After a loved one dies, they may leave you some of their assets. When this occurs, certain legal obligations take place as well as personal decisions you must make. Understanding what to do with assets can help you.
What to Do With the Money
One of the most common assets left to beneficiaries is money. When deciding what to do with the money you’ve inherited, you should take time to pause. The recent death of a loved one doesn’t leave you in the best mindset for making major decisions. Take your time and seek professional advice if you choose. When you do begin making decisions, there are a couple of potential options. You can add money to your savings or emergency fund. If you want to grow the money, you can invest it (preferably make low-risk investments). The money could also go toward paying off debts, adding to a college fund, or paying off your mortgage.
What Taxes You Owe
Even though your loved one is leaving you with an asset, you may also be responsible for some taxes. This is especially true with inherited property. If you choose to sell the property, you are subject to capital gains taxes. Your capital gains depend on the value of the asset at the time of death. You will pay taxes on the difference between the value of the home and the amount it was sold for. There are also other taxes that you may need to pay depending on what assets you receive. You should seek legal counsel to know exactly what you may owe.
When You Need to Make Decisions
The grieving period after a loved one passes can make it difficult to begin managing the assets you receive. You may not want to sell a home or clear out belongings right away. However, it’s important to keep in mind what decisions need to be made quickly. For example, if you are left with money from a retirement account, you may only have a certain amount of time to withdraw that money. If you inherit a home, you may need to sell it quickly. There are time limits on some assets and if you wait too long you could miss out on benefits or end up with a more difficult process.
There are several different types of assets you can receive after a loved one passes. They all offer different benefits and may also come with some responsibilities. You should know what to expect from an inheritance.
Check out this article on how to make things easy for your loved ones when you die!
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