If you stand to inherit from a loved one who has recently passed, you may be wondering about the inheritance payout process. Keep reading to learn more about when you’ll receive what is rightfully yours.
Inheritance Payout FAQ
Before an inheritance can be paid, the decedent’s affairs must be settled through a process called estate administration. An executor will be appointed to take inventory of assets. A family member may stand as executor or the decedent might have previously assigned a lawyer, accountant or bank institution to fulfill the role.
Once the inventory has been completed, the executor will pay off debts the decedent owed, then distribute the remaining assets according to the will.
A will controls the assets held in the decedent’s name. If they did not leave a will, each state has statutes and rules for how assets will be distributed, making the best guess for how the decedent would have wanted their property distributed.
There are a few different ways a beneficiary may be paid:
- Specific bequest: If the decedent left you a specific sum of money or piece of property, you’ll receive it soon after bills, debts and taxes have been paid.
- Trust fund: A decedent may choose to have the inheritance paid out through a type of trust fund. You may receive it in one lump sum at a certain time or in many lump sums over a specific period.
- Residuary estate: After debts and liabilities have been paid and specific gifts are given out, you’ll receive your percentage of the remaining final estate.
When and how you receive your inheritance money depends on various factors. A simple estate could be settled in as little as six months, meaning you would be paid relatively quickly. If the estate was complex, with a lot of assets or assets that are hard to value, it could take several years to settle.
Other factors that could lengthen the time it takes to receive an inheritance include:
- A required estate tax return.
- Disputes among the beneficiaries.
- Disagreements with creditors.
- Questions from the IRS.
Once the assets have been divided and distributed, you might face an inheritance tax. It depends on a variety of factors, such as:
- What state you live in.
- Your relationship to the decedent.
- The value of the assets you will receive.
An executor has a specific list of tasks to accomplish. Some must be completed before others, such as paying off any remaining debts, taxes and bills. Depending on the complexity of the estate, it could take anywhere from a few months to several years before the executor can distribute your inheritance.
Receive an Inheritance Advance From IFC
While the process of receiving an inheritance can be long, you can start using your inheritance now with an advance from IFC. Enjoy what’s rightfully yours when you request a free quote today.