Inheritance Funding | 3-minute read
Estate Loan | Inheritance Loan | Inheritance Advance

Inheritance Funding Options are defined, per finder.com…

An inheritance advance, an advance on your inheritance amount.

An estate loan, a secured loan that uses your inheritance as collateral.

Inheritance Advance

To put it simply, an Inheritance Advance is an advance of money granted by a company based on a pending inheritance.  There is a fee, and the advance company will qualify your advance on criteria related to the estate and your share of the estate.  Your credit score may not affect eligibility.  Also referred to as a “Probate Advance”.  It is not a loan.  The estate normally pays the “lender” their afore-agreed-to “share” of the estate, which you assigned to them in exchange for the advance.  There are no payments, there is no rate of interest, and it is generally not governed by regulations (except for in the State of California).  The main benefit provided by the Inheritance Advance is heirs need not wait for distributions from the estate.  Distributions can take time, sometimes a year or more, depending on the estate.  The costs of such advances can be very high relative to the advance amount.

Inheritance Loan

Also known as an Estate Loan or Probate Loan.  While not your typical loan, an Estate Loan can lend money to a borrower based on the value of the estate and the heir/borrower’s share.  While terms will be different lender to lender, loan to loan, there will be loan repayments and interest due.  Qualification for an estate loan may be more involved than with an inheritance advance.  Typically there is more regulation and oversight to these vehicles as they are classified as loans and not advances.

Inheritance Funding: Things to Consider

• Please consider the costs of these Loans or Advances.  If you’re experiencing an emergency, the costs may be warranted or necessary.  But if you can wait, you’ll keep more of your money.
• Distributions may be available from the estate earlier than you realize, depending on the estate and the state.  Early partial distributions may be possible.  Communicate with the executor/personal representative and estate attorney to rule out an interim distribution before taking a loan or distribution.
• Given the lack of regulation in the Inheritance Advances environment, not all Inheritance Advance companies are the same, and there are some bad actors in this space. Do your homework.
• Inheritances are often a once-a-lifetime opportunity to set up your future.  Treat your inheritance with the gravitas you deserve.
• SmartAsset has a Financial Advisor Locator that may help you look at your inheritance strategically: Find Your Advisor

Inheritance Funding: Recommended Reading…

“Inheritance Funding” on finder.com.

What Is a Probate Loan and How Do You Get One? on SmartAsset.

An article, published in April 2021 by Consumer Reports brings to light some downside to Inheritance Advances: “How an Obscure Industry Makes Money Off the Dead.”