- Posted November 2, 2022
What to Think About When Receiving an Inheritance
When you are in the position to receive an inheritance, you probably have a lot going on in your life. It is important that you understand how that inheritance might impact you before you start making decisions about what to do with it. Navigating the complications of loss and inheritance can be a challenge, but make sure you make time to think about these important things according to our certified financial planner.
The Legal Process
To receive your inheritance, there is a legal process that you are going to need to go through. That process can be complicated, and if you haven’t dealt with it before, you might find it hard to understand. In general, the process will be simple if the person you are inheriting from had their estate planned effectively, in which case, the executor will take care of distributing assets appropriately. If, however, there is not a clear will, the estate may go into probate, which can complicate the process. If this happens, you may wish to consult with a legal professional and a certified financial planner who provides financial planning services.
It is also important to recognize that you may have to pay taxes on the inheritance you receive. A big part of this is dependent on the type and amount of your inheritance. The cost basis of an asset will reset upon an individual’s death. This can mean that you are responsible for more taxes because the cost of the inherited item has increased since the person purchased it in the first place. If the properties are put into a trust, this can help to avoid some of these problems and minimize the taxes you have to pay.
Your Relationship with the Other Party
Many of the things that will impact you after an inheritance will also be impacted by your relationship with the deceased party. In general, if you are married to the person you inherit from, you have fewer problems that you need to navigate. However, there are still specific situations you should be aware of, no matter how you and the other party are related. Understanding your relationship and how that impacts your inheritance will help things to move much more smoothly.
If you are receiving an inheritance, you might feel overwhelmed, and that’s okay. It is important that you give yourself time to understand the process and what you will be receiving. Having grace for yourself will make things much easier on you and the people you interact with.
Check out this article on how to get rid of an unwanted property fast!
Contact Tenpath Financial Group for certified financial planning services.