If you are fortunate enough to be a part of a family that has built up wealth and has planned the future distribution of an estate to family and loved ones, you may be in line to receive an inheritance. The receipt of this inheritance may be just what you need to solidify your own future financial security or to satisfy an immediate financial need.
Immediate Need of Inheritance
If you have an immediate financial need, you can skip waiting for your inheritance as the estate goes through the timely process of probate by looking at probate loans on inheritance or probate advances. They are a means of obtaining your inheritance immediately after the probate process begins rather than waiting until the estate is finalized. The more assets and value the estate has the longer it will take for the probate court to process the estate and disburse funds to the heirs. Once it is verified that you are indeed an heir to the estate, you are eligible to receive a probate loan or an advance on your specific portion of the estate. Understanding the difference between the two can help you decide which is best to utilize for your particular situation.
Difference Between Inheritance Loans and Advances
When working with a bank to get a probate loan, you will go through a loan approval process much like a home equity loan. You will need to supply proof of income and go through a credit check. The assets and the equity value of the estate will be assessed for the approval of the loan. Generally, these loans are to be paid off prior to the distribution of the estate, and you will pay interest on the loan. Another aspect of this loan is having your credit score checked and what the inquiry will do to your score.
With a probate advance, there is no loan process to go through. The value of the estate and your portion of inheritance is assessed, and a percentage of that amount will be advanced to you. This is a cash advance that you will be able to obtain within 48 hours that you will not be required to pay back. The company funding the advance will get repaid when the estate closes. If there are funds remaining and owed to you, you will receive them at that time. Since an advance is not a loan, you will not have a monthly payback schedule nor will you pay interest on the funds. However, there may be fees charged for your advance. A benefit of the advance is that credit checks are not required, which means there will not be an impact on your credit score, and you can obtain this advance even if you have a low credit score.
Reasons to Advance Your Inheritance
Some estates can take from a few months to more than a year before final distribution is made to the heirs. Here are some of the benefits of receiving your inheritance in advance:
- Probate expenses can become burdensome, and taking an advance or loan out on your inheritance can assist in financial relief while going through the probate process.
- You can pay off your personal debts to build your credit score for future planning.
- You can get a head start on investments.
- You can pay off your education debt or advance your education.
If you have decided to get an inheritance loan or an advance, it is important to utilize these funds wisely. This unexpected monetary gift can be a means by which you can enhance your life circumstances. Whether you take care of immediate needs or future needs, be smart in how you invest in yourself.