In Virginia, a simple will is the most basic estate planning document and can be a good choice for those who have no children under the age of 18, and have uncomplicated estates.
Receiving an inheritance can arrive with a mix of emotions. As it generally comes with the passing of someone close to you, there is usually sadness.
Of course, there also comes a time when it feels okay to enjoy the windfall that was left for you.
Complicating things further is how to handle the financial aspect of an inheritance. While it may seem straight forward, that would be an erroneous interpretation.
If you find yourself in this situation, read on for tips on how to best to handle an inheritance.
Deal with the Emotions First
There are a number of things in your life you need to put on hold when you go through the grieving process. How to handle an inheritance is definitely one of those things.
Even if the loss was one you had prepared for, sadness can trickle in as you come to terms with the actual event. The inheritance isn’t going anywhere and now is not the time to handle it.
Seek Professional Guidance
Even though an inheritance may be unexpected, it’s not the same as simply finding money or winning it. There are specific laws that affect how inheritances are handled, and those laws vary from state to state. Unless you have sufficient knowledge about the matter, it’s worth finding a professional who can provide you with it.
Don’t Forget About Taxes
As estate planning attorneys, we understand that planning ahead is the best way to deal with things like inheritance taxes. However, if you are the one inheriting assets, keep in mind that the money that comes from an inheritance is not free—meaning the taxman will be coming around eventually. It is extremely important that you ensure taxes are dealt with before you start making plans for or spending the money.
Consider Your Family
For many people, financial help like an inheritance only comes once in a lifetime. Now may be the time to make sure your family is cared for after your passing.
If you don’t already have life insurance, now is a good time to consider it. You may also decide that it makes sense to use the money to start trusts for your children, so they’ll have money waiting for them at a certain age. Click here to read more about setting up a trust.
Do What’s Best for You
When you receive an inheritance, it can actually be quite easy to forget that it’s your money and your decision what you do with it. There may be no shortage of people, from professionals to family members, reaching out to you with unsolicited advice and even requests.
Your inheritance may also have been in the form of a large holding in a specific company. This is quite common, especially if that company was started or owned by the deceased. As such, it can be tough considering taking that money away from the business.
Even the thought can make an individual feel guilty.
But you have to remember the money is yours now and only worth as much as you’re willing to do with it. If your deceased relative wanted the money to be kept in that company, they would have simply left it there. Do what’s right with the money by doing what’s best for you.
Sadly, gaining an inheritance comes at the price of losing a loved one. And though the accompanying sadness is very real, it’s only one of many factors that can make dealing with the inheritance a challenge. If you’ve inherited money from a relative who has passed away, review the above advice before making any decisions.