The Pros and Cons of an Inheritance Advance
When someone passes away, the distribution of their estate through probate can be a lengthy process. If you’re a beneficiary waiting on your inheritance, the time it takes to receive those funds can cause frustration, especially if you have immediate financial needs. An inheritance advance offers a solution by providing you with access to a portion of your inheritance upfront. However, it’s essential to weigh the potential benefits and drawbacks before you pursue this option.
What is an Inheritance Advance? An inheritance advance is a form of financial service that provides heirs with a cash advance against their expected inheritance. Companies like InheritNOW carefully assess your inheritance situation and, if approved, advance you a lump sum—usually a percentage of your projected inheritance. An inheritance advance is not a loan; you won’t need to worry about a credit checks or making monthly payments. Repayment, along with fees, comes directly from your inheritance when the estate is fully settled.
Pros of an Inheritance Advance
- Fast Access to Funds: You receive cash without waiting months or years for probate to conclude. This can be invaluable for pressing financial obligations like medical bills, debt payments, or unexpected expenses.
- No Credit Checks: Since an inheritance advance is based on the value of the estate and not on the recipient’s credit worthiness, it’s available to anyone—even those with poor credit or limited borrowing options.
- Flexibility: Unlike with some loans, there are generally no restrictions on how you use the money from an inheritance advance.
- Reduced Stress: Knowing you have financial resources sooner can reduce stress and provide peace of mind, especially during a difficult period following a loved one’s passing.
Cons of an Inheritance Advance
- Fees: Inheritance advance companies charge a fee for the service. These can significantly reduce the final amount of inheritance you receive. It’s crucial to compare fees and ensure you understand the overall cost.
- Reduced Final Inheritance: As mentioned above, the fees associated with an advance are paid by the estate which means the total inheritance you ultimately receive is less (original amount minus the amount of the fee).
- Limited Inheritance Control: By accessing a portion of your inheritance early, you’ll have less control and flexibility over the funds later.
- Potential for Early Depletion: There’s a chance you could deplete a significant portion of your inheritance sooner. This could be problematic if unexpected needs arise in the future.
Is an Inheritance Advance Right for You?
An inheritance advance can be a suitable choice if you have immediate financial needs and a clear understanding of the fees and potential risks involved. Before deciding, remember:
- Seek Transparency: Companies like InheritNOW strive for transparent fees and procedures. Ensure you ask crucial questions and carefully consider company-specific terms and conditions.
- Do Your Homework: Explore alternatives like personal loans or lines of credit as they might offer better terms depending on your situation.
- Professional Advice: Consider seeking financial counseling to assess whether an inheritance advance aligns with your long-term financial goals.
Ultimately, the decision to obtain an inheritance advance is a personal one. Careful research, an objective view of your financial situation, and awareness of both advantages and disadvantages will empower you to make an informed choice.
