Trusts, Age, and Equity: What Asset Depletion Borrowers Get Wrong
A lot of asset depletion financing stops at “here’s the list of eligible assets.” The clients I work with rarely have a problem reading a list. Their questions start where the list ends: whose name is actually on this money, how old do I have to be before it counts in full, and does paper wealth I haven’t received yet count for anything at all. Here are the three questions that come up most.
Question OneMy money is in a trust. Does that count, and does it matter what kind of trust it is?
This is one of the most misunderstood corners of asset depletion lending, partly because people use the words “family trust,” “living trust,” and “irrevocable trust” as if they’re interchangeable. They aren’t, and the distinction is exactly what an underwriter looks at first.
“Family trust” isn’t a legal category on its own. It’s a common name people give to whichever trust structure, revocable or irrevocable, holds assets meant to pass through a family. The label on the document tells you nothing about which of the two categories above it actually is. That’s why I ask for the trust agreement itself on every file, not just a trust certificate, because the certificate usually confirms the trust exists without telling you whether it’s revocable or irrevocable, or who actually controls the money today.
| Trust type | Who controls the assets | Lender treatment |
|---|---|---|
| Revocable living trust, borrower is grantor and trustee | The borrower, directly | Generally counted at full value & treated much like a personally held account |
| Irrevocable trust, borrower is sole beneficiary with documented distribution rights | An independent or family trustee per fixed trust terms | Sometimes eligible, only with full trust document review confirming access and consistent distribution history |
| Irrevocable trust, borrower is one of several beneficiaries with no direct access | Trustee, shared among beneficiaries | Typically excluded outright by most lenders |
Question TwoI’m 54 with most of my wealth in retirement accounts. Does my age really change how much of it counts?
Yes, and the gap is larger than most clients expect. The industry-standard dividing line sits at 59½, the age at which retirement withdrawals stop triggering the early withdrawal penalty. Below that age, lenders assume a real cost to accessing the money and discount it accordingly. Above it, more of the balance is treated as usable.
Where it gets confusing is that programs don’t all draw the line the same way. Some count vested retirement assets at 50% of value below 59½, others at 60% or 70%, and the treatment above that age varies too, sometimes 80%, sometimes closer to full value. Two lenders looking at the identical account balance can hand a 54-year-old client two meaningfully different qualifying numbers.
Age 54
Illustrative client portfolio, before any age-based discount
$1.30M · 54%
$720K · 30%
$280K · 12%
$100K · 4%
Now apply the age-based discount to that same portfolio under two different lender guidelines, one using a 50% haircut on retirement assets below 59½, the other using 70%:
| Asset | Market value | Program A (50% under 59½) | Program B (70% under 59½) |
|---|---|---|---|
| 401(k) & traditional IRA | $1,300,000 | $650,000 | $910,000 |
| Taxable brokerage | $720,000 | $504,000 | $504,000 |
| Cash & money market | $280,000 | $280,000 | $280,000 |
| Other liquid holdings | $100,000 | $100,000 | $100,000 |
| Total qualifying assets | $2,400,000 | $1,534,000 | $1,794,000 |
That’s a $606K or $866K swing in qualifying assets on the identical portfolio, purely from which lender’s age-based table applies. For a client this age with wealth this concentrated in retirement accounts, comparing that one guideline across two or three non-QM programs before choosing a lender can matter more than comparing their interest rates.
Note: A few of our wholesale lenders will allow the taxable brokerage account and IRA values to be counted at 100%.
Question ThreeI have significant unvested stock options and RSUs. Does any of that help me qualify?
Almost always, no, and this is worth saying plainly because it’s the assumption I have to correct most often with executive and founder clients. Unvested options and unvested restricted stock units represent value you don’t yet control. You can’t sell them, borrow against them, or walk away with them if you leave the company tomorrow, and lenders treat them accordingly: as not yet real for qualification purposes.
| Holding | Stated value | Vesting status | Typically counted? |
|---|---|---|---|
| Vested company stock, held in a personal brokerage account | $540,000 | Fully vested, freely tradable | Yes, subject to standard brokerage-asset haircut |
| Vested stock options, exercised and held | $310,000 | Vested and exercised | Generally yes, once exercised and held as shares |
| Unvested RSUs, scheduled to vest over the next three years | $860,000 | Unvested | No |
| Unvested stock options | $275,000 | Unvested | No |
In this example, a client with roughly $2 million in total equity compensation on paper would only bring about $850,000 of it into the qualifying asset calculation, before any further haircut on the brokerage holdings. That’s a wide gap between how a client’s net worth statement looks and what a lender will actually count, and it’s exactly the kind of surprise I’d rather walk a client through in the first conversation than have them discover mid-underwriting.
The common thread across trusts, age, and vesting: the question is never really “how much am I worth.” It’s “how much of what I’m worth can this program actually verify and treat as accessible.” Those two numbers are often very different, and the gap is usually where deals slow down or fall apart if nobody addresses it early.
William Cook is a Non-QM asset-based lending specialist working with trust beneficiaries, executives, and high-net-worth borrowers on asset depletion and asset utilization financing. This article reflects general program structures common in the non-QM market; specific trust documentation standards, age-based discount schedules, and equity vesting treatment vary by lender and program.
This article is for general educational purposes only and does not constitute a loan offer, a commitment to lend, pre-qualification, or pre-approval. It is not an advertisement for specific credit terms under Regulation Z (Truth in Lending Act) or any state equivalent.
All dollar amounts, portfolio compositions, ages, discount percentages, and program comparisons (“Program A,” “Program B”) shown in this article are hypothetical and illustrative only. They are constructed solely to demonstrate how common industry mechanics interact and do not represent an actual client file, an actual lender’s guidelines, a rate quote, or a guarantee of loan approval, asset treatment, or terms. Actual eligible assets, discount percentages (“haircuts”), age thresholds, trust documentation requirements, and qualifying formulas vary by lender, program, loan amount, state, and are subject to change without notice. Contact us directly for current program guidelines and to determine your specific eligibility.
Nothing in this article should be relied upon as legal, tax, estate planning, or investment advice. Trust structures, retirement account withdrawals, and equity compensation carry legal and tax consequences specific to each individual’s circumstances and state of residence. Consult a licensed attorney, CPA, and/or financial advisor before making any decision involving a trust, retirement account, equity compensation, or financing arrangement.
Omni Fund, Inc. is an Equal Housing Lender. All loans are subject to credit approval, underwriting guidelines, and program availability. Not all applicants will qualify. This is not an offer to enter into an agreement, and not all products are available in all states.