Creating an estate plan for one’s family can be a difficult and complex process. However, receiving an inheritance can be almost as difficult as creating an estate plan, as there may be many challenges and questions that arise.
When you receive an inheritance, you will have to consider the effect this will have on your taxes. Your inheritance may incur liability for property taxes or increase your own estate so that it will be subject to estate taxes. While you are not required to pay income tax on the principal inheritance, you will have to pay income tax on the income generated by the inherited funds. Especially if the inheritance is substantial, you may want to consult an estate planning attorney to discuss the tax implications.
In addition, you may be the nominated guardian of minor children or a nominated trustee responsible for holding assets in trust for their benefit. Also, your inheritance may be held in a trust of which you are the beneficiary; your receipt of the assets is subject to the terms of that trust. These terms can sometimes be confusing and you may need an attorney to help you sort through the technical trust provisions. If you do not get along with the appointed trustee, you may need mediation or even your own estate planning attorney.
To learn more about New York elder law or New York estate planning, visit http://www.littmankrooks.com