Inheritance cash programs provide funds to heirs entitled to inheritance held in probate. Probate is the legal process used to validate a decedent’s Last Will and Testament and ensure assets are distributed according to probate law.
Inheritance cash advances are not loans. Instead, they are cash advances which are repaid to the funding source when probate settles. The probate process can take several months or even years to settle. Instead of waiting for inheritance proceeds to be distributed, entitled heirs can sell a portion of their pending assets in exchange for a lump sum cash payment.
Beneficiaries can use inheritance cash advances to pay off financial obligations or personal debts. Funds can be used for personal expenses including vacations, investment opportunities, or college tuition.
Before obtaining inheritance cash advances it is important to realize the lending source generally charges an upfront fee. Additionally, cash for inheritance funds typically cannot exceed 30-percent of the anticipated inheritance value. For example, if an heir is entitled to $100,000 of inheritance monies, the cash advance would be limited to $30,000.
Funding sources assume considerable risk when providing inheritance cash loans. Not only do they have to wait for probate to settle, there is also the potential for the estate to end up with insufficient funds. If the recipient provides truthful information when applying for an inheritance cash advance, the funding source cannot initiate legal proceedings if the estate is unable to repay the loan. Therefore, the funding source requires considerable information regarding the estate and the beneficiary requesting the advance.
Heirs who wish to obtain a cash advance will be required to provide a copy of the decedent’s Will and death certificate. The funding source will require contact information for the Estate Administrator. Heirs will be subject to a credit report to ensure no outstanding liens or judgments exist. If heirs owe back taxes or child support, most funding sources will reject the application.
As a general rule, funding sources provide inheritance cash advances when beneficiaries are entitled to $15,000 or more. The process generally takes five to ten business days to complete. Heirs must assign their inheritance rights to the funding source in exchange for the inheritance cash advance.
Traditional lenders typically do not provide inheritance cash advances because they are too risky of an investment. Instead, beneficiaries will need to work with inheritance cash advance companies or private investors.
Keep in mind companies and investors who provide inheritance cash advances charge a fee of 10- to 40-percent of the loan. Before entering into this type of financial agreement, it is important to make a list of the pros and cons to determine if there is a better way to obtain the necessary funds.