How to Prove Inheritance for a Loan
If you’re waiting on an inheritance from a deceased family member, you may be anxious to receive the inheritance money. You might be struggling to make ends meet or have unexpected expenses. Probate can take months or even years, which may have you thinking about a loan to carry you through until the estate is distributed.
An Overview of the Probate Process
Before discussing the loan options available to you and what you need to do to qualify, you should understand the basics about the probate process. Probate is a legal process where the court ensures that the directions of the will are followed and all creditors are paid.
The probate court will appoint an executor or personal representative to oversee the estate. This person will take inventory of the estate and notify creditors. They are also responsible for paying these creditors, filing and paying any taxes, and transferring the title of any non-liquid assets to the new owner. The executor or personal representative also distributes the remaining assets to the beneficiaries and petitions for probate to be closed.
While this process may seem simple, it can take several months or even a year with no delays. If there are any delays or problems, probate may continue for years. Someone may contest the will or the executor could dispute a claim made against the estate. The court rules in these disputes, which adds to the timeline.
How You Can Get a Probate Loan
If you’re waiting on an inheritance, you can get a loan that will allow you to receive your inheritance early. This type of loan is called a probate loan, inheritance loan, or estate loan.
You may need the loan to pay your bills or other outstanding debts, legal fees, funeral costs, mortgage payment, or even pay an inheritance tax or provide for living expenses. Perhaps you want to buy out your siblings for the family home or other real estate property. You will find it difficult to get a traditional loan for property that isn’t in your name yet.
A probate loan can help you get the funds you need to buy out your siblings or other family members. Once the title has been transferred to you, it will be easier to get a regular mortgage and pay off the probate loan.
Most banks and credit unions won’t provide an inheritance loan. The risk is too great when the inheritance isn’t guaranteed. Instead, you will need to find a hard money lender who will offer a portion of the loan at a specific interest rate.
The Process of Getting an Inheritance Loan
Getting approved for one of the estate loans available is similar to getting car loans or personal loans. You must go through a process to get approved and provide requested documentation. They may look at your credit report, but approval is based more on your expected inheritance than your personal credit.
You will need to find one of these probate loan companies online and fill out an application. They will ask for information about you and your inheritance. They will also talk to the probate attorney or executor to determine when the estate will be distributed.
Once they have the needed information, the probate lender will make you an offer. If you agree to the terms and sign the documents, the lender will fund the money into your bank account within a couple of days.
What You Will Need to Provide the Inheritance Loan Company
When applying for an estate loan with an inheritance funding company, you will be asked to provide certain information. You will need to fill out an application for the probate loan. You will be asked to provide personal information and employment history.
The lending company will also ask for information about the inheritance. They will need to talk to the executor or probate attorney to get details about the estate and how much you will be receiving.
Considerations Before Applying for Inheritance Loans
You should speak with an estate attorney before you apply for any inheritance loans. Depending on the state or the wording of the will, you may not be allowed to assign your inheritance to a lender.
Another consideration is how much your inheritance is worth. Some inheritance funding companies have a minimum requirement to approve a loan request. They set minimum amounts to make it worth their effort and won’t consider a modest inheritance.
Talk to the Estate Attorney
You should schedule an appointment with the estate attorney or executor before taking the next step to get an inheritance loan. Since they will provide information to the lender, they need to know you are planning to apply.
The attorney or executor can provide you with information about how much you will be getting in your inheritance and an estimate of how long it will take. When you have this information in hand, it allows you to make an informed decision.
If it’s only going to be a few months before you receive your inheritance, it may be worth waiting. If the executor tells you it will likely be much longer, you may decide that taking a portion of your inheritance now is better than waiting. Of course, the executor can only provide an estimate of time because other issues may arise to complicate the process at any time.
If you choose to get a probate loan, you will need to let the administrator of the estate know. They will assign that portion to the correct allotment. The lender goes to the end of the line, so to speak. They are paid after all other creditors and heirs receive their portion of the estate.
How the Inheritance Funding Company Will Prove the Inheritance
The inheritance funding company will request documentation to prove that you are entitled to an inheritance. The exact documents will vary by lender, but you can be prepared and have everything on hand before applying. If you can provide the requested documentation quickly, it will help the process move faster and you can get your inheritance funds sooner.
Here are some legal documents the lender may ask for:
- The official death certificate for the decedent
- A copy of the will
- Documents from probate court or any letters you have received
- Documents that show who has been appointed the executor of the estate
- Certification of the amount of your inheritance from the executor
- Your personal identification, such as a driver’s license
With these documents on hand, you can apply for an inheritance loan or inheritance cash advance.
Understand the Terms of Inheritance Loans
When applying for an inheritance advance or inheritance loans, you need to understand the difference and how it can affect you. Many people use the terms inheritance advance and inheritance loan interchangeably, but they usually mean one or the other.
With an inheritance loan, you are generally responsible for paying the amount back with interest regardless of what happens to your inheritance. If unexpected expenses come up during probate and there isn’t any money left for the heirs, you must still pay the inheritance loan.
With an inheritance advance, the inheritance funding company purchases your inheritance for a fee. The risk is on them. If those same unexpected expenses come up and you don’t get an inheritance, the lender takes the loss. They can’t hold you responsible for paying the money back. This is an important distinction to protect you in the future.
Are You Considering an Inheritance Loan?
If you’re thinking about getting an inheritance loan or probate advance, you need to do your research. Take the time to compare multiple lenders and ensure you are working with a reputable company. Many scams exist to prey on beneficiaries, and you want to avoid those situations.
Another thing to keep in mind is that not all inheritance funding companies are the same. Inheritance advances offer different rates, fees, and terms. They also have various limits on how much you can borrow with an inheritance cash advance or inheritance loans.
You should take the time to review the information and ensure the company you choose offers what you need with terms you can be happy with. It’s a good idea to talk to your attorney who can provide legal advice about inheritance advances.
Make sure you understand the terms of any agreement before you sign. Don’t be afraid to ask questions to ensure you know what to expect. ProbateAdvance.com is proud to offer transparent terms and customer service to help you decide if an inheritance advance is right for you.