Whether you’re about to receive an inheritance or you’ve already received your inheritance, you may already be wondering exactly what to know about inheritance law. Inheritance law can be a tricky thing, especially if you don’t know a lot about it already. Especially because inheritance often comes at a difficult time, it can sometimes be hard to make the best decisions for you and your family. However, you can learn about how to manage an inheritance in a way that aligns with your family’s needs and values, as everyone is different and has unique circumstances.
If you’re wondering exactly what to do when you receive an inheritance, there are so many ways that things can go. That’s why it’s important to get informed before you make any large and rash decisions. From dealing with taxes to deciding where to allocate the funds, inheriting money can sometimes be stressful, which is why it’s important to stay informed and seek support where you need it. Here are a few things you need to know when it comes to management and legality for your inheritance.
Taxes are one of the first things that people think about when they receive an inheritance, and that’s because you will likely need to pay taxes on an inheritance if you’ve received one. There are some exceptions to this rule, as life insurance payouts are usually tax-free and inheritance from a spouse can sometimes come without a tax requirement. However, for the most part, you’ll need to pay taxes on any subsequent earnings from an inheritance and sometimes on the assets you inherit.
If you’re already in the inheritance process, you may already be aware of the mechanics of probate and probate court. If you’re not, probate court is the part of the judicial system that addresses and distributes the property, assets, and debts of the recently deceased through a process called probate. If you want to avoid probate court, you can get a cash advance on your inheritance or even avoid it altogether by working with an expert who can advise you.
When it comes to handling your money once you actually have the inheritance, one of the best decisions you can make is to put your funds into an insured account. If your money exceeds the usual insured limit — around $250,000 for NCUA or FDIC — you can set up multiple insured accounts so your money stays protected. If you’re planning not to use your money and to save it for something specific, this can be the best way to go. If you’re setting up multiple accounts, you will likely need to go through separate institutions to garner the highest security for your assets.
If you’re planning to invest — which you likely should, in some form — working with a financial advisor is crucial to making sure you get the most out of your money. Investing can also take so many forms — from retirement accounts to the stock market. The forms of investing that are right for you will depend on a variety of life circumstances, and it’s always best to involve a professional.
You may also be asking — what shouldn’t you do with your money? Just like there are a lot of things you can do, there are also plenty of bad decisions out there in the mix. Among the most popular bad decisions, don’t quit your job just because you received an inheritance, don’t act rashly and don’t spend all of the money at once.
Managing Your Inheritance
There are so many ways to manage the legal and financial elements of your inheritance. From the taxes to the probate process, staying informed will get you far. Talk with professionals who can help you out and make sure you think through your decisions carefully. That way, you can make your money go further and do everything by the books.
About the Author
Ginger Abbot writes about learning, living, and exploring for college students, graduates and professionals. Read more of her work on Classrooms.com, where she serves as Editor.