Inheritance Advance
Waiting on the Estate: How an Inheritance Advance Works
Probate takes time, and bills do not. Here is a plain explanation of one option heirs ask me about, along with the questions to ask before signing anything.
An inheritance advance lets an heir receive part of an expected distribution before the estate closes. The heir sells a portion of that future distribution to an outside funding company, and the company is repaid from the estate at the end. This is not a mortgage, not a home equity loan, and not money that comes from me. Funding companies are separate businesses with their own terms, fees and approval standards. I explain the option because families ask about it, and because the cost is what most people do not think to check. If you want to talk it through before you approach anyone, call (208) 863-3493 or write to trina@boiseprobateagent.com.
An heir applies to a funding company
The heir, not the executor, applies. Most companies ask for the will, the court filing that opened the estate, and a rough figure for what the heir expects to receive. Approval usually rests on the estate itself rather than on the heir's credit or income, though every company sets its own rules.
The company reviews the estate
The company estimates what the estate is likely to distribute and how long that is likely to take, then offers an amount well below the expected share. The difference between what the heir receives now and what the company collects later is the cost of the advance. Ask for that difference as a dollar figure, not just a percentage, and ask what happens if the estate takes twice as long as expected.
Funds are advanced, then repaid at closing
If the heir accepts, funds are typically released within days. When the estate closes, the company is paid its agreed portion directly out of that heir's distribution. Other heirs are generally unaffected, though the executor and the attorney handling the estate usually need to be notified so the payout is recorded correctly.
Please read this before going further. I am a real estate professional. I am not an attorney, an accountant, or a lender, and nothing on this page is legal, tax or financial advice. Inheritance advances are offered by third party companies that are not affiliated with me and that set their own terms, fees and approval standards. I do not fund advances, receive a portion of them, or decide who qualifies. Before signing any agreement, review the full document with the attorney handling the estate and, where possible, with an accountant. Ask what the total cost will be in dollars, what happens if the estate distributes less than expected or closes later than expected, and whether the executor must be notified.
Want a second opinion before you sign?
I will read the agreement with you and tell you plainly what I see, then point you to the attorney or accountant who should review the rest.