An Upcoming Inheritance
Your Dad died last month. You know that you are in line to get a sizable inheritance. While you are saddened by his death, the inheritance couldn't come at a better time because you are behind on your mortgage and need money to catch up before it goes into foreclosure. You talk to the personal representative (also known as the executor) and he tells you that it will be at least six months before all his accounts, bills and other obligations are sorted out and his estate is distributed.
What Can You Do?
You are anguished. Is there anything that can be done legally to get access now to that inheritance that you need so desperately?
Can You Legally Receive Your Money Faster?
Under Minnesota law, there are at least four ways you can get at least part of your inheritance or estate assets before the estate is wrapped up sometime in the future.
First of all, there is the family allowance. If you were financially dependent on your Dad for your livelihood or if your Mother is alive, there may be available up to $1500 per month for living expenses.
Secondly, if it appears that the estate will have sufficient resources to pay all of your Dad's financial obligations, the personal representative can decide to distribute a cash advance to the heirs of the estate. This is rare, however. A personal representative is often reluctant to dole out advances because unknown bills or future fluctuations in asset value can sometimes turn an ample estate into one with limited assets. And no personal representative wants to go back to heirs and ask them to refund advances on inheritances that the personal representative had previously given out!
A third way to get funds from the estate is by making a claim on the estate. This can happen if you had loaned some money or if you did some work or gave your Dad some items of personal property. In this case, you may be able to make a claim on his estate that the personal representative may have to pay. Claims by family members against a parent's estate are sometimes viewed with suspicion by personal representatives or the probate court but it is one more way that you may be able to get some cash from the estate before the estate is finally wrapped up.
A fourth way to get cash is to get a loan, usually from an inheritance funding company, and assign the company part or all of your inheritance. Of course the company wants to know that your inheritance is virtually certain and that there will be sufficient funds to pay the assigned inheritance when the estate is finally settled. Another disadvantage is that these companies usually charge significant fees for this service. When an heir needs funds immediately or an estate is not going to be closed soon, the heir can often get access to his or her inheritance although it may be at a high price.
Options In Minnesota
These are four options to get access to an inheritance before final distribution of the estate. Since a good deal of money and sometimes financial risk is involved for the heir before he or she can get access to a share of the estate, it is always wise to consult with an experienced probate attorney before selecting any of these options.
The contents of this article are for information only and is not to be interpreted as legal advice. For personal legal advice you should consult with an attorney who is experienced in probate law or estate planning. The U.S. Treasury Department requires us to advise you that any written tax advice cannot be used and is not intended to be used by any taxpayer for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code. Written advice from our firm relating to any Federal Tax matters may not, without our express written consent, be used in promoting, marketing or recommending any entity, investment plan or arrangement to any taxpayer.