Inheritance Accelerated: Understanding Inheritance Advances in the US

Opting for an inheritance advance becomes a viable choice when anticipating funds from an estate but wishing to bypass the prolonged probate process. Often termed as a probate advance or probate cash advance, it facilitates an immediate lump sum payment.

However, in return for this advance, you consent to the advance company buying a portion of the inheritance. While this approach swiftly places funds at your disposal, it’s essential to be aware of certain downsides. Let’s delve into the specifics.

Comprehending Inheritance Advances

An inheritance advance involves an upfront payment based on the assets you’re set to inherit. Similar to a payday advance loan, it offers immediate access to funds that you’d otherwise have to wait for in the future.

It’s crucial to note that an inheritance advance isn’t a traditional loan. Rather than repaying the lender directly, you permit the advance company to make a claim on a portion of the assets you anticipate inheriting. Once the probate process ends, the estate settles the agreed-upon amount to the advance company and disburses the remaining assets to you.

To illustrate how an inheritance advance operates, consider this scenario: Suppose your parents leave you a $100,000 inheritance in their will. You anticipate receiving $90,000 after settling probate fees and expenses, but you urgently require $25,000 to cover your child’s college tuition fees.

In this case, you opt to collaborate with an inheritance advance company, which proposes to purchase 30% of the inheritance, equivalent to $27,000. Simultaneously, the company agrees to provide you with the $25,000 needed in a lump sum. Upon the probate’s conclusion, the advance company collects the $27,000 it acquired, the advanced $25,000, and its fee from the estate. The remaining inheritance funds are then directed to you.

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Advantages of Inheritance Advances

Inheritance advances offer several benefits, notably providing swift and convenient access to cash. Unlike probate loans, which might take days or weeks for approval and funding, an inheritance advance can often be acquired within as little as 24 hours post-approval.

Furthermore, these advances typically do not necessitate credit checks, making them an appealing option for individuals with poor credit histories. There’s no interest charged on the advance itself, however, the advance company may levy a flat fee.

One of the key advantages is the flexibility inherent in an inheritance advance. The funds can be used to cover a wide range of expenses without any requirement for collateral.

Additionally, borrowers are relieved of the burden of making payments since the amount owed is directly collected by the advance company from the estate. This eliminates concerns about repayment or ongoing financial commitments.

Disadvantages of Inheritance Advances

While inheritance advances offer immediate cash, they come with certain drawbacks that might not suit everyone. The primary drawback is the relinquishment of a portion of your inheritance in exchange for the convenience of acquiring cash upfront.

Referring to the earlier example, you’d need to carefully weigh whether giving up $27,000 plus fees to the advance company is justified by the immediate receipt of the $25,000 necessary for education expenses. Exploring alternative funding options might be more prudent.

For example, taking out a Parent PLUS loan or a private student loan could be a preferable choice. Similarly, opting for a home equity loan, if comfortable using your home as collateral, might offer more favorable terms and avoid reducing your inheritance.

Ultimately, deciding whether to pursue an inheritance advance necessitates a thorough consideration of the trade-offs involved and exploring other potential funding avenues that might better suit your financial circumstances.

Determining When to Consider an Inheritance Advance

The ideal time to contemplate an inheritance advance is when an immediate need for funds aligns with the certainty of an impending inheritance. It’s essential to note that inheritance advance firms might hesitate to provide an advance if there’s uncertainty regarding the expected inheritance or its exact amount.

When you are in urgent need of funds and after you have exhaustively explored all other borrowing options, considering an inheritance advance could be appropriate. Alternative borrowing avenues might include home equity loans, a home equity line of credit, or a personal loan. For smaller expenses, utilizing a credit card might also be an option.

Before pursuing an inheritance advance, it’s beneficial to assess the required sum of money you will ultimately need. This allows you to research and compare various inheritance advance companies to gauge the potential upfront amount available to you. Consulting an Investment Advisor can provide clarity and assist in making an informed choice.

Securing an Inheritance Advance

To secure an inheritance advance, your initial step involves identifying a company specializing in these advances. These companies are typically not available at banks or credit unions, so searching online for inheritance advance providers is advisable.

Following this, review the advance company’s prerequisites to determine your eligibility. If uncertain, reach out for a consultation to clarify your qualification. Eligible candidates must provide details about the inheritance and submit specific documents, including:

• A copy of the death certificate
• The Will, if you can get one
• Probate petition and letters of administration
• Valid identification
• Information regarding the executor or trustee managing the estate settlement

Notably, disclosing details about your income or credit scores is generally unnecessary.

Upon furnishing all required information, the inheritance advance company will evaluate your case and present an advance offer. If the terms are acceptable to you and you accept the offer, the company disburses the funds, often within a short period, sometimes as soon as 24 hours.

Selecting the Ideal Inheritance Advance Company

Online searches yield numerous inheritance advance companies, yet choosing the right one is crucial. When evaluating inheritance advance options, consider:

• Advance Amount: Assess what your maximum available advance is to meet your financial needs.
• Percentage Purchased: Understand the portion of your inheritance the company acquires.
• Fee Structure: Review fees and their payment schedule to gauge their impact.
• Funding Speed: Consider the timeframe for advance disbursement.

Assessing the overall reputation of the company is crucial. Reviewing customer testimonials and online reviews can offer valuable insights into the company’s ease of service and the satisfaction levels of its customers when obtaining an inheritance advance.

Inheritance advances offer financial relief for anticipated inheritances, yet they come with costs to consider. Assessing the pros and cons, alongside exploring alternative funding options, is essential in determining whether taking an advance aligns with your financial needs and goals.

Have Questions? Contact us

We’ve assisted our clients through every stage of life. Even when you’re not aware that something might impact your financial future, it likely will to some extent. Engaging in a conversation with your investment advisor about any financial changes is an excellent approach to keeping your financial goals in focus.

For more information or to connect with me, you can reach out via email at macekadmin@iaprivatewealth.ca or get to know me better by exploring my engaging video content on YouTube https://www.youtube.com/@joemacek.

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Don’t hesitate to reach out today at 1–888–324–4259 to discover more about how we can help you achieve your investment milestones.

Joe A. Macek, FMA, CIM, DMS, FCSI

Investment Advisor, Portfolio Manager

iA Private Wealth | iA Private Wealth USA

Toll Free North America: 1–888–324–4259

Email: macekadmin@iaprivatewealth.ca

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