Fees for an inheritance loan vary based on the lender and a number of variables related to the estate. These variables include overall financial risk, projected worth of the estate's assets and the lender's estimation of how long the estate should take to close, explains Heir Advance Company.
Also called a probate loan, an inheritance loan is designed to give the benefactor of a will access to an estate before the completion of the probate process. The lender identifies the risks involved in the estate, and it bases its fees on those risks, explains Tim McNamara of McNamara & Yates PC. The fee could be a flat fee or an interest rate.
Inheritance loans often carry very high fees, but in cases where the heir is going to lose a property or suffer other financial damage without access to the estate's funds, these loans may be essential, notes McNamara. These loans are repaid when the estate gets out of probate. If the debts or tax liabilities of the estate render it valueless, the company that funded the inheritance loan has no recourse to collect any repayment. Responses to this situation vary from lender to lender, but companies such as the Heir Advance Company do not require heirs to repay their advances if the estates produce no money.