Inheritance Law
Most countries have an inheritance law regarding the bequests that a deceased person includes in a will or living trust. First of all, the will has to go through probate, which means that the will has to be validated to ensure that it really is the last will and testament. The heirs named in the will must be contacted and all the assets named in the will must be verified, such as bank accounts, stocks, bonds and the monetary value of any real property, such as cars or houses. All the debts associated with the estate must be settled first before any of the inheritances are dispersed. This gives time for any creditors to come forward that may have an uncollected debt on the estate.
Inheritance law requires that seven steps must be followed when a person dies leaving a will. First the executor of the estate has to identify all the deceased’s assets and collect them so they are protected. Creditors must be notified according to the law of each state and all claims must be paid promptly. Any claims that do not appear to be legitimate should be contested in order to avoid paying out unnecessary money. Any taxes owing on the estate also have to be paid in a timely manner.
When a person dies, it is also the job of the executor of the estate to inform the Social Securities Commission, insurance companies and credit card companies about the death to cancel the contracts. All papers, such as inventory of the estate, accounting and legal documents, have to be filed with the probate court to get a court order for the distribution of the inheritances. You also have to file the tax return and pay the final taxes. If inheritances are not adequately spelled out in the will, you may have to do further investigations to find out who gets what. It is also your job to supervise the handing out of the inheritance, attend the probate court and obtain a court order dispensing you from further responsibility once the proceedings conclude.
In cases where there is no will, the inheritance law states that the estate still has to go through probate so that any creditors will get paid. Each state has its own procedure to follow in the case where there is no will, but the end result is that the family members do get any inheritance that may exist in the estate. The normal procedure is that if there are no children, the surviving spouse automatically gets the full estate. If there are children, then the division depends on the number of dependants. For example, the spouse receives one-half of the estate if there is one child and one-third if there is more than one child. In the event of each partner holding separate properties, the spouse receives the full value of the estate if the deceased does not have any surviving brothers and sisters.
If there is property in more than one state, then probate hearings have to be held in each of these states. Since states tend to have different inheritance laws, this could really complicate the matter and you should have expert legal advice to help you get through the process. Unless the inheritance is very large, over $1.5 million, a recipient will not have to pay a tax. The $1.5 million is considered the exemption amount and it is only when the gross value of the estate exceeds this amount that taxes are due. In any case, you will have to file an inheritance tax return with detailed information regarding the assets.
