Executor Loan – Monetary Advance Against The Value Of An Estate
When “time is of the essence,” an Executor Loan could be the solution you’ve been searching for. The loss of a loved one is always distressing, but the additional responsibility of managing the estate can quickly become overwhelming, especially under pressure from beneficiaries eager for their inheritance.
Why get an Executor Loan?
An Executor Loan provides the Executor with necessary funds to settle urgent matters. Thus, enabling them to function effectively to meet certain deadlines, and potentially bring efficiency savings to the Estate. For example: enabling them to meet immediate funeral and legal expenses or settle an inheritance tax bill (IHT) which is typically due within six months of death, but without the loan you can’t access the Estate’s funds to cover.
Other Potential Reasons for an Executor Loan:
1) Property in an Estate
As well as Credit Brokers, Niche Advice is active in the mortgage market so we see with clarity further benefits of an Executor Loan if the assets tied-up are property related – which they often are!
For example Executors often encounter properties that need immediate attention. An Executor Loan can fund necessary renovations, ensuring that the property does not decline in value or generate liability while waiting to be sold. By enhancing property conditions, Executors can maximise the estate’s value and ensure a fair distribution among beneficiaries.
2) Charges on outstanding Liabilities
Executors may face demands for repayment from financial institutions. An Executor Loan can help clear these debts swiftly, alleviating pressure and preventing potential penalties from accruing while maintaining the estate’s financial health.
How does an Executor Loan work? How much can I borrow?
The Lender will look at the asset value within the Estate. They will want these to have been appraised recently. In the case of a property then it would need to have been valued by a Surveyor. This level of proceeds will enable them to set the amount they will lend to you but it’s unlikely to exceed 70% of the Estate value. There will also be a minimum advance depending on the provider, typically £10,000.
It’s valued against the Estate so is based on the contents of the decrease’s Will. It is NOT directly “secured” against an individual property or asset.
There are NOT personal guarantees / liability taken against you as the Executor.
Can anyone apply for an Executor Loan?
The loan provider will normally want you to be engaging with a Solicitor or Trust Corporation on probate. The deceased and you will needs to be UK residents.
How quick can you get an Executor Loan?
It normally takes a couple of weeks to arrange if there is a Will in place. If there is NOT a will in place and the deceased has died intestate a professional search would need to take place allowing around a month for responses. As the Loan Providers want you to be engaging with a legal firm on probate often this search has already been undertaken.
How are the proceeds of an Executor Loan disbursed?
It will be depend on the loan provider but for the preference if to pay the claimant directly. For example, if the Executor loan is £50,000, £40,000 for tax and £10,000 for something general such as funeral costs – HMRC will be paid £40,000 directly and £10,000 will go to you as the Executor.
What are the costs of an Executor Loan?
Interest charge: Interest charge will be charged on the amount borrowed. This will be applied to the initial advance leaving no ongoing monthly payments to make. This is otherwise known as “retained interest”. For example, on a £15,000 loan request the interest charged might be £3,000. So the total loan to be repaid will effectively be £18,000 but you only get £15,000 to use / in your pocket.
Admin fee: There is normally 2% (£10,000 maximum) of loan providers administration costs.
Broker fee: We charge £499 for overseeing the process. This is payable when the loan provider advances the proceeds.
How is the repayment of the Executor Loan made?
This is normally only payable to the loan provider when the estate is settled.
What are the next steps?
If you’re navigating the complexities of estate management, an Executor Loan could provide the financial relief you need. Contact us today for a compassionate discussion about how we can assist you during this challenging time. We’re here to help you ensure a smooth transition and effective estate management.
Free, No-Obligation Quote today!
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