Probate can take what seems like forever when you are awaiting an inheritance. If you need money from an estate quickly but must wait for the legal process to complete, an inheritance loan may be an option. Inheritance loans allow you to utilize a portion of your liquidized inheritance before probate concludes. The following is some information about inheritance loans:
Inheritance Loans Defined
An inheritance loan is commonly known as an estate loan. It is a way that you, as an heir of an estate, can borrow what is going to eventually belong to you. This process does not provide you a portion of your actual inheritance, but is a loan against what you are intended to receive. You will have to repay the loan once probate has concluded and you have access to your inheritance.
How to Get an Inheritance Loan
There are several steps you will need to take to get an inheritance loan. First, you need to do some research to see if the option is a fit for your needs. Inheritance loans come with some taxation obligations that you will have to satisfy. Your estate attorney, someone from a place like Barrett Twomey Broom Hughes & Hoke LLP, can advise you of the specific tax liability that you will be responsible for. It is also useful to speak to a lender that specializes in inheritance loans to see if there are any interest consequences as well.
You next need to secure a specialized lender to process your inheritance loan. It is best to research several lenders before making a final choice. Before you make your selection, ask for their specific terms so that you can see who charges the least amount of interest.
You then need to get the necessary documents together and provide them to the lender. This will include a copy of the will, a death certificate, letters of administration from the probate court, your identification, and your personal financial records. The administrator of the estate will need to provide a certification of the amount you wish to borrow from the estate.
Finally, you will complete an application. The loan application will state your rights to the amount of money you want to borrow from the estate, the interest charged, and the lender's fee.
If you are in a bind for money and are expecting a significant inheritance, an inheritance loan may be an option. If your inheritance is small, it is not going to be useful since the interest, fees, and tax consequences can take a good portion of the amount you want to borrow.