BFS has reported a spike in probate enquiries and cases with an increased number of clients using bridging to access funds tied up in probate in line with Age UK’s ‘Free Wills Month’.
This trend is aligned with an upturn in clients exploring alternative ways of sourcing short-term finance to plug an immediate funding gap.
Lee Gilmore of BFS explained: “Finalising a will is not always as straightforward as it should be. While the ownership of various assets might be simple enough to resolve, the average person will take on a network of debt and credits which must be settled. For instance, inheritance tax might force the liquidation of valuable assets below market value.
“As with a bridging loan for a typical property purchase, a probate bridging loan can be used to pay off debts almost immediately, negating the immediate need to sell assets as quickly as possible. “
BFS can release funds to beneficiaries within 7-10 days, making way for a controlled property sale, maximising its value to avoid a potential fire-sale, and allowing the beneficiary to instantaneously access funds left by relatives.
A bridging loan for probate is very similar to a standard bridging loan. It is a short, fixed-term loan secured against a property asset. The critical difference between BFS bridging loans and those of a traditional lender is speed, and funds can be released in a matter of days – rather than weeks or months.
A recent probate loan saw a mother and son client securing a £1.1million bridging loan to settle an outstaring Inheritance Tax bill. The client and her son resided on the property, which had been originally owned by their grandfather. Following his passing, our client inherited the property and, with it a considerable Inheritance tax bill which needed to be settled before probate was granted.
For our clients to remain in their homes, a loan of £1.1 million was obtained, the inheritance tax debt was settled, and the client could now proceed with a traditional mortgage application to repay our loan.
However complex, Lee continued: “This bridging loan agreement does highlight the different ways in which bridging funding can be utilised and secured. Bridging is typically associated with property purchase, yet this isn’t necessarily the case and can help clients manage debt relating to tax.”
“Our experienced team is knowledgeable and professional and incredibly sensitive to probate issues. As more and more people become aware of the potential and scope for bridging, we see more enquiries from clients that sit outside a traditional client base.”