Many people need to familiarize themselves with the probate process. As a result, it can be very intimidating. Understanding probate can help you through the process. It can also give you realistic ideas about what to expect during probate and avoid any myths or misconceptions.
Probate is a legal process to transfer property from a deceased person to their beneficiaries. Probate can include administering a will or distributing assets according to state laws if someone dies intestate (without a will). A court oversees the probate process through a person known as an administrator, executor, or personal representative.
Generally, probate begins with someone filing a petition for probate. The petition typically includes a copy of the death certificate, a copy of the will, any codicils to the will, and an inventory of the deceased’s estate. The court appoints an executor. For simple estates, probate can be a quick process. For more complex estates, probate can take a very long time. That is because the executor has to wind up all of the deceased’s business before transferring assets to the beneficiaries. That means paying debts owed by the deceased and collecting debts owed to the dead.
Because probate can take a long time, beneficiaries may want to get a probate advance. Probate advances are not the same as inheritance loans. In an inheritance loan, you borrow the money you owe, regardless of how much you get as a beneficiary. You may have to start repaying it before the probate process has concluded. In a probate advance, you sell a portion of your inheritance. You get the money immediately. You do not owe any payments, you do not pay any interest, and the purchaser takes the risk that your inheritance will be lower than anticipated.
Although probate advances do not charge interest, they are not free. You pay a fee for the advance. Unlike interest, that means you know how much the advance will cost ahead of time. It also helps you determine whether a probate advance is an excellent financial decision.
You may be surprised that a probate advance company only sometimes recommends probate advances. However, it is true. While probate can be lengthy and expensive, some probates are short. You give up part of your inheritance if you get a probate advance. That is not a good idea if you will use the money for something frivolous or trivial. On the other hand, if you need money from the estate to pay bills or for other serious concerns, a probate advance makes sense. You must weigh the pros and cons of giving up part of your inheritance to get the money earlier while also avoiding any myths or misconceptions about the probate process.