Death is a common experience for everyone. Losing a friend or loved one is no easy thing to go through, and it becomes even more complicated if you didn’t foresee it. Still, no matter the circumstance, you must deal with it in a healthy, constructive way. As you navigate the funeral, burial, and other details of your recent loss, remember to keep in mind any possible inheritances. Here are four things you must know about receiving an inheritance to help you manage it.
Understand the Basics
There’s a lot of legality in the inheritance process. Basically, there are some terms everyone must familiarize themselves with to understand what to expect better. These include the words probate, inheritor, will, estate, trust, executor, and debt. Probate refers to the entire legal process of distributing property or assets after a person’s death. Meanwhile, inheritors are those acquiring the inheritance via law or will. The will is the legal document permitting the distribution of assets to the inheritor. If there is no will present, intestacy laws determine who will inherit these assets. The estate is the property or assets the original owner leaves behind after they pass. Likewise, trusts are legal documents stating the distribution of assets among inheritors. Executors are people legally allowed to manage, secure, or gather the estate. They pay any unpaid debts following a recent death before the distribution of assets. Inheritors are not responsible for any lingering debts.
Plan What To Do With Your Acquired Assets
Once you understand the basic terminology and process, consider what to do with your newly acquired assets. These could be money, property, or physical belongings. While you take time to grieve your recent loss, it’s vital to keep this in mind. Save the assets for long-term financial stability in a bank or savings account. Put it towards your retirement or emergencies. You shouldn’t spend frivolously on unnecessary things. Instead, use the assets to pay rent, mortgage, utilities, medical bills, or student expenses. While you can use this money for a little pleasure, such as a vacation, new vehicle, or something else to better your livelihood, it’s better to use it towards major expenses.
Understand Potential Taxes or Costs
When acquiring new assets, though, one major thing you must know about receiving an inheritance is that there may be attributed taxes or costs with it. This is especially true if you inherit property. When receiving property, you must navigate estate tax and inheritance tax. The deceased’s assets will cover estate tax. But depending on where you live, you may face inheritance tax relative to the amount of money you received in the inheritance. As a result, you may want to consider selling an inherited property.
Take Your Time to Grieve
Lastly, take this time to grieve your recent loss. Death is a hard subject to deal with, so talk with friends, family, and loved ones so that you can mourn for the person and respect the recent events. These tips are important to keep in mind, but they should not deter you from navigating the funeral, burial, and sitting process. Certainly, dealing with death is an emotional burden. You may feel confused, upset, or depressed. It’s okay to take time when deciding what to do with new inheritances.