What to Know About Probate Loans and Advances
Sometimes we need money and we need it now. This may be true during the probate process. Handling a loved one’s estate may be seen as an honor but it is a thankless task. There is a lot of paperwork, court dates, and legal stuff happening, and this all takes money. You are likely working with a lawyer who wants some payment now. Or maybe you just want some of your inheritance now for a huge purchase.
If you need to receive an inheritance before probate ends, you may want to consider a probate advance or loan. Probate advances and probate loans are two ways in which you can receive a portion of an inheritance early. But like everything else in life, nothing is free and using either of these methods comes with a cost. Here is what you need to know.
What is a Probate Advance?
A probate advance is a cash payment offered by a third-party company in exchange for a portion of your future inheritance. Instead of borrowing money and making monthly payments, you sell part of your inheritance rights to the lender. Once probate concludes, the lender is repaid directly from the estate. There are no interest charges in the traditional sense, but the difference between the advance amount and the inheritance received functions as a fee. The longer probate takes, the lower the effective cost of the advance.
Probate advances can be helpful for individuals facing urgent financial needs, such as covering medical bills, paying off debt, or securing housing. They also appeal to beneficiaries who want to avoid the long wait associated with probate. However, the main drawback is that you ultimately receive less than your full inheritance. In some cases, the effective interest rate can be high, particularly if probate concludes faster than expected.
What is a Probate Loan?
A probate loan, by contrast, is a traditional loan secured by your future inheritance. You receive a lump sum upfront and repay it over time through monthly installments, typically with interest. Probate loans may benefit individuals who cannot qualify for standard financing and need immediate cash. Unlike advances, loans allow you to retain full inheritance rights, provided the loan is fully repaid.
However, probate loans often carry higher interest rates and strict repayment terms. Missed payments can lead to significant financial strain, and early repayment penalties may apply. Borrowers must carefully review loan terms to avoid unexpected costs, especially if probate ends sooner than anticipated.
Seek Legal Help
Probate can be expensive and the process can take a while. If you are wondering if you can get your inheritance now, you may want to consider a probate loan or advance.
A Fort Lauderdale probate litigation lawyer Edward J. Jennings, P.A. can speed up the process and help you understand your options. We can help with wills, trusts, probate and estate administration disputes. To schedule a consultation, call 954-764-4330 or fill out the online form.
