Editor's choice: Inheritance Funding probate advances
- Rebates available
- No fees for probate delays
- Bad credit OK
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Probate, or the legal process of organizing and distributing assets after someone dies, can take months or even years to get through. Inheritance funding can help you access those funds before the probate court process is over. But this type of financing is designed for emergencies. While you'll have access to your funds more quickly, you could end up paying as much as 40% of your inheritance in fees.
Inheritance funding is a type of short-term financing that gives you access to the value of the funds or assets you’ve inherited before the decedent's probate case is closed. Inheritance loans, inheritance advances, estate loans and probate advances are the most common ways that companies refer to inheritance funding, and the terms are often used interchangeably.
There are really two types of inheritance funding:
Neither consider your credit score when you apply, and you can’t find these options with a traditional lender.
Also called probate advances or inheritance cash advances, these are the most common type of inheritance financing. You often transfer your right to your inheritance in exchange for a fee, rather than interest — though in some cases, interest factors in as well.
Because you’re not actually taking out a loan, you don’t need to worry about repayments or needing strong credit to qualify.
Sometimes called inheritance loans or probate loans, estate loans allow you to borrow against real estate assets that you don’t yet have access to. You receive your funds and repay it plus interest and fees, with your estate considered collateral for the loan.
However, not all “estate loans” work this way — sometimes lenders use this term to refer to an advance. Make sure you understand how your lender works before applying.
Find an inheritance funding company by comparing by APR, minimum credit score and loan amount. Select the Go to site button for more information about a particular lender.
There are several legitimate reasons for wanting to get an advance or loan backed by your inheritance:
Chances are, you’re going through an emotionally tough time. Consult with experts, friends and family to make sure you’re making the right decision for your situation.
The most common way to get inheritance financing is through an inheritance advance company. These companies buy your inheritance directly from you in exchange for a fee.
They don’t consider your credit history when you apply, and you can get inheritance upfront, within a few days of applying. But these companies can be expensive, charging fees equivalent to those you’ll find with a high-interest loan
Hard money lenders are short-term lenders provide loans backed by property. Like inheritance advance companies, hard money lenders don’t consider your credit score.
This option, too, can be expensive, with APRs often higher than other subprime loans. If you’re unable to repay your loan, your lender seizes your estate assets and sells it.
Applying for inheritance financing is more involved than other types of loans. There’s a lot you need to do before you can even start looking at lenders. Typically, you’ll follow these steps:
Inheritances and trusts are complicated, often requiring a law degree to fully understand. Talk to a lawyer specializing in these cases to make sure that you’re legally allowed to transfer your inheritance or take out funding against it.
Tax laws surrounding inheritance are difficult to understand. Make sure the type of inheritance financing you’re looking for is financially worth it.
Many lenders require that you stand to inherit at least $15,000 to qualify for an advance or estate loan. Make sure your inheritance meets eligibility requirements.
In charge of overseeing the execution of a will, an executor is assigned their position in the will, while an administrator is assigned by court. Inform this person before you apply so that they can take steps to prepare for your advance or loan.
Inheritance financing tends to require more documentation than usual, some of which you might need to get from your loan’s administrator or executor. Build in time to gather this info.
Look at factors like fees, interest rates and loan terms. Also read reviews on sites like the Better Business Bureau (BBB) or Trustpilot to get a sense of what the typical experience is like with this lender.
Once you've narrowed it down, try scheduling a free consultation or prequalifying to get a better idea of what lenders can offer. Make sure you apply for a loan that fits your needs — do you want an advance on your inheritance, or do you simply want to borrow against it?
If you’re applying online, these applications won’t take more than a few minutes. Each lender will have a different set of questions and document requirements. Reach ahead of time to learn what to expect.
Look for any hidden fees or other unfavorable terms before signing your advance or loan documents. Don’t be afraid to ask questions if you’re unsure of anything.
You’ll typically receive your funds within a few days of submitting your advance or loan documents. Most banks directly deposit it into your account.
Typically lenders ask for:
What happens next depends on the type of financing you got.
If you got an inheritance advance, there’s little else you need to do if the rights to the inheritance have already been transferred over.
With an estate loan, however, you make monthly repayments until your loan’s principal and interest are paid off. Keep an eye on your loan’s balance and try not to miss any repayments — these loans tend to come with high interest rates that can add up quickly.
Inheritances involve two types of taxes: estate tax and inheritance tax. Estate tax is paid from the estate of the deceased before you get your funds. Inheritance tax is what you pay after you receive your inheritance.
Only a few states charge inheritance tax, including Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. This tax can range from 1% to 18% of your inheritance’s worth in 2022, depending on how much you receive and your state’s laws. Often close relatives like spouses and dependents are exempt from paying an inheritance tax.
Make sure you’re aware of your state’s inheritance tax laws before applying for inheritance financing to know just how much you’re eligible to receive.
Depending on your needs, you might find alternatives that are a lot less expensive than inheritance financing.
Getting an unexpected sum of money or asset might make you feel as if you’ve won the lottery. But if you act wisely, you might be able to turn your inheritance into income and savings that can benefit you for years to come.
Inheritance financing is an expensive option worth treating as a last resort. Before you apply for an inheritance loan, make sure you understand your legal obligations and what your assets are really worth — after taxes.
You might want to look into other financing options like personal loans to find the best choice for your circumstances.
Can you inherit a house with a mortgage?
Yes. If you’re a relative you can assume the mortgage, though you’re required to continue making payments. It can get legally tricky, however — especially if you’re not a relative. It’s a good idea to consult a lawyer if you find yourself in this situation.
What rates can I expect on an inheritance advance?
You can typically expect to pay a fee of anywhere between 10% and 40% of your inheritance value when you get an inheritance advance.
Can I get inheritance financing if I’m heir to a foreign estate?
In most cases, no. You might also have trouble getting financing if you reside in a different US state, though it’s not nearly as common a roadblock.
How long does it take to get my inheritance?
The most straightforward probate processes can take as long as six to nine months. It could extend to several years, however, if you run into any bumps along the way.
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