Can an Executor Get a Bridging Loan?

Being named as an executor brings responsibility - and sometimes urgent bills.

Learn how executor bridging loans can help you handle costs before probate completes.

Can an Executor Get a Bridging Loan?

Being named as an executor brings responsibility - and sometimes urgent bills.

Learn how executor bridging loans can help you handle costs before probate completes.

Being named as an executor of someone’s estate comes with significant responsibilities – and sometimes unexpected financial pressures.

If you’ve taken on this role, you might find yourself facing urgent estate expenses before you can access the estate’s funds.

From inheritance tax bills that need paying before probate is granted, to essential property maintenance costs, the timing gap between expenses and available funds can be challenging.

The good news is that yes, executors can get bridging loans to help manage estate expenses before probate completes. These short-term loans offer a way to handle urgent costs like inheritance tax, property maintenance, or legal fees without rushing to sell estate assets at reduced prices.

In this guide, we’ll look at how executor and estate loans work, who can apply for them, and what you need to consider before taking one out.

This article provides general information about probate and estate distribution. It is not legal advice. Every estate is unique, and laws can change. Always consult a qualified legal professional or probate specialist before making decisions about estate administration, tax or inheritance.

Understanding the Executor’s Role

When someone appoints you as an executor in their will, you’re taking on a legal role that carries real weight.

You’ll be in charge of sorting out their estate – which means gathering their assets, paying any debts and taxes, reporting to HMRC and sharing out what’s left to the beneficiaries.

At first glance, this might sound straightforward.

But there’s often a mismatch between when you need to pay bills and when you can access the estate’s money.

As an executor, you’ll need to pay the inheritance tax bill within six months of the person’s death. Yet you can’t sell property or access most assets until you get probate – which often takes nine months or longer.

You’re also responsible for protecting the estate’s value while probate goes through.

This could mean paying for security at an empty property, keeping up with mortgage payments, or maintaining insurance cover. These costs can add up quickly, and leaving them unpaid isn’t an option – you could be personally liable if the estate loses value through neglect.

Many executors find themselves caught between these pressing payment deadlines and frozen assets.

Take inheritance tax, for example.

If you’re handling an estate worth £800,000, you might need to find £190,000 in tax before you can even access the estate’s bank accounts or sell any property. Without proper funding, you might feel pressured to accept a quick, below-market offer on estate property just to meet tax deadlines.

This cash flow challenge is why many executors look into bridging loans.

They can provide a way to meet urgent payment needs while giving you time to sell estate assets at their full market value. But before considering any borrowing, you’ll need to be clear about your responsibilities and how the loan will be repaid.

What is an Executor Bridging Loan?

Executor bridging loans are short-term lending solutions designed specifically for estate administration.

They let you borrow money to pay urgent estate expenses before probate is granted, helping you avoid rushed property sales or dipping into your own pocket.

These loans work differently from regular bridging loans.

With a standard bridge loan, you’d need to own the property you’re using as security.

But as an executor, you can’t do this – the estate’s assets don’t come under your control yet. That’s why executor loans come with unique arrangements to work around this challenge.

You’ll find two main options when looking at executor loans.

Standard Bridge

First, there’s the standard executor bridge, which uses your own property as security.

While this might sound risky, it can work well if you’re confident about the estate’s value and timeline.

You borrow what you need, putting your home up as collateral.

Probate Loan

The second option is a specialist probate loan, secured against the estate itself rather than your personal assets.

Let’s look at a real-world example.

Sarah was named executor of her aunt’s estate, which included a £600,000 house in Surrey. She needed £140,000 for inheritance tax but couldn’t access the estate’s funds. Rather than accept a quick £500,000 offer on the house, she took out an executor loan secured against her own property.

This gave her time to sell the house at full value, covering both the tax bill and loan costs while preserving more money for the beneficiaries.

When it comes to security, lenders will want to see clear evidence of the estate’s value and your exit strategy – usually the sale of property or other assets. They’ll look closely at the estate accounts and any potential complications that could delay probate.

Some might ask for additional security, like a charge against estate assets once probate is granted.

Remember though – you’re not just borrowing money, you’re taking on a responsibility to the estate. Make sure you understand exactly how the loan will be repaid and that the costs are justified by the benefits to the estate.

Let’s talk bridging loans!

Book your free consultation today and let’s discuss how we can help you achieve your property goals.

Why Can’t an Executor Get a Bridging Loan Against the Estate Before Probate?

Before probate is granted, you legally can’t borrow against the estate’s assets.

Until you get the grant of probate, you don’t have the legal authority to deal with the estate’s property or assets. It’s a bit like trying to sell a house you don’t own yet.

You can’t sell it and you can’t use it as collateral.

Let’s say the estate includes a £500,000 house.

Even though you’re named as executor in the will, you can’t use this property as security for a loan until probate comes through. The property still legally belongs to the deceased person’s estate, not to you, so you can’t sign any legal documents relating to it.

