Inheritance Process Guide

Losing a family member is almost always a devastating experience. The coping process becomes even more difficult if there’s inheritance involved, as not only you have to deal with the loss, but you also need to take all the necessary legal actions – which can be a tough nut to crack.

However, how exactly does it look? Who is involved in the inheritance process? What’s the difference between an inheritance process with and without a will? That’s what we are about to explain to you in this article. So, if you want to know more, just keep on reading.

The Inheritance Process When There Is a Will

The majority of inheritance processes involve a will. As experts from Probate Advance explain, a will is “a legal document that permits the property of an owner to be distributed upon death.” It states which assets should go to which beneficiary.

The assets are more than just money – they may include real estate, jewelry, stocks, family heirlooms, and so much more. To make sure that everything is divided properly, a person can simply make a list of all beneficiaries. If an item should go to a specific person, it has to be spelled out in the will.

In order to start the inheritance process, the will needs to be submitted to probate. The court will review the document, authorize an executor, and distribute the assets to beneficiaries as stated in the will. Before the transfer begins, the executor will settle all the debts the deceased person might have had.

The Inheritance Process When There Is No Will

When the deceased person didn’t leave a will, the inheritance process becomes more complicated.

In such a situation, the probate court will try its best to determine the wishes of the person who passed away – it will check whether the deceased had named beneficiaries on their stocks, brokerage accounts, bank accounts, or retirement plans. Things such as real estate and jewelry, however, are usually much more difficult to allocate.

Once that part of the inheritance process is completed, the court will appoint an administrator that will act as the executor and disseminate the assets. Depending on how complicated the situation is, it might take months or years for the process to settle.

Inheritance – Restrictions

Sometimes, the inheritance might have some restrictions, which is why, if you are one of the beneficiaries, you should read the fine print. For instance, the will writer might specify that the inheritance should be paid in small installments instead of all at once. They might also restrict the inheritance to certain uses – for instance, education.

Depending on what is written on the will, you might not receive the inheritance soon after the person who wrote it passed away, but rather once you reach a certain age or a milestone, such as marriage or college graduation.

Should the Heir Pay the Estate’s Debts?

Even if the collectors might try to collect the debts of a deceased person from their family, the truth is that they are not responsible for paying them – it’s the executor’s or the administrator’s duty. They have to settle all the debts before they distribute the rest of the estate among the beneficiaries.

Inheritance Taxes

Although there is no federal inheritance tax, six states impose one – those are Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.

In all of them, the spouse is exempt from paying the inheritance tax, while children and grandchildren are exempt in four of those states (not in Nebraska and Pennsylvania). When it comes to other relatives, such as siblings, uncles, aunts, sons-in-law, and daughters-in-law, the exemptions might vary from state to state. If you aren’t related to the deceased person, then you will probably have to face a higher inheritance tax.

The Bottom Line

When one of your loved ones passed away, the inheritance process is probably the last thing on your mind.

Unfortunately, this is something that needs to be started as soon as possible, as depending on how complicated the situation is, it might take a couple of months or years for the process to settle. A factor that plays a major role in how long the whole procedure takes is whether the deceased person left a will, or not.

We hope that after reading this article, you have a better understanding of how the inheritance process works, as well as who is a part of it, and how does the inheritance work – it should be enough to get you through the whole procedure without pressure.