When should brokers introduce estate finance to a client?

I think one of the biggest mistakes we make with estate finance is waiting until somebody actually needs it before talking about it.

By that point, the conversation normally sounds something like this: “there’s an Inheritance Tax bill that needs paying, most of the estate is tied up in property, probate can’t move forward and I don’t know where I’m going to find the money.”

Estate finance can absolutely help in that situation. In fact, we deal with cases like that at Provira all the time.

But I’d much rather an adviser had spotted the potential problem six months earlier. Not because I think clients should be taking out an Estate Advance before they need one, but because it’s always worth clients knowing which options exist before problems arise. 

After all, it’s much easier to find a solution when you’re not already under pressure!

I wouldn’t wait until there’s a liquidity problem

If you’re a broker or IFA, you’re probably having conversations that could flag these problems long before probate starts.

You might be talking to a client about their estate planning, their parents’ finances, an inheritance they’re expecting or what will happen to the family home. Those conversations tell you quite a lot.

If somebody tells you their mother has an estate worth £1.2 million, but £900,000 of that is tied up in her home, I’d immediately be thinking about liquidity.

Not because there’s necessarily going to be a problem. There may be plenty of other cash available elsewhere, but it would definitely prompt me to ask the question: If the estate needs cash before that property can be sold, where is it going to come from?

You don’t need to have the answer there and then. What you don’t want is for the executor to be asking themselves that question for the first time after somebody has died and there’s an IHT bill sitting in front of them gathering interest.

Look at where the wealth actually sits

I think estate value can sometimes give people a false sense of security.

You hear that somebody has an estate worth £1 million and instinctively think there will be more than enough money to deal with everything. There probably is enough value, but that’s not necessarily the same thing as having enough cash.

If £750,000 is tied up in the family home, another £150,000 is sitting in other assets that can’t easily be sold and there’s £100,000 in accessible cash, that estate can still run into a liquidity problem.

We’ve spoken about this a lot at Provira because it’s at the heart of many of the cases we see. The executor isn’t dealing with an estate that doesn’t have enough money, they’re dealing with an estate that can’t get to the money when they need it.

So whenever a client is talking about an estate that’s heavily weighted towards property, businesses or other illiquid assets, I’d want to understand how much cash is actually available as well.

Ask who is likely to be dealing with the estate

This is another conversation I’d have earlier. Who are the executors?

If it’s the client’s children, what position are they likely to be in if the estate suddenly needs £50,000 or £100,000?

Sometimes families have enough money personally to deal with that, sometimes they don’t. And even where they do, they may not want to put a huge amount of their own savings into an estate while they wait to be reimbursed.

I think that’s important. It’s easy to look at somebody with a good income, a valuable home and investments and assume finding £50,000 won’t be a problem. Having £50,000 of wealth and having £50,000 sitting around that you’re comfortable putting into somebody else’s estate are two very different things.

Don’t just ask whether there will be IHT

IHT is obviously one of the big reasons estate liquidity becomes an issue, but I wouldn’t make it the only thing you look for.

Estates have bills. There can be legal and professional fees, property costs, maintenance, insurance and other expenses that continue while probate is being dealt with.

Then there are the things nobody necessarily expected. A property takes longer to sell, work needs doing before it can go on the market, there’s a disagreement between beneficiaries, probate itself takes longer than everyone thought.

Individually, none of those things necessarily creates a major problem. But they can start to add up, especially where most of the estate’s wealth can’t yet be accessed.

So one of the questions I’d ask is: What costs could this estate need to pay before its main assets can be realised? You might find there’s more of a gap than anyone had noticed.

Sometimes the trigger will come before somebody dies

There’s another side to this that I think brokers and IFAs are particularly well placed to spot.

You may already know who is expecting to inherit. A client might tell you that they’re due to receive £300,000 from a parent’s estate and that they’re planning to use it to pay off their mortgage, buy a property or invest. Again, I’d start asking questions.

When do they expect to receive it? What are they planning to do with it? Does that plan have a deadline? And what happens if probate takes another six or twelve months?

We’ve seen beneficiaries who have plenty of money coming to them but can’t access it at the point they actually need it. That’s where an Inheritance Advance can potentially come into the conversation.

The important thing is that you’ve spotted the timing problem before the client has already lost the property they wanted to buy or spent another six months paying interest on debt they intended to clear.

So when would I raise estate finance?

I wouldn’t wait for a client to say, “I need a probate loan.” Most clients aren’t going to say that because many won’t know that estate finance exists.

I’d raise the subject whenever something in the conversation makes me question whether the timing of the money could become a problem.

That could be an estate with most of its wealth in property, a potentially big IHT liability or a beneficiary making plans around an inheritance that hasn’t arrived yet.

You don’t need to turn every one of those conversations into a referral to Provira. Sometimes you’ll ask a few questions and realise there’s plenty of accessible cash and nothing to worry about. That’s a good outcome too. The point is that you’ve checked.

Earlier conversations give clients more options

For me, that’s really what this comes down to.

Estate finance is useful when there’s already a liquidity problem, but it shouldn’t only be discussed once everybody is scrambling around trying to solve one.

If advisers start asking about liquidity earlier, they can work out where problems might crop up, explain the options and then leave the client to make a decision if and when those options become relevant.

At Provira, our Estate Advance can give executors access to some of the value tied up in an estate before the normal probate process releases it, while our Inheritance Advance can allow beneficiaries to access part of an expected inheritance faster.

That doesn’t mean either product will be right for every client. But the earlier you spot the potential problem, the more choices the client tends to have.

If you’re looking at a client’s circumstances and thinking, “There’s plenty of value here, but I’m not sure where the cash would come from if they needed it,” that’s exactly the sort of conversation we’re happy to have.

Book a call with the Provira team and talk us through the case. You don’t need to know whether estate finance is the answer before you call us. We can help you work out whether it’s an option worth keeping on the table.

About Provira

Provira is the UK’s most established provider of inheritance and estate advances, trusted by hundreds of financial advisers and brokers. We’ve supported thousands of families, advancing £20,000 to over £1 million to help cover IHT, legal fees and personal needs – quickly, securely, and without personal guarantees or property charges.

We work closely with introducers and can provide everything from referral copy to co-branded materials. All you need to do is make the introduction – we’ll take it from there.