Beck, Lenox & Stolzer Estate Planning and Elder Law, LLC, works hard to insure the appropriate distribution of assets when a client has passed away, assuming we did the legal work. Kiplinger’s recent article entitled “Getting an Inheritance? Here Are 4 Things to Consider” says you can’t always know exactly what’s left in a will. However, if you’ve received or anticipate receiving some type of inheritance, there are a few things you need to know if you’re getting an inheritance.
- Expect the Process to Take Time. Settling an estate is a big task. When the decedent’s affairs aren’t in order, it’s an even greater task. The executor (the person appointed to administer the will) must notify beneficiaries and interested parties, pay outstanding debts, close accounts, take an inventory of assets and determine if any of the assets not part of the will must go through probate. They must file with the IRS to pay taxes. After this, the assets finally can be distributed to close the estate. As a beneficiary, you calling the attorney’s office or the executor within days of someone’s death is not practical and will not yield positive results.
- Create a Plan for the Money. This is an opportunity to put the money toward some practicalities, including ways to help protect your future. Think about building up your emergency fund, paying off high-interest debt and saving for long-term goals. After you address your financial priorities and future needs, it’s fine to begin thinking about spending the money on something fun.
- Get Advice from an Experienced Estate Planning Attorney. The rules on inheriting assets can be complex, like when inheritors may have what’s called a step-up-in-basis provision for taxes. This lets the heirs set the valuation of their inherited property equal to its fair market value at the date of death – instead of the lower price at which it was purchased. This helps minimize capital gains taxes on inherited assets that have appreciated over time. There may also be state estate and inheritance taxes to consider.
- Take Time to Review Your Own Estate Plan. Make your own estate administration as easy as possible after you are gone. This includes keeping clear records of all your accounts, along with any estate plan documents including trusts, wills, powers of attorney and advance health care directives. Don’t forget about digital accounts and passwords as well. You should keep them all in a location accessible to those responsible for administering your estate.
Beck, Lenox & Stolzer can help you create your own estate plan, as well as review things you need to know if you’re getting an inheritance. Schedule a free phone call with one of our attorneys here.
Reference: Kiplinger (Jan. 9, 2023) “Getting an Inheritance? Here Are 4 Things to Consider”
