How to Borrow Money Against a Shared Inheritance
An heir may have to wait months and even years to receive distributions from his estate. This is due to the length of the legal process involved. So an heir can, through cash advances or loans, receive funds in a matter of days. It has no effect on the other heirs of the estate. The cash advance company gives up a portion of the equity in exchange for the loan. This is how you can get an advance on the estate from him.
• You must first determine whether or not you qualify for an estate cash advance. Heirs normally only receive advances on probate assets. Probate assets are bank accounts, insurance policies, real estate, business interests, and other assets that were only owned by the deceased. Non-probate assets include trusts, retirement accounts, or any account held jointly with another person.
• You must first determine how much money you want to borrow from your shared inheritance. The typical range for estate loans and advances is $5,000 to $250,000. Select a loan amount that is less than the estate you expect. Some lenders limit the loan amount to a certain percentage of your total expected inheritance.
• Contact a company that specializes in estate advances. The heirs can only borrow money from their estate after the probate process begins by the heirs. Don’t forget to ask the estate company that for an estate advance what fees they will charge. The rates vary depending on the companies. Fees generally depend on the amount of the advance, the complexity of the estate, and the amount of time until the estate closes.
• A cash advance has to be arranged by you from the lender. Funds can usually be distributed by down payment and loan companies within days of the transaction. If there are not enough funds to repay the loan, ask the company about its consequences. The heir generally has no personal liability for insufficient estate funds because the heir is assigned an interest in the business.
• Pay the estate cash advance company back as soon as possible. When the estate closes, the executor automatically pays the money to the estate’s cash advance companies as part of the transaction. However, some companies offer discounts and rebates to heirs who pay off the loan early.
