What do I Need to Know When Accepting an Inheritance?

Inheriting money from a loved one after they pass is special gift, but the responsibility of receiving a large sum of money can also have certain implications. Estrada Legal P.C. is able to help those who inherit money from a loved one understand the legal aspects of inheriting money.

 

Consider Every Option

When a loved one passes, take time to grieve and consider every option. Before taking the inheritance and spending it frivolously, consider using the inheritance to plan for your own future. An inheritance is a special gift and losing a loved one is hard. Taking to time to heal is the first rule of inheriting, because once the grieving process is over you will be able to make more rational decisions.

Create A Living Trust

Instead of spending all of your inheritance you may want to use the money to create a living trust. If you have children you can create Education Trusts and save the money to send the kids to college. Using an inheritance to plan for your own future is a great way to accept the gift of money from a loved one.

Understanding Taxes

If your inheritance comes in the form of an IRA you must be aware that pulling out all of the funds will cost you money in the end. For every dollar you pull out the IRS will have to pay full income taxes. It may be wise to take advantage of certain “stretch out” provisions and minimize the taxes you will have to pay.

Estrada-Legal, PC

Estrada Legal is capable of helping people who receive large inheritances plan for their futures. Simply stated, we believe your family is your most important asset.

Creating a living trust is a great way to guarantee the money you receive is used wisely. Our staff is also available to offer advice on how to accept an inheritance with the least amount of tax implications possible. Please contact us today so we can help you create an estate plan that best fits your needs.

Image abcnews.go.com