What is Inheritance?
An inheritance includes those assets of an estate that are bequeathed, in whole or in part, to specific heirs.
How Does Inheritance Work?
The assets that comprise an estate are customarily transferred to individuals specified by name or relationship (e.g. "Howard Jones, III or "grandchild") in the will of the deceased. In the absence of a will, estate assets are transferred according to laws that protect the assets of the deceased (generally passing them to descendants in a specific order). Once transferred, an inheritance is heavily taxed.
For example, Jim's estate is worth $10,000. His will specifies that his son and daughter each receive $5000. Following Jim's death, the son and daughter each receive $5000. This is their inheritance.
Why Does Inheritance Matter?
An inheritance represents the material legacy an individual leaves behind after his death. In addition to the family dynamics involved in the transfer of an inheritance, there are significant tax implications for the inheritors depending on their circumstances and on the value of assets received.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
Many of us invest for one reason: to build a big enough nest egg for retirement. Good old-fashioned fund picking is the preferred route for many 401k and...Read More →
Ten years ago, the natural gas supply future looked bleak. In a 2003 speech, then-Federal Reserve Chairman Alan Greenspan said: "Today's tight natural gas markets have been a long time in...Read More →
By their names, these options strategies sound intriguing. Iron Butterfly. Iron Condor. Most investors, regardless of skill level, probably don't what these options strategies are about, but they...Read More →