Quick answer
Inheritance and probate finance is a loan that helps beneficiaries or executors cover costs or buy out other beneficiaries while an estate is still being settled. It is often secured by estate property or the borrower's own home. Ownright Custom Finance arranges these loans Australia-wide, including private options when the estate is slow.
Key points
- Estates can take time, and bills and deadlines do not wait
- Executors may need funds for rates, insurance and maintenance
- Beneficiaries may want to keep a property by buying out siblings
- Security can come from the estate property or from the borrower's own assets
- Suits
- Executors, beneficiaries and families managing an estate
- Security
- Estate property or the borrower's own property
- Key evidence
- Will, grant of probate or administration, property details
- Australia-wide
- Yes
What is inheritance and probate finance?
When someone passes away, their estate does not turn into cash overnight. A will may need to be validated, a grant of probate or letters of administration obtained, debts settled and assets valued, sold or transferred. All that takes time, while rates, insurance, repairs and legal bills continue. Inheritance and probate finance bridges the gap.
It is used in two broad ways. An executor or beneficiary may borrow to cover costs or to access part of an expected inheritance. Or a beneficiary may borrow to buy out siblings or other beneficiaries so they can keep a family home. Both are specialised, and both benefit from a broker who is comfortable with estates.
Who uses this kind of finance?
- Executors who need to cover costs before assets can be sold
- Beneficiaries who want to keep an inherited home and buy out others
- Families who need cash for a settlement date on a purchase while waiting for the estate
- Beneficiaries with debts that are pressing, such as tax or arrears
- Siblings who agree to keep a property and share ownership differently
How do lenders view an estate?
Lenders see certainty and uncertainty. A grant of probate, a clear will, a single property and cooperative beneficiaries are all positives. A contested will, missing documents or many beneficiaries make the lender cautious.
| Situation | How it usually affects lending |
|---|---|
| Probate granted, clear will | Easier, the executor has authority and the shares are known |
| Estate still in progress | Lenders may rely on other security instead of the estate |
| Single property, sibling buy-out | Common and well understood |
| Contested will | Harder, often needs legal clarity first |
| Overseas assets | Adds time and paperwork |
What can be used as security?
Depending on the situation, the security can be the estate property, once the executor has authority to deal with it, or the borrower’s own property. A private lender may focus on that security and the plan to repay, rather than on the borrower’s income alone. Our guide on what is a private mortgage explains how that works, and the page on deceased estate finance gives a focused look at the property side.
What about tax on inherited property?
The ATO sets out how capital gains tax applies to inherited property, including rules about main residence treatment within a certain period after death and when extensions may be available. These rules depend on what the property was used for, who inherits and when it is sold. Your accountant is the right person to confirm. A loan that helps you hold the property while you decide may change the timeline, so it is worth getting tax advice before locking in a plan.
How does Ownright approach estate finance?
Ownright Custom Finance is about solutions when the usual path is slow or blocked. Trevor Scott has more than forty years in finance and the team approaches estate matters with patience. We work Australia-wide, and we are glad to speak with an executor’s solicitor.
We start by asking where the estate is up to, who is involved and what the money is for. We then decide whether a bank can meet the timeline or whether a private loan is a better first step, with a refinance planned for later. Where a sale of the property is coming, we explain how a short-term loan can be repaid from the proceeds. Speed depends on the lender, the security and how quickly documents arrive, and we say so upfront. See the short-term property loan page for how those loans work.
Illustrative example
An illustrative executor is managing an estate with one main property. Probate has been granted, but a sale is a few months away and the executor is covering insurance, rates and repairs out of pocket. One beneficiary wants to keep the home and buy out two siblings. A broker explains two paths: a short-term loan to cover costs until the sale, or a longer-term loan for the keeping beneficiary, with the siblings’ share paid out at transfer.
