What Is The Difference Between A Probate Loan and An Inheritance Cash Advance?

Right after the death of a close relative, you would think that money should be the last thing on your mind. But for some of us who are not financially robust, it is not the case. If you have been left an inheritance and are waiting to receive it, then you would expect it to be a smooth and effortless process, for it is your right after all. However, most heirs find out the hard way that the distribution of inheritance through probate is a very lengthy and complicated process. In this article, you’ll have a probate court hearing explained by Inheritance Advanced, and much more

The distribution of inheritance is handled under a process called probate, which is a court-supervised process that deals with the person’s will after their death. In most cases, it can take up to twelve to eighteen months, and a significant percentage of them can also extend up to three years, depending on many factors like estate size, debts, details of the will, etc.

In most cases, the process lasts longer than the heirs expect it to be. In the meantime, they face delays and even financial setbacks because of the monetary costs that the process may incur, such as the cost of hiring an attorney, among others. However, even during this period, you can get money fast through a probate loan or an inheritance cash advance. Although many times these terms are used interchangeably, they refer to very different procedures. 

Probate Loans

A probate loan is a sum of money that a lender will allot to you for the period of your probate. Similar to a regular loan, the borrower is obliged to pay interest on a monthly or quarterly basis and to register an asset of sufficient value as collateral based on the terms of the loan. 

Inheritance Cash Advance

A cash advance is not really a loan, but a way to obtain your inheritance money before it is settled through probate. It also has many benefits over probate loans.

An inheritance cash advance is a way for heirs to access a part of their inheritance before it has been cleared through the process of probate and passed on to them. The heir can choose the desired amount less than the in-cash value of their part of the inheritance, and it will be provided to them by a cash advance company. This amount is later collected by the company at the end of the probate as a portion of the inheritance amount. 

Differences Between Probate Loans and Cash Advances

The cash advance is not a loan and thus does not incur any interest or monthly installments after the money is provided. Also, unlike a regular probate loan, which takes a certain amount of time to be issued, a cash advance can be issued within five business days.

After the issue of a cash advance, the beneficiary or heir is completely free to employ the funds in whichever way they may without any financial liability towards the cash advance company.

All the operations regarding the paperwork for advance and repayment are handled by the company directly along with the estate administrator, and the court.

But perhaps the most striking quality of the cash advance is that they are non-recourse. This means that even if the inheritance is locked or the probate takes longer to be settled than expected, or if there simply isn’t enough money in it to pay back the cash advance, then the beneficiary or heir is not liable to pay back any amount whatsoever to the company they received the advance from. Those costs will be borne by the cash advance company alone.

Unlike the probate loan, as a qualifier for which the beneficiary needs to have a decent credit history and collateral, the inheritance advance only requires you to be a recipient of a significant sum of inheritance. So, even people with below-average credit history can avail this process.

A fee for the cash advance is decided at the beginning based on the value of your inheritance, the complexity of the probate process, and the estimated time it could take to be cleared. Often a minimum and maximum amount are set based on the beneficiary’s portion of the inheritance, and risks and complexities involved in the process of probate. 

Take Away

Similar to a probate loan, cash advance facilities are offered nationwide by most companies, so that you can handle your inheritance and money from different locations with equal ease and just as fast. However, explore your monetary schemes thoroughly to avoid walking into any financial scams.