A probate loan is not actually a loan. Instead, it is a cash advance provided to estate beneficiaries entitled to property held in the probate court system. Obtaining inheritance loans involves following certain protocol, submitting legal documents, and assigning inheritance rights to the funding source.
Probate loan providers assume substantial risk when accepting inheritance property as collateral for cash advances. Inheritance loans are repaid by the estate. It is not uncommon for estate administrators to sell probated assets to pay outstanding debts. Some estate planning experts claim less than 20-percent of heirs receive inheritance property held in probate.
Probate advances are typically the last debt to be paid. If the estate does not have financial resources to repay inheritance cash advances, the funding source has no legal recourse. The exception is if the advance cash lender can prove the heir provided false information.
The probate process is notorious for extending several months. Funding sources assess the risk factors associated with the estate. Heirs are required to submit information about their inheritance, along with various financial documents.
Applicants should be prepared to provide a copy of the death certificate and contact information of the probate personal representative. Funding sources verify inheritance assets and typically require date-of-death values or property appraisals.
Most probate lenders require a current credit report to determine if outstanding judgments, creditor or tax liens, child support obligations or bankruptcy filings exist. These financial obligations take precedence over probate advances and could interfere with repayment to the funding source.
Once credentials and financial records are verified, the funding source presents an offer. Heirs do not receive full face value for inheritance property. Instead, probate loan providers charge a fee which is deducted from the heir advance. Estate loan fees can be as high as 40-percent of appraised value. Once heirs accept the offer, cash for inheritance funds are distributed within 10 to 15 business days.
Primary probate loan funding sources include private investors and cash advance companies. It is imperative to conduct due diligence and thoroughly research funding source credentials. When necessary consult with a probate attorney to ensure inheritance advance contracts are legally binding and both parties protected.
We invite you to learn more about estate loans in our probate article library. We offer hundreds of informative articles on a wide range of topics including probate, estate planning, inheritance, and personal money management.
As a real estate investor and probate liquidator, I offer cash for inheritance advances for qualifying assets. I am especially interested in probate real estate located in Washington, Arizona, Nevada and Southern California.
Published on February 05, 2010 at 02:50 AM