Dealing with the death of a loved one can be a very difficult time for individuals. They need plenty of space and time to work through their grief, and there is also a lot of paperwork that goes into a death.
For instance, you will need to register your loved one’s passing with the authorities and will need to deal with a lot of legalities. One of these legalities is the inheritance. The deceased should have left their last will and testament to let their final wishes be known. In this will, they will have outlined how their estate should be split up and shared between their next of kin.
Inheritance can bring some comfort to people, but there will still be the burden of grief to bear. While you are going through this sad period, you will need to try and be level-headed about how you deal with any inheritance that comes your way. If you are careful, there are some ways you can sidestep some of the issues that inheritance can bring. Read on to find out more.
What if there isn’t a will?
More often than not, there will be a last will and testament that will explain how the deceased’s estate is to be divided. This is a great aid as it can prevent any family members squabbling about who gets what. However, in the event that there isn’t, there are some ways you can ease any potential arguments.
But the first thing to remember is that you and your family won’t get to decide who gets what – it is up to the law to split up the individual’s estate. If the deceased was married, then their partner will receive the majority of their estate. If their spouse is also deceased, then their estate will pass to their children.
Unfortunately, if your partner dies but you were not married or in a civil partnership, then they aren’t legally entitled to your estate. Not only that, though, but inheritance tax is a lot higher if a will is not left behind. So, as you can see, it’s really important that you speak to a lawyer and write your will before it’s too late.
What to do with inherited property?
Sometimes, it isn’t just money that you will inherit. The deceased might leave behind some property, for example. If you do inherit a piece of property, what you do with it will depend on your current situation. For instance, if you already own your own house then you probably won’t have any need for this new one. In this case, you might want to sell or rent out your inherited property. However, if you are currently renting your house or apartment, then you might want to move into the house that you have inherited.
You should remember that you might end up in a position in which you aren’t the only person who ends up inheriting the property. For instance, this often occurs when the deceased is survived by a few children. The siblings could inherit the property and, therefore, they will each have an equal share in the house.
This is when things start to get complicated as each sibling might have a different idea of what to do with the house. Most of the time, though, one sibling will buy out all of the others so that they have 100% ownership of the property. However, if you are not able to come to an agreement about who should buy who out, then you might need to get some lawyers involved as this is a decision that will need to be taken to court for a judge to have the final say.
Dealing with inheritance tax
One of the most frustrating things with inheritance is the tax that you will have to pay on any money or property that come into your possession. If you inherit less than a certain amount, then you might not be expected to pay any. But, for the majority of people, they will inherit above the threshold and so will need to send some cash to the tax man.
There are some ways around all this, though. These tips can help you lower the final amount of inheritance tax that you will be required to pay.
Leave something to charity
If you leave a sum of your inheritance to charity, then this will bring down the final total of your inheritance. However, in order to take advantage of this benefit, you will need to leave at least 10 per cent of the estate that you inherit to a charity. This can be any charity of your choice or, if you prefer, you might want to split the donation across a number of charitable organizations. By doing this, it means that your favourite charity will benefit as well as you.
Speak to an accountant
It’s worth hiring a high net worth accountant if it looks like you stand to amass a large sum of money through inheritance. They will be able to give you some very explicit advice on how you can bring down your tax bill. It might be difficult for you to do so on your own if you inherit such a huge amount. Not only that, though, but they will be able to give you investment guidance and some tips on how to manage your new sum of cash.
Buy a life insurance policy
Another way to bring down your inheritance tax bill is to get yourself some new life insurance. Ok, so this won’t help to reduce the inheritance tax bill, but it will make it easier for your family to continue with payments if anything were to ever happen to you unexpectedly. That’s because the insurance will pay out and ensure their financial security.
— MGM Benefits Group (@MGMBenGroup) January 11, 2018
As you can see, there is a lot that you need to take in and process when you inherit part or all of a deceased individual’s estate. Hopefully, this blog post has given you plenty of useful information.