What is a probate loan?
A probate loan is financing secured by real property that is moving through the probate process, giving heirs or the estate access to cash before probate closes and the property formally transfers. It’s used to cover urgent estate costs, pay off existing debt on the property, or distribute an advance to heirs without waiting months or years for probate to finalize.
How It Works
- The estate or personal representative (executor/administrator) typically applies, often with court approval depending on the estate’s authority under California’s Independent Administration of Estates Act.
- The loan is secured by the probate property itself, based on its value rather than the heirs’ personal income.
- Funds cover estate taxes, creditor claims, property upkeep, or a cash advance to heirs.
- Repayment happens at property sale or refinance once probate closes and title transfers.
Who Uses This Loan
- Executors who need cash to maintain, insure, or repair a probate property before it can be sold
- Heirs who want funds now rather than waiting for a lengthy probate timeline
- Estates with outstanding mortgage payments that must continue during probate
- Families trying to avoid a forced or rushed property sale