property into a special revocable trust and sell a portion of the trust’s beneficial interest to another party (a buyer), rather than involving the title interest in the real estate itself. Upon one’s acquiring a beneficial interest in a trust, which holds the property’s title, and agreeing to accept the burden, risk and cost of ownership, a buyer is afforded the same use, occupancy, possessory interest and profit potential…as well as the full income tax deduction as would be any homeowner.

Because an assignment of beneficial interest in a trust, in effect, involves an assignment of personal property, rather than real estate; conveyance (of all the benefits of home-ownership) is actually accomplished without jeopardizing the property’s legal and equitable title — and without a violation of the mortgage lender’s due-on-sale provisions.

The benefits to be enjoyed by a buyer in a PACTrust are literally identical to what any real estate purchase might afford; though without the necessity of a new loan, or bank qualifying, and with no more down-payment than the seller might require (if any). Through this, a seller who would be amenable to leaving his/her existing mortgage loan in his/her own name, can legitimately allow someone else to assume the loan’s cost and tax benefits, and be relieved of payments (mortgage, property tax, and insurance payments): without having to resort to legally volatile “creative financing” techniques to do so. As well, the responsibility for the property’s upkeep and management become the resident beneficiary’s. The PACTrust is a welcome reprieve for any overburdened seller, in that through its use, one needn’t create taxable “debt-relief,” damage his/her credit, or be forced to walk away empty-handed from a property that may no longer be a viable asset.

Should an alternative under current consideration to be, say, renting or leasing the property out (especially in the face of negative cash-flow, vacancy potential, maintenance, and management costs); then one might be well advised to seriously consider the PACTrust as a means of eliminating all those concerns. A PACTrust buyer will gladly accept all those costs and responsibility in exchange for tax write-off, and all the other benefits of homeownership.