Probate loan refers to obtaining a cash advance in exchange for inheritance property held in probate. In actuality, there is no such thing as a probate loan. When funding sources provide cash advances to beneficiaries, the advance is repaid through the estate.
If the estate is unable to repay the probate loan, the funding source cannot take legal action against the recipient unless it can be proven false information was provided. In addition to the risk of non-repayment, the funding source must wait until probate settles before receiving compensation.
Funding sources that provide probate loans include cash advance companies and private real estate investors. When probate money is provided, the funding source charges a fee which is deducted from the distribution check. This fee can range from 10- to 40-percent of the value of inheritance property.
Before beneficiaries can obtain probate cash, they must provide the funding source with information about their inheritance. Typically, investors require an original copy of the decedent's death certificate, along with a copy of the Last Will and Testament. Estate information will be validated through the probate courts.
The funding source will require a current credit report to determine if outstanding liens, judgments, bankruptcy filings or child support obligations exist. These types of financial obligations generally prohibit heirs from obtaining probate loans because they take priority of repayment.
Upon verification of credit history and inheritance assets, the funding source provides cash for inheritance within 10 to 15 business days.
If the estate is small and probate can be settled within a matter of months, you might be better off waiting. However, if the estate is being contested by an heir apparent and could potentially be suspended long term, probate loans might be a smart choice.
Before signing probate loan contracts, it is wise to consult with a probate attorney. Doing so will ensure all documents are legally binding and both parties are protected.
If you are entitled to probate inheritance and need of cash, contact Simon Volkov by phone or email. Simon specializes in probate loans and helping individuals liquidate probate real estate.
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