Inheritance funding is a cash advance method available to heirs entitled to assets held in probate. The probate process can suspend distribution of inheritance for months or even years. As long as the decedent executed a Will and family members are in agreement, probate generally takes six to nine months. During this time, all assets are frozen with the exception of a bank account setup to manage outstanding bills and financial obligations.
In order to obtain inheritance funding, heirs must work with either an inheritance funding company or private investor. In the past, some banks and lending institutions provided cash for inheritance loans. With today's credit crisis, few, if any traditional lending sources offer this service.
It is important to work with a reputable inheritance funding source. When obtaining a cash advance, heirs must assign their inheritance rights to the funding source. Inheritance funding is not a loan. The recipient has no obligation to repay the cash advance once he assigns his rights to the funding source. Instead, the estate repays the advance once probate settles.
Funding sources take on considerable risk when providing inheritance funding. Not only must they wait for the probate process to be completed, they also run the risk of the estate being unable to repay the advance.
The process to obtain inheritance funding varies. Reputable funding sources require a current credit report and verifiable proof regarding the estate. Credit reports are required to ensure the recipient does not have outstanding liens, judgments, child support or bankruptcy proceedings which could interfere with repayment of the advance.
Inheritance funding is usually limited to heirs entitled to assets valued at $15,000 or more. The funding source charges a fee, which is deducted from the cash advance distribution. This fee can range from 10- to 40- percent of the total cash advance. Be certain to check with multiple inheritance funding sources to obtain the best deal.
Before signing a contract with any funding source, engage in due diligence to thoroughly investigate the individual or organization. Utilize the power of the Internet to conduct research. Check with the Better Business Bureau and your state's Secretary of State web site to ensure the funding source is in good standing. Consult with a probate attorney to ensure contracts are legally binding and will stand up in court if necessary.
Once credit checks and estate validation occur, inheritance funding usually takes two to three weeks to complete.
Published on November 26, 2008 at 02:35 AM