Advance inheritance is a term used by cash lenders and private investors who provide funds to beneficiaries of an estate held in probate. When a person dies, all of their possessions are transferred to probate. Depending on the complexity and circumstances of the estate, the probate process can last between six months and three years.
Obtaining advance inheritance is similar to applying for a loan. However, no interest in charged on the advance and there is no note to repay. Instead, the cash advance is repaid through the estate when probate settles.
Funding sources typically provide inheritance cash advances to heirs entitled to $15,000 or more. However, some cash advance providers will work with beneficiaries whose inheritance is as small as $2500. Beneficiaries of small estates generally have better success in obtaining a cash advance through private investors who specialize in probate estates.
When seeking advance inheritance funding, beneficiaries are required to provide personal information and details of the estate. Funding companies usually require a copy of the decedent's Last Will and Testament, Petition for Probate, Inventory and Appraisement statement, Death Certificate, and Listing Agreement or Sales Contract for real estate holdings.
A credit report will be obtained for heirs requesting a cash advance for inheritance. If the applicant has outstanding judgments, creditor liens, child support or bankruptcy proceedings, advance inheritance will typically be denied.
After all documents have been verified by the funding source, advance inheritance distributions generally occur within 3 to 5 business days. This timeframe can vary depending on the advance amount and policies of the funding source.
Funding sources assume significant risk when providing advance inheritance. First, there is the potential of insufficient funds remaining in the estate to repay the advance. When this occurs, the funding source must absorb the loss because the beneficiary is not responsible for repayment of the advance. Second, funding sources must wait until the estate settles to receive their distribution.
Inheritance cash advances typically range from $10,000 to $100,000. As a general rule, advance inheritance cannot exceed 30-percent of the heir's anticipated distribution. When beneficiaries receive a cash advance they must assign their inheritance rights to the lending source in exchange for the upfront cash payment. Additionally, a fee is charged and deducted from the advance.
Careful consideration should be given to obtaining advance inheritance funding. While it might be tempting to obtain cash upfront instead of waiting for probate to settle, it is important to understand the pros and cons of this type of transaction.
Last, but not least, it is crucial to engage in due diligence when selecting a funding source. Be certain to check with the Better Business Bureau to ensure the company or private investor you are working with is in good standing. Additionally, conduct research online to check for complaints or legal issues.
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