A probate loan is an allowance of cash that a bank allows you to borrow during the process of probate. You have to pay back interest on the loan and make regular payments to the bank until the probate is over. A probate loan is usually obtained in advance of the probate and used for any number of reasons including for buying real estate, making home improvements or paying for funeral expenses. A probate loan can be an asset or liability. Interested readers can find more information about them at official site
If you borrow a large amount of money in the beginning of the probate process, it will take many years to repay. While the heirs will get their inheritance at the end of the process, the money that was used to pay for probate, will not be available to them. A probate loan may also be helpful if there is no will in place and the deceased had no power of attorney. The loan could be used to hire an attorney to settle the estate so that all debts and obligations to creditors are paid.
A probate loan may also be needed if there is no will or trust document and the decedent’s heirs do not have any ownership interest in the inherited property. This happens very rarely, but if this does happen, you will have to take care of the property until it is settled. The heirs cannot claim the inheritance for themselves, unless they can prove they are entitled to the inheritance. In this case the heirs would need to take out a separate inheritance loan from a probate finance company. Probate loans can also be helpful if the heir cannot afford to pay off debts, or needs money for an extended period of time while the family waits for the probate process to end and the inheritance to be distributed.