The subject of inheritance can be quite confusing – and, it can get even more convoluted if you’re sharing within a group of people. Hence, if you are working on succession planning in singapore, it’s a must that you know about how it works.
And, through this article, we will try to achieve precisely that – by offering you as much information about the inheritance law as possible. So, stay with us till the end!
What Is Inheritance, Really?
In essence, inheritance is the procedure by which the deceased person’s asset ownership gets transferred to that individual’s family members.
Usually, the person who has outlived the dead individual is termed as a “survivor.” And, if their name has been written in the will, they will be known as a beneficiary.
Mostly, the person, who’s making the will, decides which member will receive what through the paperwork. But, if they have decreased before making the will, a probate court will take the matter into hands and distribute everything.
The scenario will be different in case of a mortgage.
How Is The Asset Distributed?
As mentioned before, the decedent (the person who’s passed away) will leave an instruction or two regarding the asset distribution. If the will is considered as lawful and valid, then the lawyer will use the same to distribute everything perfectly
However, if the person passes away before making the will, then a number of laws might be used before making the distribution. These regulations will vary from one another. Thus, it’s always best to contact an attorney and get their help regarding the same.
As a general rule, though, the closest person to the decedent will usually be the first person to inherit. For example, if you are a child or the spouse of the deceased, you will be the first one to receive the asset. If the individual doesn’t have either, then their parents may get the same.
However, before the asset is distributed, it’ll be accumulated by a court-provided individual. This person is known as the “executor,” “personal representative,” or “conservator.” They’ll be in charge of keeping the assets in an inventory and then distribute them accordingly.
Inheritance Distribution – Restrictions
While writing a will, the owner of the same can put in some specific restrictions in place. It can be about who they want to pay or how much they want to distribute to someone.
For example, you can restrict someone from getting your money before they reach a certain age or complete their college graduation. A parent always teach their kids about banking from an early age, but when it comes to handling property, one has to be mature enough.
Another type of inheritance distribution might concern in what way you want to distribute your wealth within your beneficiaries.
If you want to, you can limit the amount of money your child or the beneficiary can spend. Depending on your will, the money can only be used for some specific uses, including –
- Medical expenses.
- Buying the required clothing, etc.
If the person fails to meet the requirements, the court might seize the amount of money they were entitled, depending on the will.
Who Will Pay The Liability?
Fortunately, though, the personal obligation of someone else does not pass to the person who will get the money or the inheritance. Hence, debts like student loans or credit card lendings, will be wiped out after a while. Nonetheless, some expenses, such as mortgage loans or car payments, can be tied to assets you might be using.
So, if you’re inheriting the property, you will have to pay the required amount for that. Or else, the creditor will take them back.
However, taxes are usually not inherited. Instead, it will be taken directly out of the assets you have inherited. It will be done before the properties have been distributed entirely.
FAQs – Frequently Asked Questions
In this section, we’ll add some queries that you might have regarding our topic. Hopefully, it will help you clarify everything that’s been making you feel confused.
.Did Millionaires Inherit Their Wealth?
There’s a recurring myth that most millionaires have inherited their wealth from a deceased successor. However, that’s not true. As per a study, only 21% of millionaires have inherited their family’s wealth. Others are self-made.
.What Are The Rules For Inheritance?
Usually, the common inheritance law tends to allow you to claim one-third of the property of the decedent. However, in some states, the amount of money a spouse gets can increase with the number of years they’ve together with the person.
Getting a substantial inheritance doesn’t usually guarantee your financial security. If you do not have a proper plan, everything might fall down like a house of cards.
Hence, it is always better to opt for an attorney who can offer some assistance in this regard. Also, hiring a financial advisor can turn out to be beneficial for you as well.