Here you will find answers to the most commonly asked questions as explained by our primary funding company.
If you have any other questions, please feel free to contact us and ask.
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Who is eligible to receive a cash advance?
An heir who will be inheriting at least $17,000 from a probate which is already open or is currently being opened; or a beneficiary of a trust who will be receiving at least $17,000 in distribution(s) from the trust within three years. The trust instrument must not limit the beneficiary's right to assign an interest in future trust distributions (a so-called "spendthrift clause").
What do you receive in return for the cash advance?
In return for a present cash payment, the heir or beneficiary sells to (technically, "assigns to") the right to receive a fixed amount of money out of the heir or beneficiary's share of the estate or trust.
When do you get paid?
We are paid directly from the estate or trust upon distribution. Funds not needed to satisfy the assignment are distributed directly to the heir or beneficiary.
Are there any application fees?
No. Fees are charged only for funded deals, and are deducted from the advance.
Will credit problems prevent an heir from getting an advance?
We obtain a credit report in preparing a case for funding, primarily to determine that there are no judgments, child support or bankruptcy proceedings that might interfere with payment of the assignment. A poor credit record alone, including delinquencies, discharges in bankruptcy, foreclosures, etc., will generally not prevent an heir or beneficiary from receiving an advance.
Are monthly payments required to repay the advance?
No. We are paid directly and in full from the estate or trust at the time distribution is authorized.
What if there are insufficient funds in the estate or trust to pay you?
This is one of the risks assumed when we accept an assignment from an heir or trust beneficiary. The heir or beneficiary who gives true information on the application and honors the assignment agreement has no personal liability for payment of the advance.
What happens if a previously unknown creditor makes a claim on the estate?
This is one of the ways a trust or estate may end up with insufficient funds to pay us in full, and it is a risk we assume. We can only receive those distributions from the probate or trust that are due to the heir or beneficiary. Medical claims arising from the last illness are a major concern. We absorb the loss and have no recourse to the heir—unless the heir or beneficiary was aware of the claim(s) and failed to disclose it in the application process.
Can an heir qualify for an advance even if there is no will?
If a person passes away and does not leave a will, then that person's estate is said to be intestate. Every state in the US has different laws governing an intestate estate. The only way to be certain that an heir is inheriting from an intestate estate is to contact the estate attorney and determine what portion, if any, they are entitled to under the law of the state where the decedent resided.
What happens if the distribution of the estate is delayed?
We must wait until the estate or trust is ready to distribute. There is no recourse to the funded heir for any delays in the distribution. This is another one of the risks we assume.
Are there any geographic limitations on funding?
No, but most advances are to heirs or beneficiaries here in the United States. Advances based on estates in other countries are considered only in very limited circumstances and require detailed, reliable information about the estate and full cooperation from the estate attorney.
What if the probate is in a different state?
It is common for the heirs of an estate to reside in a state different from the deceased's state. This rarely causes a difficulty.
What are the criteria that determine the cost of an advance?
The size of the advance, complexity of the estate or trust, and the estimated time to distribution are the major factors affecting pricing.
Are there minimums and maximums for cash advanced to an heir or trust beneficiary?
Advances normally range from $5,000 to $100,000. As a rough rule of thumb, assume the advance cannot exceed 30% of an heir's expected distribution from an estate or trust.
What steps need to be taken to consider funding a transaction?
Fill out a short form called an Heir's Information Summary. Then send the completed form to IFC, together with copies of personal identification and relevant probate or trust documents, to the extent you have them available.
Are there any restrictions on obtaining a cash advance on my trust?
Many trusts contain a clause that is referred to as a "spendthrift provision." This clause protects you, as a beneficiary, from having creditors attach themselves to your share of the trust. Unfortunately, the clause also prohibits you from voluntarily assigning your interest to a third party which is exactly how IFC is able to provide cash advances on trusts. We are more than happy to review your trust to determine if it contains a spendthrift provision. If you wish to review it yourself, you should look for a section that contains anything similar to the following:
Spendthrift Provision
"No interest of any beneficiary in the principal or income of any Trust created under this instrument shall be transferable by voluntary assignment, anticipated, assigned, alienated, encumbered, or hypothecated, and, to the extent permissible by law, shall be free from execution, attachment, bankruptcy and other procedures for the satisfaction of creditors' claims or be subject to legal process before actual receipt by the beneficiary."
Who should I contact for additional information?
To get started please apply now.
