The beneficiary of an estate receives assets and rights as directed by the will. However, there are important responsibilities that come with the role as well. When following the last will and testament of a loved one, every detail matters. Read today’s blog from the trusted estate attorneys at Davidson Law Group to learn all the details about the beneficiary’s responsibilities.
Manage Inherited Assets Responsibly
When a beneficiary inherits assets, they’re responsible to manage those assets properly. Whether it’s cash, real estate or a family business, there is a personal responsibility — and sometimes a legal responsibility — to handle the assets in a responsible manner.
There may be detailed instructions in the will that direct the management of inherited assets. Such arrangements must be respected and followed by the beneficiaries. For personal and legal reasons, beneficiaries must manage inherited assets responsibly.
Handle the Taxes and Liabilities for Inherited Assets
Beneficiaries have a responsibility to properly handle any taxes and liabilities that may accompany inherited assets. There are many situations in which the taxation and liability of inherited assets can quickly become complicated, so it’s best to consult with a trusted estate attorney. Below are several examples of common inheritance tax and liability situations.
- As a beneficiary of an estate, you must pay the taxes associated with the income and assets you inherit.
- If you inherit an asset with associated liabilities, such as a mortgage on inherited real estate, you will be responsible for handling those liabilities.
- If you inherit a family business, there may be complicated taxes and financial liabilities associated with the business. Unless otherwise specified in the will or accompanying documents, you will be responsible for all taxes and liabilities.
Regardless of the taxes and liabilities associated with inherited assets, they’re likely to become the responsibility of the beneficiary. Just as inherited assets must be managed responsibly, so must inherited taxes and liabilities.
Related Post: Four Things to Know About Estate Taxes
Properly Manage Debts Associated with the Estate
The term abatement refers to the process of paying debts associated with an estate. Abatement must be completed before the remaining assets of the estate may be distributed to beneficiaries. With the guidance of the will executor and a trusted estate attorney, beneficiaries are responsible for handling any existing debts in an estate before claiming the remaining assets. There are many ways to mitigate the impact of debt on an estate, but every case is different. Consult with an experienced estate attorney to minimize the impact of debt on an estate and to fulfill your responsibility as a beneficiary.
Related Post: Advice for Dividing Estates Equally Among Beneficiaries
Reach Out to the Estate Attorneys at Davidson Law Group
If you have been named as a beneficiary in the will of a loved one, it’s important to know all the details about your rights and responsibilities. The trusted estate attorneys at Davidson Law Group are here to help. Contact us in Allen, Fort Worth, or Tyler for the experience you can count on.