Executor Loans and Estate Expenses Explained

An executor loan is borrowing taken out by the personal representatives to cover the cost of running an estate before the grant of probate releases any money. It is also sold as an estate expenses loan, an estate loan or probate funding. The labels differ; the product is the same.

Estates are frequently asset-rich and cash-poor. The bills start arriving within weeks of the death, and none of them wait for the grant. This guide explains what these loans cover, who can apply, what to check before you sign, and the free routes worth ruling out first. It applies to England and Wales.

You can compare probate loan companies through this site. There is no charge to you and no obligation to proceed.

What an estate expenses loan covers

This is the practical question, and it is where executor loans differ from every other kind of borrowing. The money is for the estate’s running costs, not for the executor and not for the beneficiaries. A beneficiary wanting early access to their own share needs an inheritance advance instead, which is a different product taken out against one share rather than against the estate.

Typically that means:

• Funeral costs. Often the first and most urgent bill, and one that falls due long before any estate money is accessible. Most banks will settle a funeral director’s invoice directly from the deceased’s account, so ask before you borrow.
• Property insurance and maintenance. An empty property usually needs specialist unoccupied cover, and standard policies often lapse after a set period of vacancy. Add heating, garden upkeep and security.
• Valuations. Property valuations, chattels valuations and share valuations are all needed for the inheritance tax account.
• Professional fees. Solicitors, accountants and tax advisers. Our guide to how much solicitors charge for probate sets out the likely range.
• Probate application fees and the cost of official copies of the grant.
• Inheritance tax, although that is usually handled as a separate product. See inheritance tax loans.
• Repairs needed before a sale, where the property cannot realistically be marketed as it stands.

Costs of this kind, properly incurred, are testamentary expenses, payable from the estate before anything is distributed to beneficiaries.

Who can apply

The borrower is the personal representative, meaning the executor named in the will or the administrator where there is no will. Not the beneficiaries.

Lenders in this market generally assess the estate rather than your personal income, though many will still run a credit check. What they look at:

• The value and liquidity of the estate, and whether there is a clear asset to repay from
• A realistic repayment route, usually a property sale or the distribution itself
• Whether the estate is solvent, which matters enormously and is covered below
• Whether all personal representatives agree, since where there is more than one they will normally all need to sign
• Whether the will or the law gives you power to borrow. The Administration of Estates Act 1925 gives personal representatives power to raise money by mortgage or charge, but a poorly drafted will can complicate it

You will not usually be personally liable

This is one of the main attractions of estate lending, and it is worth being clear about.

An estate is not a legal person, so an executor signs the agreement in their own name. But these facilities are normally written on a no personal recourse basis. The loan is repaid out of estate assets, ahead of anything passing to beneficiaries, and if the estate turns out to be worth less than expected you are not asked to make up the shortfall. There are no monthly payments, no charge over your own home, and the decision is based on the value of the estate rather than your credit file.

This is why providers expect a solicitor or professional probate administrator to be handling the estate. The solicitor verifies the value of the estate and repays the loan from estate funds, and that is what gives the lender the comfort to lend without looking to you personally.

Every probate loan company on our panel lends on this basis. Not every probate loan company does. No personal recourse is a term of the contract rather than a rule of law, so it is worth checking before you sign anywhere. Our guide to the questions to ask a probate finance provider sets out how to put it to them.

One qualification. The protection assumes you keep to the agreement. Misstating the value of the estate, or distributing to beneficiaries before the loan has been repaid, can bring your own money back into play.

Personal representatives have the power to borrow for the administration and a right to be reimbursed from the estate for expenses properly incurred. With a facility repaid directly from estate assets, that right rarely has to be relied on.

Is an executor loan regulated?

Not every probate loan provider is regulated by the Financial Conduct Authority. We strongly recommend you only borrow from one that is.

Every provider on The Probate Network panel is FCA authorised. That is a condition of being on it, and you can verify any of them yourself on the Financial Services Register. Do the same with any provider you find elsewhere, before you send them anything.

Why it matters:

• You can take a complaint to the Ombudsman. This is the most important one. The Financial Ombudsman Service can consider complaints about lending by an FCA authorised firm, its service is free to you, and its decisions bind the firm. The test is the status of the lender, not the status of the particular agreement, so this holds even where the loan itself is not a regulated credit agreement. With an unauthorised provider the route does not exist.
• The firm must have a complaints procedure and must deal with your complaint within set timescales. An unauthorised lender owes you none of that.
• The firm is supervised. Authorisation means the FCA has assessed it and can act against it, and it means you can confirm on a public register that the business is what it claims to be.
• The alternative is the courts. Against an unregulated firm, your remedy is a county court claim at your own cost and risk.

One distinction worth understanding, because providers blur it. An authorised firm is not the same thing as a regulated agreement. A firm can be FCA authorised while a particular loan falls outside the consumer credit regime, most often where the credit exceeds £25,000 and is taken wholly or predominantly for a business carried on by the borrower. Below £25,000 that exemption cannot apply at all. And there is no exemption anywhere for executors, estates or probate, so if you are told a loan sits outside the rules simply because you are acting as a personal representative, that is wrong. Even on an exempt agreement you keep the court’s power to reopen an unfair credit relationship.

One thing is never available: borrowing is not covered by the Financial Services Compensation Scheme, regulated or not. If a provider suggests otherwise, look elsewhere.

