How advisers and solicitors can spot inheritance liquidity challenges earlier

A liquidity problem rarely arrives labelled as a liquidity problem.

In my experience, nobody calls their adviser or solicitor and says, “I think we have an inheritance liquidity issue.”

They say the house is taking longer than expected to sell, a beneficiary mentions they’re waiting for their inheritance before they can clear their mortgage, an executor says they’ve been covering some of the estate costs themselves for the time being.

None of those things automatically mean there’s a problem, but they would make me ask more questions. 

Listen to what the client is actually telling you

There are certain phrases I’d pay attention to.

“We should be able to pay it once the house sells.” “The money’s there, it’s just tied up.” “We’re hoping probate will be through soon.” “I’ll clear the debt when my inheritance comes through.” “We don’t really want to sell the property, but we might have to.”

I hear versions of these conversations regularly at Provira.

On their own, they don’t necessarily mean an Estate Advance or Inheritance Advance is needed. But they might be telling you that somebody’s plans are relying on money that isn’t currently accessible.

That’s when I’d want to understand a bit more. What are they waiting for? When do they need the money? And what happens if it isn’t available by then?

Often, those three questions are enough to tell you whether there’s a potential liquidity issue sitting underneath the conversation.

Look for a mismatch between two dates

I think one of the easiest ways to look at inheritance liquidity is as a mismatch between two dates.

There’s the date somebody needs the money, then there’s the date the money is realistically going to become available. Those dates don’t always line up.

A beneficiary might need a deposit for a property in eight weeks, but their inheritance isn’t expected to come through for another six months.

An estate might have ongoing property, mortgage, IHT or professional costs while the cash available to pay them is running down.

Whenever I see those two timelines moving apart, I’d want to know what happens in the gap. Sometimes there’s already enough cash available and there isn’t a problem, but if there isn’t, that’s when it becomes worth talking about the options.

Ask what happens if everything takes twice as long

People are understandably optimistic about probate.

“The property will hopefully sell quickly.” “Probate should be through soon.” “The estate might be ready to distribute in a few months.”

And sometimes everything does go according to plan. But I wouldn’t build a client’s financial plans around the best-case scenario. One question I’d ask is: what happens if this takes twice as long as everyone hopes?

If the answer is “not very much”, great.

But what if the executor runs short of cash to pay estate expenses? What if the beneficiary loses the property they were planning to buy? What if they spend another six months paying interest on debt they were expecting to clear?

You don’t need to know exactly how long an estate will take to work out where a delay could cause a problem for your client.

Watch for the need for cash starting to drive decisions

For me, this is one of the biggest warning signs.

Sometimes a liquidity problem doesn’t show up as a bill somebody can’t pay. It shows up in the decisions they’re starting to make because they need cash.

Maybe an executor is considering accepting a lower offer on a house because the estate needs money, maybe a family is talking about selling an asset they would otherwise have preferred to keep. Or, maybe a beneficiary has started looking at personal loans because the inheritance they expected to use is still tied up.

That’s when I’d start asking whether the lack of available cash is pushing somebody towards a decision they wouldn’t make otherwise.

You don’t need to work out the solution yourself

I think this is important, especially because inheritance finance still isn’t something every adviser or solicitor deals with regularly.

You don’t need to decide that a client needs an Estate Advance or Inheritance Advance before speaking to us. I’d be looking for three things.

First, is there value in the estate or a known inheritance? 

Second, is there a genuine need for money faster? 

And third, is there a gap between when the money is needed and when it’s likely to become accessible?

If the answer to those questions is yes, it’s worth having a conversation.

An Estate Advance may be useful where an executor needs access to estate funds for IHT or other liabilities before assets can be sold.

An Inheritance Advance may be the right option where a beneficiary needs access to part of their inheritance before probate completes.

At Provira, we’re always happy to act as a sounding board. If you’ve spotted one of these warning signs in a client’s situation, book a call with our team and talk us through the case.

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.