June 12, 2020
Lending money against the proceeds of a lawsuit is commonplace in personal injury litigation and is increasingly being applied in other areas of the law. Law firms are also using specialized legal finance to help offset the cost to fund disbursements for cases from inception to conclusion, freeing up the firm’s money to be used elsewhere. The good news is that this is now available to estate beneficiaries [“Beneficiaries”] awaiting funds from an estate, estate executors, and estate lawyers.
Although quite common in the U.S., the notion of borrowing against an inheritance is a relatively new concept in Canada and the market is ready. Beneficiaries awaiting funds, especially those with matters delayed by court closures, are increasingly looking for alternatives. In recent months, the calls from Beneficiaries seeking funds while awaiting an estate distribution have increased dramatically.
The Waiting Game
Beneficiaries are often forced to wait months, if not years, while the estate of a loved one is made ready for distribution. In many cases, their entitlement is clear but the duration to payout is not. For these clients, the delay in receiving funds can be frustrating. They may wish to buy a house, a car, or take a trip. They may be in financial need and unable to pay their bills or cover their kids’ tuition. Life does not stop while they wait. Inheritance loans are just one way they can accelerate these goals while the estate lawyer does what they do best, without the added pressure of the Beneficiaries breathing down their necks.
At the same time, estate executors have a legal and fiduciary duty to maximize the value of an estate. In some cases, they may be forced to sue for the recovery of an asset. Whether the executor is acting in a personal or professional capacity, they often do not have the resources, or are otherwise prevented from using their funds to pay for the costs of litigation. In these cases, access to finance is critical to allowing them to fulfill their duties and maximize the recovery for the benefit of beneficiaries.
Lastly, estate lawyers have the option to fund their individual files with access to credit to cover disbursements while they await payment. Litigation does not come cheap. For some firms, tying up their resources to carry these cases is simply not an option and clients with meritorious cases who cannot afford to pay as you go get turned away. Imagine how many more cases a lawyer could take on if the cost to run them was covered in the interim?
Never has the need for new files been more of a concern. Taking advantage of credit arrangements to fund disbursements is an easy and efficient way for an estates lawyer to expand their practice without changing a thing.
This is the beginning of an exciting new era for Wills and Estates lawyers to build and evolve their practices. BridgePoint has been helping law firms and their clients with their funding needs for more than a decade and we look forward to speaking with you about this opportunity. Contact us today.All Blog Posts