After the passing of a loved one, you’d expect money to be the last thing on your mind. Surprisingly, this is almost never the case. With the unbelievably high funeral expenses, the financial aspect quickly comes to the fore.

If you live from paycheck to paycheck like so many of us do, you might be considering getting a loan to get through this terrible period a bit more comfortably. Still, a loan means you’ll be in debt for who knows how long, so it’s always better to opt for an inheritance advance.

What is an inheritance cash advance?

While it may sound like a loan, an inheritance advance is actually an assignment of interest. Here’s how it works:

  1. You have rights to something of value—inheritance, in this case—but don’t actually own it yet. When somebody leaves you something—be it money, real estate, or valuable items like works of art—you’re not the owner until the probate process is over, but you have a right to the property. You don’t have to wait for ownership; you can sell a part of the right itself.
  2. You choose to sell a portion of your right to inheritance. This does not affect any other heirs. You can only sell your share of the estate in advance.
  3. You receive the money, and the buyer of the right gets the part of the inheritance that they bought from you—nothing more and nothing less.

What are the practical differences between a loan and an inheritance cash advance?

There are two significant downsides to a loan that are not included in an inheritance advance:

  • A loan includes a set date by which you have to repay it
  • A loan is based on your personal liability

A loan includes a set date by which you have to repay it

When you take a loan, you and the lender agree on a date by which the entirety of the sum has to be repaid. If you fail to repay it by that time, the interest rates jump. In the worst-case scenario, the lender will legally prosecute you. The consequences of this go from the lender claiming your property to you being incarcerated for being unable to repay your debt.

If you opt for an inheritance advance, you don’t have to worry about this. You’ve sold a part of your right to the inheritance, and both you and the buyer are in the same situation now—waiting for the process to end so you can go your separate ways.

A loan is based on your personal liability

If you take a loan, you are personally responsible for repaying it. If you fail to do so, you and your property will suffer the consequences.

If you get an inheritance advance, you have nothing to do with that part of the estate anymore. You sold the rights, and it’s up to the buyer to collect their share when the probate process ends.

The takeaway

While they may seem similar at first glance, a loan and an inheritance advance are entirely different. For anyone in the probate process, an inheritance advance is an infinitely better option.