What You Need to Know About Inheritance Before Diving In
When it comes to taboo conversations, death and finances might just be neck and neck for top spot. Combined in the form of inheritance, it can create an unbearably messy form of life admin at an already emotional time. So whether you're writing your will and feeling lost in inheritance decisions, or embroiled in a messy inheritance dispute amongst the family, we aim to provide some practical information relevant to you. Shedding light on what inheritance is, how to distribute your estate, and what to do as a beneficiary.
What is inheritance?
Inheritance is about how the assets and debts of the deceased are distributed amongst heihttps://craft.safewill.com/admin/entries/blog/51685-what-you-need-to-know-about-inheritance-how-it-works?site=default#rs. A will created by the deceased will leave directions on this distribution for when they pass; covering everything from property to pets, leftover money, superannuation, and investment funds. This might be to one person, or between multiple children or loved ones.
What's the Law on Inheritance?
Where there's a Will, this provides a legally binded roadmap for the transfer of assets after a death. A person can however challenge this distribution, on ‘moral grounds’ that the deceased had an obligation to provide for them.
When there's no will, the law will often grant assets to the partner and children of the deceased by default. Grant of letters can be submitted to the supreme court to distribute the estate amongst other partners. If there's no relatives and no Will, the deceased’s estate will be transferred to the government.
If Your'e Writing your own Will:
How to make decisions on dividing your assets?
Beneficiaries can include family members, friends or charities. In deciding who gets what, it's important to consider what you think of as ‘fair’ and whether you want your estate to be divided equally between beneficiaries or not. This can involve considering the age of the beneficiaries, any potential family businesses, or any personality factors impacting heirloom or sentimental possession distribution.
How to assign your assets
Once you’ve made these decisions, it's time to assign respective assets to specific beneficiaries with specific and clear instructions. There are several different ways you can choose to do this:
Sell: instruct your'e executor to sell all assets and use the money to distribute amongst beneficiaries at set percentages.
Assign Assets Individually: assign specific assets to specific beneficiaries. Including property, businesses, investments or family heirlooms. This can be a better choice if you’d like to pass on more than money to your loved ones.
Leave it to the executor: leave instructions and criteria for your executor of will to distribute remaining assets. This can be a messy option, as can leave more space open for disputes and family disagreements.
If Your'e a Beneficiary
How to Collect Inheritance?
Obtain the death certificate
Request life insurance contracts
Request authorised copy of Will (if there is one)
Carry out inventory of assets & debts (Evaluate any debts and remaining assets to determine the net value of inheritance before you accept it).
5. Liquidate assets & adjudicate inheritance
What about Inheritance Tax?
Australia has no tax law of inheritance. Meaning any assets passed down by family members, including financial or property, are not taxed. There is however tax on any changes to the financial position of the inheritor from e.g. income generated from inherited assets. In contrast, superannuation of the deceased is assessed on an individual basis, and paid out either all at once or in chunks.
To Wrap Up
Get started with Safewill today; to safeguard your legacy, protect your distribution wishes and avoid nasty family disputes. For a one-to-one discussion with one of our experts to talk through your options, give us a call on 1800 103 310 , or start a chat with us online.