Probate money refers to cash left to beneficiaries through a decedent’s last will and testament. Probated inheritance assets cannot be distributed to heirs until estate settlement protocol is completed. Unless protected by a trust, inheritance money can be held in probate for several months, or years.
Probate money can also reference cash obtained by liquidating probated assets. This might include inheritance cash advances or funds obtained through the sale of real estate or titled property. It can also encompass life insurance proceeds and cash held in bank accounts owned by decedents.
Many elements are attached to selling probated inheritance property. Much depends on the type of asset and its value. Most types of property and personal belongings can be sold during the probate process. Some states require court approval while others grant authority to the estate executor through court confirmation. It is best to obtain legal counsel prior to selling any property held in probate.
Heirs who elect to obtain inheritance loans must adhere to probate laws in the decedent’s state of residence. Since probate laws vary by state is it wise to obtain legal counsel from a local attorney. Start by speaking with the attorney who executed the decedent’s last will. He should be able to offer guidance to the designated estate administrator, heirs and beneficiaries.
Inheritance property can be used as collateral to secure probate loans. Heirs obtain cash advances through private investors or investment companies. Investors do not provide full face value for property because they assume considerable risk when investing in probated estates.
Heirs assign inheritance rights to the cash advance funding source and are not responsible for repayment of the advance. Instead, investors submit a creditor claim to the estate executor. Investors are not paid until probate settles and all other estate-related expenses and outstanding debts are paid.
The most notable risk for investors stems from the estate being unable to repay the cash advance once probate settles. The second risk is investors cannot collect on the debt until probate settles. This might be a few months or a few years. If an heir contests the will, probate could by extended by several months and potentially bankrupt the estate.
Funding sources have no legal recourse when estates become financially insolvent. The exception to this rule is if the recipient provided false information regarding the estate and inheritance property. Investors must be able to provide evidence which can stand-up in court and absorb initial court costs related to the case.
In today’s economy, heirs often need to sell inheritance property quickly and can’t afford to wait months or years. Probate liquidation is one option, but can be costly. Funding sources can charge 30-percent or more for providing inheritance cash advances.
Obtaining advance on probate money advances through a funding source usually takes three to four weeks. Investors must verify personal credentials and usually conduct a background and credit check. Estate assets must also be verified.
Beneficiaries should engage in due diligence before selling probated inheritance property. After all, heirs are signing away inheritance rights. It’s important to make certain they land with an honest investor. When possible, consult with three or more investors to compare fees.
