Inheritance is the practice of passing on property, titles, debts, and obligations upon the death of an individual. In other words, an inheritance is what you leave behind when you die. You can leave your inheritance to a person, a family or even a company, charity, or institution.
Apart from money, an heir can inherit property, valuables, and any assets that the decedent owned at the time of his or her death. You can set up your inheritance to go to one person or several and they do not always have to be your family. Some laws that cover inheritance make allowance for spouses and children so that they are entitled to a portion of the inheritance.
If there are people who feel that they were cheated out of their inheritance, they can contest the will and try to "break" the will to get their share.
How It Works
If the deceased person has a will, then it is validated and the heirs are contacted. Assets named in the will are verified such as bank accounts, stocks, bonds, and the monetary value of any real property. If there are any outstanding debts on the estate, they need to be settled. If there is no will, the estate still has to go through probate so that debts are settled. Each state has its own law in such cases, but the spouse invariably gets a share of the property. If there are no children, the surviving spouse gets the full inheritance. In case there are children, the division is based on the number of dependents.
The most obvious benefit of planning your inheritance is the elimination of the undesirable results of an unplanned inheritance. If you don't have a will or living trusts, your heirs will have to go through a lot of legal paperwork, lawyer's fees, and a waiting period, which can sometimes span up to six months or more, before they can claim their inheritance. So planning your inheritance helps you to protect your assets, minimize tax liabilities for your heirs, and avoid a potentially lengthy probate for the inheritor.
Planning your inheritance carefully, having the necessary legal documents drawn up, and making a will is important so that you are certain that your inheritance will end up in the right hands.
Planning the distribution of your inheritance upon the event of your death will cost whatever your lawyer charges to draw up the proper paperwork. If you've been left an inheritance, you'll probably need a lawyer to help you through the various tax laws surrounding the assets. Almost all inheritances carry a tax that must be paid to the government, sometimes amounting to a large chunk of the value of the inheritance.
It's never too early or late to start planning your inheritance. Once you have planned the will, you can revisit your will for any further adjustments in future.