If you are named the beneficiary in someone’s will, you are entitled to any assets they left you. There are a variety of assets you might encounter and they all come with their own pros and cons. Understanding common assets can help you decide what to do with the ones you inherit.
Retirement Accounts
Planning for retirement is an essential part of managing your finances. You want to be prepared for your future, especially since you likely won’t have a regular income anymore. It’s a good idea to have your own retirement plan in place. Of course, there are cases when a loved one leaves you their retirement account after they’ve passed.
This type of account can add to your own savings and give you an extra boost as you plan for the future. What you can do with your inherited account will depend on the type of account and your relationship with the deceased.
Real Estate
Many people will leave their homes or other property to their beneficiaries. If you have inherited any kind of property, you need to understand what happens next. In most cases, the will and home will need to go through probate which is a legal process in which property is administered to the beneficiaries under the supervision of the court. This can take several months to complete. Once the property has been transferred, you have two choices.
You can keep it or sell it. If you keep it, you need to determine if the mortgage has been paid off and how it will be paid if it hasn’t. You also need to keep in mind the cost of upkeep and renovations. Repairing an inherited home can take a lot of time and money. If you choose to sell, you will need to consider whether or not to renovate before selling. Selling to a cash buyer is a great option if you don’t want to make repairs to the property.
Money
You can inherit money in many different ways. It can be cash or it can be left to you via a trust fund, stocks, bonds, and more. When you receive cash, you need to know how you may be affected by taxes. Not all money is taxed, but the way you receive the cash will determine if you owe any taxes on it. One of the biggest mistakes people make when they inherit money is spending it too quickly or lavishly. Once you receive the money, make a plan for how you’re going to use it and try to use it slowly so it lasts.
An inheritance can affect you in many ways depending on the type of asset you are left with. Make sure you understand what your inheritance means. Most importantly, know what steps you need to follow after receiving it.
Did you enjoy this article? Here’s more to read: Important Benefits to Take Advantage of During Retirement