Nevada does not have any laws against usury—charging very high interest rates—on loans to people expecting an inheritance or expecting a personal injury settlement. Some loan companies monitor probate filings and mail out offers to heirs to loan them money against their inheritance. The payback on the loan is often twice the amount loaned. If a person borrows from one of these outfits, the lender files a notice with the Court and the Court will not approve any settlement that does not include paying back the lender in full. Often the probate attorney does not learn of such a loan until the lender files its claim with the Court and mails the probate attorney a copy of its claim.
Why We Discourage Taking Out Loans on an Estate
We think of these lenders as legal loan sharks because of the very high interest rate. We discourage people from taking out these loans unless they absolutely have to.
In the worst situation, an heir whose cooperation is necessary to complete the probate, will end up owing so much money out of their inheritance that they lose interest in completing the probate. This could happen if the probate estate turns out to be worth much less than originally thought.