There are two types of inheritance. One is genetics of course, and the other is assets. Inheritance of assets can be something that your family passes on during their lifetime, or in the event of their death. Typically, inheritance is something that you can gift someone when you pass, and it may be cash, precious items (such as jewellery, stocks or bonds) or even property.
The easiest way to be in control of who you pass your estate and assets on to, is to record your inheritance wishes in a will, and store this somewhere safe where your loved ones can find it. If you haven’t started writing your will yet, Waseeya has easy to use guides to help you get started. And a great online Vault to help you store it somewhere safe and accessible once you’re done.
Inheritance at a glance:
- Inheritance describes assets that are passed onto another person after someone dies.
- It can refer to cash, stocks and bonds, precious items (like jewellery or cars), and property.
- Some inheritances may be subject to inheritance tax.
- Inheritance is usually distributed according to a will. If someone dies without a will (or ‘intestate), then asset distribution is decided by the law of the land.
So, how does inheritance work?
When a person dies, someone will need to submit the person’s will to probate in order to start the process of distributing their will. The probate court then decides who is the executor of the will, so they can begin distributing assets to the beneficiaries; (those listed as benefiting from their inheritance). The court will also settle any outstanding debts before they make the transfer.
What is inheritance tax?
Some assets may be subject to inheritance tax. This is a tax that’s applied to the property, money and possessions of someone who’s died, typically 40% of what is above the ‘nil rate band’ threshold.
You do not need to pay inheritance tax if:
- The estate value is below the £325,000 threshold.
- Everything above the £325,000 threshold is left to a partner, spouse, or charity.
It’s useful to keep track of your intentions for your estate, and keep all related documents together in a safe place. This will help your loved ones find what they need in an event that they might need access to.
The rules of intestacy
If someone dies without a will, or without a legally valid will, then the state will need to follow the rules of intestacy when it comes to who benefits from their estate. This means that the courts will decide who inherits all or part of the person’s estate based on intestacy.It can only be distributed between close relatives, or married or civil partners.
If someone dies without a valid will and there are no relatives who can inherit under the rules of intestacy, the estate will pass to the Crown. The Treasury Solicitor is then responsible for dealing with the estate and can distribute it accordingly.
The Waseeya app lets you take control of your legacy. Don’t leave it to someone else to decide what happens next in your story. Write and store your will so that you can prepare and keep track of your assets and your beneficiaries, even as life evolves. Sign up for Waseeya for free to start writing your will and storing your important documents.