So ask two separate questions of any provider: is the firm authorised, and is this particular agreement regulated?

What it costs, and how to compare

No regulator, government body or consumer organisation publishes cost data for these products. Any typical rate you see quoted online is a provider’s own marketing, which is why quoted figures vary so wildly. The comparison has to be done on the offers themselves.

The full cost picture:

• Monthly interest, and whether it is simple or compounded
• Arrangement or facility fee
• Valuation and legal fees, often for both sides
• Exit or redemption fee, and any minimum term
• Default interest if the estate takes longer than projected

On any interest-bearing product the total depends on how long the estate takes, and you do not control that. Probate delays, a slow property sale or an HMRC enquiry all add to the bill.

So ask every provider the same question, in writing: what is the total amount repayable, in pounds, if the estate settles in 6 months, 12 months and 24 months? A provider who will not put three plain figures in writing has told you something useful. Note that an APR only has to be quoted on a regulated agreement, so headline monthly percentages are not comparable across this market.

One relief worth knowing: personal representatives can claim income tax relief on interest paid on a loan taken out to pay inheritance tax, but only for a period ending within twelve months of the loan being made.

Before you borrow: the routes that cost nothing

Borrowing is not always necessary, and a good lender will not mind you asking. Work through these first:

• Ask the bank. Most will settle a funeral director’s invoice directly, and many will release funds before the grant at their own discretion. There is no legal threshold, so ring the bereavement team and ask.
• The Direct Payment Scheme lets a bank pay inheritance tax straight to HMRC from the deceased’s account before the grant. See our guide to IHT423 and the Direct Payment Scheme.
• Instalments and a grant on credit can deal with an inheritance tax bill without borrowing at all. Since 1 April 2024, HMRC no longer expects personal representatives to seek a commercial loan before applying for a grant on credit. The full list of alternatives is here.
• Your own money. An executor who pays an expense personally is entitled to be reimbursed from the estate.
• Beneficiaries lending to the estate, which costs nothing and keeps a third party out of the administration.

If those close the gap, you do not need to borrow at all.

When an executor loan may not be the right answer

Be cautious where the estate’s solvency is uncertain, where beneficiaries disagree about the borrowing, where a claim against the estate is likely, or where the sum needed is small enough that a bank’s discretionary release or your own funds would cover it. Borrowing against an estate that may not pay out is the situation that causes executors real harm.

How our introductions work

The Probate Network is an Introducer Appointed Representative for probate loan introductions, and we work with several probate loan providers in the UK. You can request information and quotes from participating providers through this website. We do not give financial advice and we do not recommend one lender over another. Our role is to put you in touch so you can compare what is on offer.

There is no charge to you for an introduction and no obligation to proceed. Every lending decision is the provider’s. If you would like advice on the estate rather than the borrowing, you can find a probate legal advisor through this site.

Frequently asked questions

What is an executor loan?

An executor loan is borrowing taken out by the personal representatives of an estate to cover its running costs before the grant of probate releases any money. It is also sold as an estate expenses loan, an estate loan or probate funding. It is repaid from the estate, usually on distribution or from a property sale.

What can an estate expenses loan be used for?

Funeral costs, insurance and maintenance of an empty property, valuations, solicitors and other professional fees, probate application fees, repairs needed before a sale, and sometimes inheritance tax. The money is for the estate’s costs, not for the executor personally and not for the beneficiaries.

Am I personally liable for an executor loan?

Normally no. The probate loan companies on our panel lend without personal recourse. The loan is repaid from estate assets ahead of the beneficiaries, and you are not asked to make up a shortfall if the estate turns out to be worth less than expected. That is why providers expect a solicitor or professional administrator to be handling the estate. It is a term of the contract rather than a rule of law, so check the wording before you sign, and note that the protection assumes you keep to the agreement.

Do executors need a credit check for an estate loan?

It depends on the lender. These products are generally assessed on the estate rather than on the executor’s income, but many providers still run a credit check as part of their process. Ask before you apply if that matters to you.

Are executor loans regulated by the FCA?

Not every provider in this market is authorised. We strongly recommend you only borrow from an FCA authorised firm, and every provider on The Probate Network panel is FCA authorised. That matters most because the Financial Ombudsman Service can consider complaints about lending by an authorised firm, free to you and binding on the firm, even where the particular agreement is not itself a regulated credit agreement. Authorisation of the firm and regulation of the agreement are two different things, so ask both questions. There is no exemption from consumer credit regulation simply because the borrower is an executor. Borrowing is never covered by the Financial Services Compensation Scheme.

Is there a cheaper alternative to an executor loan?

Often. Most banks will pay a funeral director’s invoice directly and many release funds before the grant at their own discretion. Where the problem is inheritance tax, the Direct Payment Scheme, payment by installments and a grant on credit can all deal with it without borrowing. Since 1 April 2024 HMRC has not expected personal representatives to seek a commercial loan before applying for a grant on credit.

The Probate Network introduces customers to third-party providers of finance. We are not a lender and we do not provide credit. This article is for general guidance only and applies to England and Wales. It does not constitute legal, tax or financial advice, and it is not a recommendation of any product or provider. Borrowing carries risk, including personal liability for executors. Lending is subject to status and the provider’s own criteria. Rules, thresholds and provider terms change. For advice on your own circumstances, speak to a qualified professional. You can book a free legal consultation through The Probate Network.