If I’m executor of my mother’s estate but 1 of my brothers can’t wait for probate to close so he wants to go through an inheritance loan company, is this legal before the estate is settled?
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If I’m executor of my mother’s estate but 1 of my brothers can’t wait for probate to close so he wants to go through an inheritance loan company, is this legal before the estate is settled?
have 2 brothers who are co-heirs. All paperwork has been filed and we are waiting for everything to clear probate.
Asked on January 15, 2015 under Estate Planning, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
It is legal but risky: anyone can seek a loan for essentially any reason not involving the commission of a crime. Those loans can even be, potentially, based on very shaky grounds, if you'll find someone to loan you the money. For example, if you believe you are very lucky and convince someone else that you are, then you could possibly get someone to loan you, say, $50,000 in expectation of you winning big in Vegas...but even if you lose, you'd still have to repay the $50,000, leaving you vulnerable.
Similarly, you can get a loan in expectation of an inheritance. But you'll have to repay the money when and in the amounts required by the loan agreement. If probate takes longer than expected, or there are challenges to the will or distribution (e.g. previously unacknowledged biological children appear; someone shows up with a different version of the will and claims it's the valid one), or there is some unexpected large debt of the estate that eats up alot of the inheritance--in any of these case, the borrower might mind himself having to start repaying a loan without the inheritance he was counting on to do so.
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