The Info Treasure Trove

In these rough economic times, the gift a loved one leaves for you when he or she passes on can really make a difference. Many heirs in the Birmingham area are discovering that their inheritance is helping them avoid financial ruin during this economic downturn and period of high unemployment.

What is the key to managing your inheritance effectively and responsibly? The first thing an heir should be aware of is the probate process and the possible implications of estate taxes. Not familiar with the term “probate” or what the process may entail? When a person dies, ownership (known as the legal title) of his or her assets, property and personal effects must be passed on or legally transferred to the beneficiaries (or heirs) listed in the will. “Probate” is the name given to this set of legal processes. Navigating the probate process knowledgably, quickly and efficiently is the first key to the responsible management of your inheritance.

Another issue to be aware of is the estate tax, which is a tax that is imposed on the transfer of the taxable portion of a deceased person’s estate. The estate tax applies whether such assets and property are transferred according to a will or according to the state laws that apply where the deceased resided. The estate tax is part of the unified gift and estate tax system that operates at the federal level in the United States. In addition to the estate tax at the federal level, many individual states also impose a tax on the transfer of estates, with the state version called either an estate tax or an inheritance tax.

So, if you are currently planning for your own heirs, make sure you understand the potential implications of the estate tax on what you plan to leave behind. And if you’ve recently received an inheritance from a deceased friend or loved one you need to have a thorough grasp on the probate process.