How Does an Advancement Work?

An advancement is a special gift made by a parent to his or her child that is an "advance" of that child's share in a future inheritance. The advancement is normally parent to child, but people can offer this gift to any person that they wish to include in their will. Normally, when someone asks for an advancement, it is because he or she needs the money right away and the current need is stronger than a future one would be. Advancements can only exist if the person who is offering these gifts has a will that details how his or her estate will be divided in the future. A person does not technically have any heirs until their death. Yet if you know who your heirs will be, you can notify them and give them money earlier on.

It is very important to remember that the individual who owns the estate has no obligation to give a future heir an advancement. They can choose to do this on their own terms. Sometimes a person's estate may be mostly tied up in property and investments, and they may not have a lot of cash to hand out in the form of advancements. Also, the estate owner is under no obligation to commit to people that he or she wants to will her estate to, prior to creating a valid will. That will can be modified to account for changes, if the estate owner determines that he or she wants to include or exclude someone.

There is no way that a person can add an advancement into a will. This is because the will will only be recognized that the time that the estate owner passes away, and an advancement means that you are giving away your finances to an heir before you have died. If you receive an advance, then the estate administrator for the decedent will take that into account. That means that your share of the inheritance after the person dies will be smaller than it would have been, had you waited. This is the way things are dealt with because of the equal distribution laws, which make sure that anyone listed in a will gets an equal share unless the decedent wrote otherwise. For some people, it is worth it to get money when you are in a tight spot and forego a large inheritance later on. In other situations, it is best to just wait until you are eligible to inherit all of your money.

Each state has its own way of dealing with an advancement. Some courts will uphold that any sort of lifetime gift that a parent grants a child will be considered an advancement on an inheritance. In other states, the judge may demand that the decedent wrote a letter or signed a document saying that he or she was giving a child or beneficiary an advancement before it is legally recognized. This is because some parents or grandparents may want to give their children a sizeable amount of money without considering it a part of their future heritage. The Uniform Probate Code abides by this procedure. Some states don't recognize that any sort of lifetime gift is an advancement.

Advancements sometimes cause confusion when it comes to dwindling assets. Sometimes a person will leave behind fewer resources than he or she expected to. Because of this, an advancement given to one child may be more than the other children can even receive as an inheritance. Let's say, for example, that a child asks for an advancement which is granted by his father for $12,000. When the dad dies, he leaves behind $20,000 to be split between this child and a younger sister. Originally, the father thought that he would have twice as many assets when he passed away. In this case, the son who received the advance will not inherit anything else, and the daughter will be given the rest of the estate. This is because he already had his share and more. Luckily for him, he doesn't have to give any of his money to his sister to even out the deal. Talk to a probate attorney if you have more questions about advancements.