An inheritance advance is an advance of a sum of money in anticipation of an inheritance. This can take the form of a loan or a reassignment of inheritance, where a financial institution essentially buys the inheritance from the heir. In cases where probate is taking a long time and people need access to funds they know they will be receiving from the estate, this can be an option for covering expenses until the estate clears probate.
It is important to distinguish between loans and reassignments. In the case of a loan, people will be expected to repay the advance, sometimes at a high rate of interest. Loan paperwork should be carefully reviewed to determine when payments are due and to check on the interest rate. This option can come through very quickly, but can also be very costly. With a reassignment, the heir signs over her interest or a partial interest in the inheritance to a third party, and funds are provided in return.
In both cases, people will need to file an application. The inheritance advance application will document the amount of inheritance expected and information about where the estate is in the probate process, and can include questions designed to assess creditworthiness and other topics. Processing can take a week or more as the application is reviewed and a decision is made about the amount of money to be paid out. Once the inheritance advance application is approved, a check can be written or funds can be transferred directly into a bank account.
Probate can drag on with complicated estates and estates where there are disputes about the inheritance. People anxiously awaiting their inheritance or counting on it to cover expenses should consult the executor or an attorney to get more information about how long probate will take. If the time frame is too long, an attorney may have information about inheritance advance options in the area and can provide advice on which service to use on the basis of prior experience with other clients.
One thing to be aware of with inheritance advance is the risks assumed by accepting the money in advance. Lenders expect repayment within a certain time whether or not probate is completed and people could jeopardize their credit scores or run into other problems by taking an advance on an anticipated inheritance. Seeking advice from a financial consultant and an attorney is recommended for assistance on making the best decision in a given situation.