The process of probate can be a very long process while waiting for the close of the estate. If you are in urgent need of your inheritance but are forced to wait for the necessary information from the IRS, an inheritance loan may be an option. An inheritance loan will provide a way for you to utilize your inheritance in advance of probate.
What is an Inheritance Loan?
An inheritance loan is also known as an estate loan, a probate loan, or a trust loan. It is a very useful way that allows heirs of an estate that includes real estate, which can be borrowed against when it is going through the trust administrative process. Since you cannot access the assets directly, an inheritance loan is a great way to utilize your inheritance. It can be useful in the following situations:
- To Get An Inheritance Advance- While waiting for an inheritance to finalize, you may need to deal with some financial obligations, including paying off high interest debt, medical bills, purchasing a home, and the like. An inheritance loan will help you pay for things that are pending using assets that you are entitled to.
- Division of Interest Among Heirs- If you would like to retain ownership of the physical property in the estate while another heir would prefer to have liquid cash, you can take out an inheritance loan against the property in order to pay the other heir for their interest in the property.
- Settling Obligations- If the estate has any lingering obligations that need to be met, an inheritance loan can settle those debts, especially if they need to be paid immediately. This can include legal fees, burial costs, or repairing properties.
4 Steps To Get An Inheritance Loan
- Research the Option
You should first research the option of an inheritance loan to see if it worth it. There are some tax consequences that come along with it. You will need to speak with the estate’s representative or an attorney to discuss the different tax and interest consequences about the loan as well as talk about different lenders that specialize in inheritance loans.
- Choose a Lender
After deciding to go forward with an inheritance loan, you need to choose a lender. You will need to speak to them to obtain information about their standard terms so that you can choose the lender that charges the least amount of interest.
- Gather Your Documentation
Next, gather your documentation to get the loan. This will typically include a copy of the will, the official death certificate, and any copies of letters of administration provided by the probate court. You will also need a certification of the amount loaned from the administrator of the estate along with your forms of identification.
- Complete Application
The final step is to complete the loan application. This will assign the rights to the amount of your inheritance in addition to the lender’s fee.
Sometimes it can be hard to get approved for an inheritance loan if you have a bad credit history. In cases, it might be easier to apply for a personal loan. According to this website, you see that the application process is a bit easier, in Sweden for example. This source, (http://låna-snabbt.nu/lan-med-betalningsanmarkning/), discusses the possibility to get accepted in Sweden on some lenders, despite having a very bad credit score.