Settling Estate Obligations With A Probate Loan
Probate is often a long process sometimes taking up to 3 years. During the probate process heirs may incur expenses like funeral costs, lawyer fees, settling outstanding debts, mortgage payments, taxes, and repairs to the property. A probate loan may allow the heir of the property to borrow against the equity of the property and pay these expenses without coming out of pocket. This could be a huge stress relief for people while dealing with an already stressful situation.
Buying Out Other Heirs With A Probate Loan
When there are multiple heirs inheriting real estate, it’s common for one party to want to maintain ownership while others want to sell their interests. If the heir who wants to keep the property does not have enough cash to buyout the other parties, then a probate loan may be a good solution. Through a probate loan, the heir can borrow based on the equity in the property to payoff the other parties. Hard money lenders like Wilshire Quinn offer fast funding for these types of loans.
Preserving Tax Value Of Property
When real estate is inherited, a common strategy by professional fiduciaries is to prevent a tax reassessment of the home. Many homes in the 1960’s and 1970’s were purchased for much less than current values, and the property taxes are based on the original purchase price. During probate, if the transfer of ownership triggers a property tax reassessment to today’s market value, the increase could be substantially more.
Getting a probate loan to buyout other heirs during probate, rather than after the distribution, may help avoid a tax reassessment. Please consult with your tax professional.