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By Simon Volkov
Advance inheritance is one option available to beneficiaries entitled to assets held in probate. When a person dies everything they own is transferred to probate unless inheritance assets were placed in a trust. Probate is the legal process used to validate decedent wills or determine rightful heirs when no will exists.
Beneficiaries sometimes turn to advance inheritance when probate is expected to extend for a prolonged period. Obtaining a cash advance for inheritance is similar to applying for a loan. Borrowers must submit a copy of the decedent’s last will and undergo a credit check to determine if outstanding liens or judgments will interfere with repayment of the inheritance advance.
Inheritance advances are not actually loans, although the advance must be repaid once probate settles. Cash advances are repaid by the estate, not the heir who received the advance. If the estate is financially incapable of repaying the inheritance advance, the lending company cannot persue heirs for repayment.
Funding sources for advance inheritance typically include private investors, investment groups and cash advance companies. Inheritance advances are typically reserved for beneficiaries entitled to $15,000 or more. However, some funding sources will work with heirs entitled to as little as $5000. Much depends on the type of inheritance property used as collateral to secure the advance.
Once heirs locate an advance inheritance funding source they must provide details of the estate, along with personal finance information. Funding sources generally require a copy of the decedent’s last will and testament, death certificate, petition for probate, inventory appraisement statement, and listing agreement or sales contract for real estate holdings.
Funding sources require a current credit report to determine if applicants have outstanding judgments, creditor or tax liens, bankruptcy proceedings, or outstanding child or spousal support as these can interfere with repayment of advance inheritance financing.
Once the funding source verifies financial records and agrees to enter into contract, advance inheritance distributions usually occur within three to five business days. The timeframe will vary depending on the advance amount and policies of the funding source.
Inheritance advance providers assume substantial risk when providing cash in exchange for inheritance property. If the estate is unable to repay the advance the funding source must absorb the loss because beneficiaries are not responsible for repayment. Secondly, funding sources must wait until probate settles before restitution is made.
Inheritance cash advances can range from $10,000 to $100,000 or more. As a general rule, advanced funds are limited to 30-percent of the heir’s anticipated distribution. When heirs receive cash advances they must assign inheritance rights to the funding source in exchange for upfront cash payments. Funding sources also charge a fee which is deducted from the advance.
Estate beneficiaries should give careful consideration to entering into advance inheritance contracts. While it can be tempting to obtain upfront cash payment while waiting for probate to settle, it is important to understand the advantages and disadvantages of this type of financial agreement. It is best to consult with a probate attorney to determine if cash advance is the best option.
Additionally, it is crucial to conduct due diligence when selecting a funding source. Check with the Better Business Bureau and conduct online research to read reviews or complaints. When possible, obtain funding source referrals from friends, family or co-workers.
About the Author: California real estate investor, Simon Volkov and his team of private investors offer
advance inheritance
financing to beneficiaries of probate estates. His website provides a comprehensive probate article library to help individuals understand the importance of estate planning and offers strategies to avoid probate. Learn more by visiting
SimonVolkov.com today. Source: isnare.com
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