Disclaimer: Consumer legal fundings and advances are not loans under applicable financing laws. Rockpoint’s products are non-recourse, meaning if you don’t win your case, you don’t have to pay us back. Receiving financial support in connection with a legal case is typically (and oftentimes incorrectly) referred to as a “lawsuit loan” or “loan.” Therefore, for the ease of search references, these terms may be used in this context to refer to our funding products, but we maintain our separateness from consumer loan products in all legal aspects.
You’re thrilled when you learn that you’re due a hefty inheritance, and you’ve already started planning what to do with the money. But a month crawls by, then two, and you still don’t have your inheritance. Maybe someone decided to contest the will, and it could be half a year or longer before probate settles.
If you can’t wait for your inheritance, consider taking out an inheritance loan. Rockpoint Probate Funding explains how inheritance loans work below. And if you’re a resident of the Land of Enchantment, check out our comprehensive New Mexico probate guide.
Inheritance Advances Demystified
Can you take out a loan on your inheritance? Yes, but an inheritance loan is nothing like the loans that you find at a bank. You’re not required to make monthly payments or provide loan collateral, and there are no interest rates to worry about.
Rather, an inheritance loan is a cash advance on your expected inheritance amount. That’s why you might see an inheritance loan referred to as an “inheritance advance” or “probate advance.”
Inheritance advances also differ from loans because you needn’t pay back the lender directly. Instead, you’re giving the advance company permission to make a claim against anticipated inherited assets. Once the probate process ends, the estate will pay the advance company the amount you agreed on (typically about 30% of the inheritance) and give the rest to you.
Understanding how inheritance advances work without seeing it in action can be tough, so here’s an example. Suppose your grandmother left you $50,000 in her will, and you expect an inheritance of $40,000 after fees, taxes, and other expenses.
But first, probate needs to settle, and that might not happen for three more months. You need $10,000 now to pay off medical bills or put toward a down payment on a house.
You find an inheritance advance company, such as Rockpoint Probate Funding, that agrees to purchase 30% ($12,000) of your inheritance. The company pays you a lump sum. When probate settles, the advance company collects your inheritance and keeps the agreed-upon amount, plus its fee, and the rest is yours.
How an Inheritance Cash Advance Can Keep You Financially Afloat
An inheritance cash advance is helpful when you need money right away and can’t wait for your inheritance to hit your bank account. Because an inheritance advance is essentially your own money, you can use the funds for anything you like. That includes:
- Buying a car: It’s tough to make it to work or appointments without reliable transportation. If you’ve been stuck with a beater for years, use your inheritance advance to buy an upgrade.
- Purchasing a home: In today’s competitive real estate market, you’ll need to come to the table with a generous down payment to catch the interest of sellers. If you’re tired of other buyers outbidding you, an inheritance advance gives you an edge that could help you score the house of your dreams.
- Paying for immediate expenses during probate: Too often, families are forced to rush through the probate process because they have immediate expenses to worry about. This leads to mistakes, like missing filing deadlines and forgetting to notify creditors. With a probate advance, your family won’t feel rushed to end probate too quickly.
What To Know Before Applying for a Probate Advance
Like any financial arrangement, securing an inheritance loan has perks and drawbacks. Let’s review the benefits first.
The biggest benefit of an inheritance loan is that you’ll gain immediate access to cash instead of waiting for estate disbursement. You could have cash in hand in as little as 24 hours. Comparatively, the traditional bank loan process may take days or weeks.
Another benefit is that you don’t have to make payments or provide collateral as you would with a regular bank loan. Additionally, it doesn’t matter if you have poor credit or no job. Probate advances are based on your inheritance amount, not your income or credit score.
What about the downsides? The largest one is that you’ll sacrifice a portion of your inheritance to gain access to the money right away. However, if you need cash immediately, giving up a portion of your inheritance might be worth it.
Another drawback is that you might not qualify in certain situations because of heir eligibility requirements. Probate lenders typically only fund heirs who expect an inheritance of at least $10,000, and they don’t usually work with estates outside of the U.S.
How the Estate Loan Process Works
You’ve decided that you’d like to apply for an inheritance advance, but where should you start? First, you’ll need to pick a reputable lending company, such as Rockpoint Probate Funding. You’ll then want to review the lender’s requirements to ensure that you qualify.
If you’re eligible, complete an application for funding. You’ll have to provide your ID and a few documents, including the deceased’s will, a copy of their death certificate, and the probate petition/letters of administration. You must also provide the name of the trustee or executor who is administering the estate.
Next, the advance company will review your application and make a decision. If approved, you’ll have money in your bank account quickly, usually within 24 hours.
Can’t Wait for Your Inheritance? Call Rockpoint Probate Funding
If you’re ready to apply for an inheritance loan or want to know how debts and creditors could affect your inheritance, reach out to Rockpoint Probate Funding today at (888) 263-8588.
