How to Handle an Inheritance
If you’ve been named as a beneficiary in a will, you’ll have plenty to look forward to – and lots to think about. When will you inherit? How much will it be? Will there be any tax to pay? And how can you make best use of your inheritance.
Both your solicitor and your financial adviser will come in useful here. These are the main points to consider in advance.
How soon will I inherit?
You won’t receive your inheritance as soon as the person dies – it can take up to a year for everything to be sorted out. This process is called probate and will take longer if there is a large estates, a more detailed will or other complicating circumstances. Even when things are straightforward, you should expect to wait at least six months.
If there is inheritance tax (IHT) to pay, this must be settled before probate is granted.
Who makes sure that the will is carried out?
The person responsible for carrying out the wishes in a will is the executor. This may well be you, even if you are also named as a beneficiary. The executor is responsible for gathering, valuing, calculating and distributing the assets of the estate and settling any debts, as well as paying any IHT bill.
If you are executor, you will probably want to engage the help of a solicitor to handle the practical side of things. This will save you a lot of time and will also ensure that all your duties are fulfilled correctly.
What if there is no will?
When someone close to you dies, check with their solicitor or their bank to see if there is a copy of the will available. If no will exists, you should seek advice from your own solicitor and try to obtain authority as an administrator (if you are a blood relative). Otherwise the assets will be distributed as per the Rules of Intestacy.
What should I do after receiving an inheritance?
This is the biggest question, and the nicest one to think about. If you receive a large sum of money or another large asset, such as a property, you’ll want to make the most of it and ensure the opportunity isn’t wasted.
Financial advice can be extremely useful here. Your adviser can help you consider your windfall in the context of your circumstances and plans as a whole. They can also help you to put the assets to good use. With a property, for instance, they can help you decide whether to sell it now or keep it as an investment, and help you put the practicalities in place. If you inherit a lump sum, they can help you decide how to make it work for you best – in savings, investments and perhaps also your pension.
If you would like to talk about any of the issues in this article or need more general help with your finances, please get in touch with us.
This article first appeared on Unbiased.