Mistakes to avoid
- Borrowing before the executor’s authority is clear
- Assuming every beneficiary agrees on the plan
- Overlooking tax advice on an inherited property
- Under-estimating estate costs and delays
- Taking a short-term loan without a clear way to repay it
Documents to have ready
- The will and, if granted, the probate or letters of administration
- Death certificate
- Property details, title search and any valuation
- Details of other beneficiaries and the agreed plan
- Your own income and identification
- Estate account details, if used
Our guide on how fast private lending can settle and the page on home equity loans are helpful companions.
How do sibling buy-outs usually work?
A sibling buy-out is one of the most common estate loans. One beneficiary wants to keep the family home, and the others agree to take their share in cash. The arrangement typically needs a figure everyone accepts, often supported by a valuation, a written agreement and a solicitor to handle the transfer. The lender then assesses the borrower on their own income and the property as security.
A few practical points tend to decide whether it runs smoothly. The share must be paid at transfer, so the finance has to be ready on the day. Any other estate debts, such as outstanding rates or a loan on the property, need to be cleared or refinanced in the same step. And if one beneficiary is unsure, it is better to delay a few weeks than to sign something that falls over. Our page on property purchase loans explains the mainstream lending side.
What if the inheritance is not property?
Not every estate is a house. Shares, a business, a super death benefit, valuables or cash all raise different questions. Lenders tend to be more comfortable with property as security than with assets whose value moves. If the inheritance is a business, a business succession finance approach may be relevant. If it is mostly cash that has not yet been released, the gap is often about timing, and a short-term loan secured by your own property may be considered.
Are there special risks to understand?
Yes. A loan taken against an expected inheritance depends on the estate delivering what you expect, and estates can disappoint. Debts, costs, claims and disputes can all shrink what is left. A prudent borrower plans for a smaller inheritance, and for a longer wait than hoped. A short-term loan also needs a clear repayment source, such as a property sale. We talk through these risks openly, because a good loan is one you can still manage if the estate takes longer than planned.
Need finance while an estate is sorted?
Sounds like you’re looking for inheritance or probate finance with understanding. We’re the lending experts in estate-related lending, so click the button and see if you qualify. Ring 03 7043 7233 any time you would like to talk it through.
How it works, step by step
- 1
Step 1
Tell us who the borrower is, where the estate is up to and what the money is for.
- 2
Step 2
We check the paperwork needed, including the grant or the will.
- 3
Step 3
We approach lenders who understand estates and can work with the timeline.
- 4
Step 4
We coordinate with the solicitor or executor until settlement.
Frequently asked questions
Can I borrow against an inheritance before the estate is finalised?
Sometimes. Lenders are cautious because the amount and timing of an inheritance can be uncertain until probate or administration is complete. Some will lend against a property or against your own assets while you wait. A private option may suit if the estate is slow. The details depend on the will and the estate.
What is probate?
Probate is a court-issued grant that confirms a will is valid and gives the executor authority to deal with the estate. Where there is no will, a similar process called letters of administration applies. Rules and court procedures are set by each state or territory, and a solicitor can explain what applies.
Can I buy out my siblings from an inherited home?
Often, if the property is worth enough and your income can support the loan. The lender needs to know the agreed buy-out figure and how the property will be transferred. A family agreement, or a court-approved arrangement if there is a dispute, usually underpins the figure. We help line up the finance.
Is there tax on an inherited property?
The ATO has specific rules on capital gains tax for inherited property, including rules about main residence treatment within a certain period after death. These are complex and depend on the facts. Your accountant should confirm how they apply to the estate and the beneficiaries before decisions are made.
Can an executor borrow for estate expenses?
Sometimes, particularly against estate property, but the executor's powers and the will matter. Typical expenses include rates, insurance, maintenance and legal costs. The lender will want to see the grant or other authority. Speak with the estate's solicitor and we can discuss the lending structure.
What if the will is being contested?
That makes lending harder, because the outcome and timing are uncertain. Some private lenders may still consider a loan secured on another asset, depending on circumstances. It is a question for your solicitor first. Once the legal position is clear, we can look at what finance fits.