Estate, Probate & Trust Loans: 3 Legitimate Reasons to Use Inheritance Loans

Written by Posted On Friday, 02 October 2020 13:13
Estate loans, probate loans, trust loans, inheritance loans Estate loans, probate loans, trust loans, inheritance loans

Estate Loans, Probate Loans & Trust loan (Inheritance Loans)

An inheritance loan, which can also be known as an estate loan, probate loan, or trust loan is a valuable financial tool that can be used by heirs of an estate which contains real estate that can be borrowed against. A probate or estate loan is essentially a home equity loan on inherited property. The estate may currently be in probate or going through a trust administration process. During this time the heirs of the estate are not able to directly access the assets they are entitled to, which is why an heir may choose to utilize an inheritance loan for the following reasons:

1. Settling Obligations of the Estate

The probate process can take anywhere from months to years to be completed. During this time there may be multiple obligations of the estate that must be settled quickly. These types of obligations may include legal fees, funeral costs, maintaining or repairing properties or paying off debts of the estate. If the heirs of the estate do not have the cash available to satisfy these obligations of the estate, a short-term inheritance loan can deliver the liquidity necessary to solve these problems.

2. Receive an Inheritance Advance

While waiting for the probate or trust administration process to complete, heirs of the estate may have financial needs such as paying medical bills, paying off high-interest debt, funding a down payment for the purchase of a home or even taking advantage of an investment opportunity. An inheritance loan gives the heirs early access to the assets they are entitled to.

3. Dividing an Interest in Real Estate between Heirs

In some cases, one heir may wish to retain ownership of a property in the estate while another heir would rather just have the cash. An estate loan to buyout siblings is a common request. In this situation the heir who wishes to retain ownership can take out an inheritance loan against the property and use the loan proceeds to pay off the other heir(s) for their interest in the property. Prop 58 loans can allow the heirs to obtain the liquidity they need to divide the interest in the real estate and avoid a property tax reassessment when the property transfers from the parent to child.

Read More: How to Refinance an Inherited Property to Buy Out Heirs

Where to Obtain a Californa Probate Loan, Estate Loan, Trust Loan, or Inheritance Loan

In most situations conventional lenders (banks, credit unions) are not able to provide California probate, estate or trust loans. Conventional lenders such as banks and credit unions are generally not able to provide a home equity loan on inherited property. To obtain this type of loan borrowers frequently use the services of California hard money lenders who are experienced with this type of financing.

Hard money loan lenders provide short-term loans to borrowers who have equity in properties, such as heirs of an estate.

How to find hard money lenders near you.


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Jeff Hensel

North Coast Financial, Inc. is a California hard money lender with over 37 years of experience specializing in various types of hard money loans including probate and estate loans, investment and rental property loans, bridge loans, fix and flip/rehab loans, purchase loans, cash out and refinance loans and other hard money loans with California real estate as collateral.

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