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Steps to Inherit

Steps to Inherit

As an heir, the steps you must take to obtain an inheritance depend on the type of inheritance process being used: probate, small estate, named beneficiary, or right of survivorship (see Rules of Inheritance).

How to Inherit via Probate

If you have been named in a will, or if there is no will and you are entitled to inherit via intestate succession, you will usually receive your inheritance 12-18 months after the death, via the probate process (see Estat  Settlement for details).

The Easy Way: One common approach to inheriting via probate is to simply sit back, let the legal system work, respond to any requests, and eventually (hopefully!) receive your inheritance.

The Thorough Way: If you’d like to be a little more involved, and keep an eye on the process to ensure everything goes smoothly:

  1. Ensure Executor Appointed: Normally, an executor will notify you that he or she has been appointed (or shortly will be), and that the estate settlement process is underway. If no one has been appointed after a reasonable waiting period (3-6 months), you can either encourage someone (such as an executor named in the will) to start the process, apply to become the executor yourself, or ask the court to appoint a third-party executor.
  2. Receive Notice of Probate: Once an executor has been appointed, if you do not receive notice that you are entitled to an inheritance, reach out directly to the executor, and if you do not receive a satisfactory, timely response, to the probate court (see below for finding the appropriate court).
  3. Maintain Executor Relationship: Try to maintain a good relationship with the executor, since he or she has significant discretionary power over the estate. Let the executor know if you have a preference for certain items to be included in your share, if you’d prefer that certain items be sold off (or not), and how you’d like your inheritance delivered. See also Working with Executors.
  4. Claim Family Entitlements: If you are a surviving spouse or dependent child, you may be entitled to certain rights (that supercede the will or intestate succession rules) that you need to proactively claim in the early staged of the settlement process if you want to exercise them. See Family Entitlements.
  5. Monitor Court Filings: Early on you should be able to see an Inventory Report, detailing all assets and debts of the estate. At the end of the process, you should be able to see a Final Accounting Report, which explains how the debts were resolved, what expenses (and income) were involved during estate administration, and the proposed distribution. In many states, the executor is required to directly send you copies of these reports.
  6. Receive Inheritance: Receive your inheritance and sign the distribution receipt. You may be asked to waive your future rights to sue: normally this request is just standard best practice on the part of the executor, but you should consider consulting a lawyer if you are unsure whether you want to waive those rights.
  7. Deal with Taxes: The good news is that by the time you receive your inheritance, the executor should have paid any taxes due
  8. Handle Creditor Complications (Rare): Finally, it’s rare, but an executor sometimes distributes something that should have been used to pay an estate obligation, and so it’s possible that a creditor will contact you to claim some or all of your inheritance (in which case, you may wish to consult a lawyer, and you should definitely check EstateExec’s Executor’s Guide to state-specific Debt Statutes of Limitation).

 

The Fast Way: If you really need or want your inheritance more quickly, there are commercial firms that can provide a portion of your inheritance in advance. These advances can be a godsend if you need the money right now, but they are expensive and will keep a significant portion of your ultimate inheritance for themselves, to cover their costs and their risks. With those caveats in mind, here are some resources that may be helpful:

  • Finder for Better Decisions — Explains inheritance advances and estate loans
  • Inheritance Funding — Perhaps the #1 source of inheritance loans while waiting for probate to complete
  • Probate Advance — Alternate source of cash advances for an estate or for an heir.

 

If at any stage along the way, something does not appear to be going correctly, you can talk to the executor about it, and if necessary, object to the probate court, or even file a civil lawsuit.

Small Estates

If the estate qualifies as small, you may be able to claim your inheritance directly from the current asset holder, following state-specific rules (in the decedent’s home state). In fact, if the estate is small, there may be no probate and thus no executor, so this approach may in fact be required if you want to obtain your inheritance (unless you wish to start the probate process yourself).

See Small Estates for state-specific steps for inheriting without going through probate.

Named Beneficiaries

If you are the named beneficiary of an asset that transfers automatically upon death (e.g., IRA, 401K, life insurance policy), there’s not much you need to do:

  1. Often the process will be initiated by someone else (such as an estate executor), but you can contact the asset holder directly, informing them of the death and supplying any documentation they need (such as a death certificate).
  2. You may have a choice of how to take delivery of your inheritance. For example, you may want to rollover an IRA into an IRA that you own. Such decisions can have important tax consequences, so if a retirement account is involved, you are advised to seek the advice of a financial advisor.
  3. Once you receive your inheritance, you can spend it, invest it, or do whatever you want with it. However, inherited retirement accounts do come with certain restrictions and tax obligations, so keep that in mind (see also IRS inherited IRA guidelines).

You can usually wrap up an inheritance via automated transfer in a few weeks.

Right of Survivorship

If you own property with someone else, with right of survivorship, that means that if one of the owners dies, the property automatically becomes owned solely by the other remaining owners. Property owned in this way does not enter the estate, and simply becomes owned (in theory) by the surviving owners. Such property is usually “registered” in some way, however, and you will probably want to clean up the paperwork at some point to remove the decedent’s name as an owner. For example, when dealing with real estate, you can usually just file an affidavit of survivorship with the recorder’s office to remove the decedent’s name from the title.