When someone dies, their estate transfers ownership to heirs named in their will or legal documentation. Even when everything is clearly spelled out, this process can take months, sometimes even years to settle. Until probate is completely settled, heirs cannot access their new assets.
As a result, heir loans and cash advances are available to help beneficiaries make it through the probate process while they wait to access their funds. Find out how it all works and get questions answered here.
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What is an Heir Loan?
An heir loan, also known as a probate loan, can help you access your funds while you wait. Heir loans are a sum of money a lender lets you borrow while your estate is in probate. These are generally interest-bearing loans that require monthly payments until the estate settles.
Different lenders and inheritance advance companies may have different rules about what it takes to qualify. It’s important to understand that heir loans are the same as probate loans, inheritance loans and estate loans but different from inheritance cash advances or probate advances because an advance can be made without an impact on your credit history or typical underwriting requirements used by banks, whereas loans require all of the necessary steps of a conventional loan. If you are wanting to obtain an advance on a probated estate then typically, all that’s required is that you’re a beneficiary or a personal representative of an estate and your expected inheritance is at least a certain amount.
Don't Wait for Probate
Timeline For Heir Loans
Once a person dies, the estate must go through the probate process. This is a legal process in the United States and Canada. The executor, if not chosen by the will, is appointed by the court to handle all matters associated with the estate. Everything must be approved in court before any inherited property can be transferred.
There’s more work than meets the eye. It’s not as simple as having a judge review the will and approve it. In addition to filing the necessary paperwork with the probate court, the executor or administrator must also get appraisals on any real property. They must file and pay any taxes owed before heirs can receive their portion.
Many times at this point in the probate process, a beneficiary will want to receive their money but it still could be years until probate finishes and they receive a distribution of assets so an heir loan is obtained.
An heir loan typically lasts for the duration of probate until the heir receives money from the estate and pays back the loan.
Will delays in probate affect heir loans?
There’s potential for all sorts of delays in probate since it’s a fairly complicated process. If probate is delayed, the heir loan will continue to accrue interest which must be paid monthly until the loan is paid back. If the estate includes a business, even when things run smoothly, it may still take months. If there are questions of ownership, people step forward to contest the will, or there is no will, it can take time to sort our rightful heirs. Creditors can also cause delays. When there’s a delay, it can take years to settle. For this reason many heirs look for different ways to receive inheritance money early.
Heir Loan Rates
Heir loans are categorized as high risk and thus will have an interest rate similar to a credit card which will continue to compound as long as the loan is not repaid. Heir loan rates will vary based on credit score and other determining factors which is different from a probate advance where the amount is determined upfront and does not include any monthly interest payments. For this reason, Inheritance Advanced provides heir advances instead of loans since it is much easier to calculate.
Is an Heir Loan the Same as an Inheritance Cash Advance?
Though you may hear the two terms used interchangeably, heir loans and heir cash advances are two different things. With an inheritance cash advance, you receive a portion of your inheritance money before it is settled in probate court. This is is also sometimes called a probate advance.
With an inheritance advance, you do not have to pay interest, make monthly payments, or provide any kind of collateral. When the estate settles, the inheritance cash advance company receives its funds. If for any reason the estate is settled for less than what was originally expected and there’s not enough money in the estate to pay for the advance, the borrower isn’t personally liable.
Reasons Heir Loans Exist
During probate heirs cannot access any of the funds or assets that are part of the estate. Even if they only inherit a portion of the estate, the probate process must conclude and it is rare for a judge to order an early distribution of probate assets. Since probate can take a long time and heirs cannot access their inheritance before probate is finished, many heirs will look to receive their inheritance early by way of a probate loan.
At Inheritance Advanced, we can help you get your inheritance money fast. There are no hidden costs, credit checks, or restrictions on how you can use the money. You can receive a deposit in your bank account in as little as 24 hours. It starts with a free consultation. After a document review, you’ll receive money. It’s an easy process that gives you access to your money in a fraction of the time it takes to handle the probate court proceeding.