That’s why loans before probate usually need to be secured against your own property instead.

Some specialist lenders offer probate loans that work differently – they’re secured against your right to inherit rather than specific assets.

Remember though, once you get probate, your options open up. You’ll then have the legal authority to use estate assets as security for a loan if needed.

When Might an Executor Need a Bridging Loan?

As an executor, you’ll often find yourself needing funds well before you can access the estate’s money.

The most common reason is inheritance tax – HMRC wants their share within six months, but probate usually takes longer. This timing gap can put you in a tight spot, especially with larger estates.

Empty properties can rack up surprising costs during probate.

You’ll need to keep up with mortgage payments, maintain insurance cover, and handle any emergency repairs. If pipes burst or the roof starts leaking, you can’t just leave it – that would reduce the estate’s value and could make you personally liable.

Legal fees and estate administration costs don’t wait for probate either.

Solicitors, accountants, and property valuers all need paying. Without ready cash, you might struggle to get the professional help needed to handle the estate properly.

Perhaps the biggest risk is feeling forced to sell estate property quickly and cheaply. Estate agents often approach executors with quick-sale offers well below market value. While these might seem tempting when you’re under pressure to raise funds, they can seriously reduce what’s left for the beneficiaries.

Some executors try using their own money to cover these costs, planning to claim it back later. But this can be risky – probate complications could tie up repayment for months.

Related reading: Can you get a loan to pay inheritance tax?

How Executor Bridging Loans Work

Getting to grips with executor bridging loans means understanding how they fit around the probate process.

Unlike regular loans, these are designed to handle the unique situation where you’re responsible for estate debts but can’t yet access any of the assets.

Most executor loans run for 12 months or less – they’re meant to cover the gap until probate completes and you can sell estate assets.

The estate will be charged interest, but most lenders allow this to ‘roll-up’ and paid at the end.

Security works in one of two ways.

You can use your own property as security, which often leads to better interest rates but puts your assets at risk. Or you might find a lender who’ll secure the loan against the estate itself, which protects you personally but usually costs more.

This second option is not possible until probate has been granted.

The relationship with probate shapes how these loans work.

Lenders will want to see the will, death certificate, and estate accounts. They’ll check that you have the right to act as executor and look closely at how you plan to repay the loan. Some will want their solicitors to talk directly with the estate’s solicitors to make sure everything’s properly arranged.

You’ll need a clear exit plan – usually selling property or releasing other estate assets. Make sure you’ve got backup options too. If property sales take longer than expected, you don’t want to end up in trouble with the lender.

Eligibility and Requirements

Being named as an executor in a will isn’t enough on its own to get a bridging loan – you’ll need to meet several other requirements too.

The main one is proving you’re officially entitled to act as executor. This means having the original will and death certificate, along with your own ID and proof of address.

Lenders will look closely at the estate itself. They’ll want to see a full list of assets and liabilities, including property valuations and any outstanding mortgages. If there are other executors named in the will, they’ll all need to agree to the loan – you can’t make this decision alone.

Your own financial situation matters if you’re using your property as security.

While lenders won’t judge you as strictly as high street banks might, they’ll still check your credit history and other financials.

The estate needs to be relatively straightforward.

If there are ongoing disputes about the will, or if you’re dealing with overseas assets, many lenders won’t be able to help. They’ll also want confirmation that you’ve applied for probate and an estimate of how long it might take.

Here’s what you’ll usually need to show a lender:

  • The original will naming you as executor
  • Death certificate
  • Your ID and proof of address
  • Estate accounts showing assets and debts
  • Property valuations
  • Inheritance tax calculations
  • Probate application confirmation
  • Your proposed exit strategy
  • Agreement from other executors
  • Proof you can afford any monthly payments

It helps to gather these documents early. The sooner you can show lenders a complete picture of the estate and your plans, the faster they can make a decision about your loan.

Read more: Bridging Loan Criteria & Eligibility

Application Process

The application process will depend on which type of loan you go for.

Own Property

If you’re using your own property as security, the process works like a standard bridging loan.

You’ll start with a chat with a broker about your plans. They’ll help you gather the paperwork – both for your property and the estate. You’ll need things like your house valuation, the will, death certificate, and estate accounts.

You should get a decision in principle within 24 hours and then be able to access the money in 2-4 weeks.

Solicitors are needed as the loan will be secured against your property, using either a first or second charge.

bridging loans

Probate Loan

Applying for a probate loan works differently.

These specialist loans relate only to the estate and are available pre-probate. There’s no need to put your own home up as security and no personal guarantee or personal liability.

You’ll need detailed information about estate assets and confirmation that probate is underway.

probate loans

Risk Considerations

Before taking out an executor loan, you need to think carefully about the risks involved.

Your main concern will be personal liability – if something goes wrong with the estate sale or probate takes much longer than expected, you could end up responsible for the loan payments.

The costs of bridging loans can be significant.

