The heir prepayment is an option for the beneficiary to obtain cash for the inherited assets held by the probate. The heir’s advance is not a loan. No interest is charged, and after the probate is established, the estate will repay the source of funds.
The heir prepayment also refers to the irrevocable life insurance trust structured settlement payment. Future generations participate in estate planning and develop a financial plan that provides an annuity payment to beneficiaries over a period of time. The heirs may sell the annuity in whole or in part in exchange for a one-time cash payment.
Cash advances for inheritance are provided through sources such as private investors, banks or cash advances. Inheritance loans are usually reserved for beneficiaries who are entitled to an asset valued at $15,000 or more. The beneficiary assigns the inheritance rights to the source of funds in exchange for a sum of money.
The source of funds will be charged a fee to provide cash for inheritance. Fees range from 25% to 40%. For example, if the beneficiary is entitled to $100,000 in probate funds, the funding source may be between $25,000 and $40,000.
Investors engaged in inheritance funds are subject to significant risks. Although they conduct due diligence to ensure that the estate is financially capable of repaying the advance payment, many things may go wrong during the probate period.
Probate is required to prove the last will and will of the deceased, to repay the outstanding debt, and to allocate the assets to the designated beneficiary. When the deceased owns the property through a mortgage, the real estate must continue to pay the installment loan, property tax, homeowner insurance, and the costs associated with maintaining the property.
This will bring a heavy financial burden to the real estate. The average resolution time for probate certification is six to nine months. If the estate does not have the financial ability to pay outstanding mortgage debt, the property may fall into foreclosure.
If the heir opposes the will, the probate may be extended for one year or more. Controversial wills have few other things to do except bankruptcy and the wallet of probate lawyers.
If the deceased's will is gone, the probate certification will become more complicated. No will. Each state follows the probate law and assigns assets to beneficiaries accordingly. Heirs involved in intestate certification may find it more challenging to find sources of cash advance funding.
The heir prepayment company requires the beneficiary to provide the latest credit report and will search the government database to determine if there are outstanding liens, judgments, child support, spouse a maintenance or bankruptcy application.
The estate information will be verified by the Probate Court. The applicant must provide a copy of the deceased's will, death certificate and probate-certified personal representative contact information. Other documents may include probate certificates, inventory and assessment statements, and real estate listings or sales contracts.
Once the cash advance loan approval is obtained, the funds will be allocated within 5 to 15 business days. Much depends on the number of heirs’ loans and the source of funds policy.
If the estate lacks sufficient funds after the establishment of the estate will be certified, the recipient of the inherited funds will not be held personally responsible for repaying the advance payment. The source of funds cannot legally seek the return of the heir or estate. The exception is that the false information provided by the recipient can be proved in court.