Creative owner financing

[Mark Mynhier]

A partner and I are working on a deal and have a question about creatively financing an owner financing. The gentleman is 87, but is in no way impaired, and is willing to do owner financing on the property. One possible pitch to him is that instead of his children inheriting the financing (and the death taxes on everything) that we put the house into a trust, which would do the owner financing with the children having rights of survivorship so that there aren't the death taxes on the property and/or income. Other than having an attorney write up the paperwork, are there any issues with this or has anyone done something like this before? I know with a lot of the elderly, the taxes on their estate is a big concern and we think that by presenting the deal to him this way he will be much more agreeable to the terms.

Any suggestions or warnings?

[Ellis San Jose]

I'm not sure I quite follow.  I would want to run this by a C.P.A.  

The trust avoids probate not estate nor income taxes. There would be a stepped up basis for the beneficiaries if transferred upon death.