It can be daunting when you receive a letter from a solicitor explaining that you are to inherit from an estate. You may be grieving the loss of a close friend or relative and there can be a lot of information to digest. Whether you have inherited a small legacy or you have been fortunate enough to come in to significant family wealth, there are some key things you should consider to help you plan what to do with your new assets.
Make or review your Will
It may be some time since you put your Will in place or you may not have got round to writing one. As the value or assets of your own estate will have changed it would be advisable to consider your own Will. By having a Will you keep control of who ultimately inherits your estate and you can provide protection for young or vulnerable beneficiaries. If you die without a Will the law will decide who will inherit your estate.
Put a Power of Attorney (PoA) in place
If you have come in to money you should considering granting a PoA, which would appoint someone to act on your behalf, including dealing with your financial affairs, in the event that you were incapable of doing so yourself.
Passing assets on to others
If you do not wish to take your full inheritance a solicitor can assist you with granting a Deed of Variation which allows your assets to be redirected to other people or organisations. If you receive money from an estate then gift it on to someone else, there may be tax implications.
Take financial advice
You should review what your short and long term financial goals are and whether it would be appropriate to invest your inherited funds. Although we cannot offer financial advice, we can recommend an independent advisor who could consider the benefits of investing the funds or putting money in to a personal pension.
Consider using Trusts
Trusts enable assets to be placed outside your estate while allowing you to retain an element of control. You may also wish to set up a Trust if you want to pass on funds to someone who would be unable to manage their own affairs at present, for example a young child. Trusts are straightforward to set up and may provide tax planning opportunities if you have inherited a significant sum.
Discharge your Mortgage
Some clients use inherited money to pay off a mortgage and if you decide this is the best option for you, you will need to instruct a Solicitor to prepare a document to discharge the security and remove this from your Title Deeds.
Check your insurance policies
If it is not cash that you have inherited but an asset such as a property or jewellery, you may need to inform your insurance provider and have these items added to your contents insurance. You would be required to obtain a separate house insurance policy if you are the new owner of a property.
Seek advice from a family lawyer
If you are in a relationship when you inherit money, it may be sensible to protect your new assets in the event of a future separation by way of a prenuptial or postnuptial agreement. In such circumstances, you should seek advice from an experienced family a lawyer who can guide you through the process.
Our private client team and family lawyers would be happy to advise you on your options if you find yourself in this situation.