Interest adds up quickly, and there are usually arrangement fees and legal costs to consider. You’ll need to be confident that the benefits to the estate – like getting a better price for property or avoiding tax penalties – outweigh these expenses.

Your exit strategy needs to be solid.

Relying on a property sale? Make sure you’ve got backup plans in case the market slows down. Planning to refinance? Check the options well in advance. Some executors arrange a pre-approved mortgage or get promises from beneficiaries to help if needed.

The impact on the estate itself needs careful thought too.

While a loan might help you avoid selling assets quickly at low prices, it will reduce the final amount available to beneficiaries. Make sure you can justify your decisions – keeping clear records of why you chose to borrow and how it benefited the estate.

Getting good professional advice can help reduce these risks.

A solicitor who specialises in probate can spot potential problems early, while an experienced broker will help you find lenders with the most suitable terms for your situation.

Alternative Options

Before committing to a bridging loan, you’ll want to check out other ways to handle estate expenses.

HMRC, for example, offers payment plans for inheritance tax when it’s tied to property. You can pay in yearly instalments over ten years, though they’ll charge interest on the outstanding amount.

Some banks provide executor accounts that let you manage estate finances.

While these don’t give you extra money, they can make it easier to handle any accessible cash and keep estate expenses separate from your personal finances. Just be aware that setting up these accounts requires the original death certificate and will.

Professional executor services might be worth considering if you’re feeling overwhelmed.

Banks and solicitors can take on the executor role, handling all financial aspects including paying inheritance tax. However, their fees can be substantial – often a percentage of the estate’s value – which might be more than bridging loan costs.

Family members might be able to help too.

If beneficiaries have their own funds available, they could lend money to the estate. You’ll need to document any such arrangements properly and get everyone’s agreement in writing.

Some asset managers offer portfolio-based lending against investments in the estate. If the deceased held stocks or shares, you might be able to borrow against these rather than selling them at what could be an unfavourable time.

Selling other estate assets before property might be an option.

Valuable items like cars, jewellery, or artwork can sometimes be sold more quickly than houses. But make sure you get proper valuations first – rushed sales of valuable items rarely get the best prices.

Remember, that you can’t sell assets until probate is received.

How a Broker Can Help

Getting an executor bridging loan isn’t as simple as walking into your local bank branch.

Most high street lenders don’t offer these loans, and those that do often have very specific requirements. A broker who specialises in executor finance can make all the difference.

Brokers have connections with specialist lenders you won’t find on the high street.

They know which ones will consider different types of estates and security arrangements. This saves you time and helps you avoid applying to lenders who are unlikely to help.

They’ll also handle much of the paperwork and chase things up when needed. From getting property valuations to coordinating with solicitors, they can manage the process while you focus on your executor duties.

In Summary

As an executor you’re responsible for managing the estate before and after probate has been granted.

You need to pay bills and taxes, submit paperwork and maintain the value and condition of assets and property.

This can sometimes mean that a loan is needed, for most executors this is used to pay the IHT bill.

Whether you go for the bridging loan or probate loan, you’ll need to weigh up the costs and risks carefully.

Your next steps should be to:

  • Get a clear picture of the estate’s assets and debts
  • Work out exactly how much you need to borrow
  • Collect the key documents you’ll need
  • Speak with other executors and beneficiaries
  • Talk to a specialist broker about your options

Remember, every estate is different, and what works well in one situation might not suit another. Getting professional advice early on can help you make the right choice for your circumstances.

FAQ

Most bridging loans take 2-4 weeks from application to funding. This includes time for legal work and property valuations.

Probate loans can be ready in 1-2 weeks.

Yes, you can get a bridging loan before probate. The loan will need to be secured against your own property rather than estate assets.

Related reading: What is a Bridging Loan Secured Against?

If the loan is secured against your property, it will appear on your credit file. However, probate loans secured solely against the estate won’t affect your personal credit rating.

Related reading: Do You Need a Good Credit Score for a Bridging Loan?

Our lenders set their minimum loan at £150,000 for executor bridging loans. This reflects the costs involved in setting up the loan and the typical needs of estates facing inheritance tax bills.

Probate loans are available from £100,000.

Read more: How Much Can I Borrow on a Bridging Loan?

No. While interest is charged, this is repaid at the end, along with the original debt.

Probate loans can offer 50-60% of a beneficiaries share.

Bridging loans will be affected by your property value and any existing secured loans. Max LTV is usually 80%.

Read more: How Much Can I Borrow on a Bridging Loan?

Yes, you can use the loan for any legitimate estate expenses, including property maintenance, legal fees, or clearing existing debts. You’ll need to justify the spending as reasonable estate management.

Yes, you’ll need a solicitor to handle the legal aspects of the loan. Many lenders prefer you to use a solicitor with experience in executor bridging loans.

Read more: Do You Need a Solicitor for a Bridging Loan?

Still have more questions?

Just give us a call on 020 3488 5706 to speak with an expert.
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