What happens when you inherit Property and Assets?

When it comes to inheritance, there may be financial opportunity, but emotions can run high, and the process can soon become confusing. Whether you’re receiving a family home, bank accounts, investments, or personal belongings, it’s essential to understand the legal, tax, and financial implications.

To help guide you through the legal minefield, we have outlined some of the key steps and considerations that come with inheritance.

When a loved one dies, the Will nominates executors in charge of handling the estate administration. The executors are responsible for notifying the beneficiaries and distributing any assets in accordance with the Will.

In the event there isn’t a Will in place, rules of intestacy come into play which determines who will receive what and the court will appoint an administrator to manage the distribution of assets.

Probate is the process of getting legal permission (‘Grant of Probate’ if there is a Will, ‘Letters of Administration’ when there is no valid will) to administer someone’s estate after their death and the distribution of assets in accordance with the Will.

The executors must ensure they understand what assets are pass under the Will and where to find/access them.

Inherited assets can include:

• Property and Land
• Financial accounts (bank accounts, stocks, retirement accounts)
• Personal property (jewellery, vehicles, art)
• Business interests
• Payments under life insurance, pensions and death in service also need to be considered

Dependent on the type of assets, the transfer may require probate. In some cases, assets such as jointly owned property and joint accounts have predetermined beneficiaries and will not need Probate in order to be transferred.

Before anything is transferred to the beneficiaries, any liabilities such as debts or taxes must be paid out of the estate. These include:

• Debts and liabilities (e.g., mortgages, credit card debt)
• Inheritance tax
• Income taxes owed by the deceased and for the estate in the administration period (i.e. on interest earned)
• Capital gains taxes (if any assets appreciated during the administration period in value are sold)

The executors should consult a legal professional or an accountant to ensure they fulfil any tax responsibilities as failing to pay the correct taxes owed can have serious and costly consequences.

As a beneficiary, you may become the new owner of certain assets. The process of transferring these to a new owner can vary dependent on the type of asset. For example:

• Land or Property – You may need to file a new deed or follow a specific process to transfer the title.
• Bank or investment accounts – Dependent on the provider, you may be required to provide a death certificate and/or other documentation to prove you are to be the new owner or cash in the account.
• Vehicles – You will need to follow the Transfer of Ownership process through the DVLA.
• Pensions and Life Insurance – Similarly to bank accounts, you may be required to provide certain documents as proof of ownership.

Once you have acquired legal ownership, what you do with the asset or property is up to you. It is wise to speak to a financial adviser to discuss the best options to manage your inheritance.

In some cases, there may be instructions set out in the Will about what they wish to happen to certain assets once they have been passed onto the beneficiaries.

When the time comes to distribute assets, family feuds can occur particularly if the Will is unclear or certain individuals believe it to be unfair. In cases of a dispute, mediation or legal advice may be used to resolve a conflict early.

If you feel the Will is unfair or has been created under suspicious circumstances, you can read our dedicated blog 7 Steps to Contesting a Will for guidance on what steps you can take and how we can help.

While navigating inheritance can be complicated, professionals like Solicitors and Financial Advisors can help guide you through the necessary processes and ensure you stay legally compliant, and the wishes of the deceased are followed if legally viable.

The team at Backhouse Solicitors understand it’s a sensitive time and we are here to help. Just contact us to book your free initial consultation with one of our friendly experts.

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