Which Questions Should the Beneficiary of a Will Ask?

When I was in my 30s, I was surprised to receive money from a will. A relative I had never met listed my father as a beneficiary, but since he was deceased, his share was distributed among my two sisters and me. I greatly appreciated the modest amount and used it to pay off a debt.

I know how unexpectedly losing my father caused a grief that still hits me today. I could not imagine having to navigate the probate and distribution process as a beneficiary during such an emotionally charged time.    

Because of my experience, I wanted to learn more about the financial aspects of a loved one's passing, so I can understand what to expect before the event occurs. The following are questions and answers I uncovered.

What Are My Rights as a Beneficiary?

As a beneficiary, you have a legal right to be informed about the estate’s proceedings, including the following:

• Information about the estate

• Details about the estate’s administration

• Your entitlements

• Copies of the will

• Periodic financial statements

• Actions you can take if you believe the estate is being mismanaged

Staying informed helps ensure transparency and accountability.

Who Is the Executor?

The executor, who is named in the will, manages the estate. This person could be the deceased’s family member or friend, or a professional executor paid out of the estate funds.

There might be multiple executors to reduce the workload or ensure proper asset management. For instance, several executors could be involved to oversee the guardianship of children or animals. One executor might be responsible for allotting financial distributions to each child, and another might ensure they are taken care of.

Write down each executor’s name, contact information, and plan for transparent communication while managing the estate. Follow up with questions and concerns as needed. 

Which Assets Are Included in the Inheritance?

An inheritance can include the following assets:

• Real estate

• Companies

• Money

• Art

• Jewelry

• Collectibles

• Digital assets

• Pets

• Family heirlooms 

How Will the Inheritance Be Distributed?

The following is a summary of the inheritance distribution process:

• Probate or executor supervision

• Reviewing the will

• Determining asset value

• Locating assets

• Paying debts and liabilities

• Paying taxes

• Distributing taxes

Estate complexity, probate court, inheritance disputes, estate taxes, and other factors affect the inheritance distribution process and timelines. This process could take several months to 1 year. Regularly communicating with the executor can help you understand the timeline and plan financially.

Are There Conditions on the Inheritance?

The deceased might have placed conditions that could affect access to an inheritance. For instance, the person might have left a beneficiary $100,000 with the condition that they receive $50,000 at the time of death and $50,000 at a specific age. You should review the documents with the executor to understand the conditions and discuss how they are verified and enforced.

Are There Any Potential Conflicts or Disputes?

Ask the executor whether there are ongoing or potential disputes among the beneficiaries. Knowing these issues can help you understand how the estate might be affected and prepare for possible resolutions.

How Long Might the Probate Process Take?

The probate process varies by state and can take 4 to 18 months. The attorney fees, court costs, and other expenses come out of the estate. Understanding the timeline for the probate process helps set realistic expectations for when you might receive your inheritance.

Which Financial Accounts Need to Be Transferred?

A beneficiary who inherits a financial account must contact the bank or brokerage regarding the account holder’s death. These accounts might include:

• Checking accounts

• Savings accounts

• Money market accounts

• Certificates of deposit

• Treasury bills

• Treasury notes

• 401(k)s

• Individual Retirement Accounts

• Brokerage accounts containing stocks, bonds, or other investments

What Are the Tax Implications of the Inheritance?

Depending on the state they live in, beneficiaries can face estate, inheritance, or other tax obligations. Estate taxes are taken out of the deceased person’s estate upon death. Conversely, inheritance taxes are levied on the beneficiary when they receive their inheritance.

All estate debts and taxes must be settled before distributing assets to beneficiaries. This settlement impacts the net value of the estate available for distribution. As a result, beneficiaries are encouraged to consult with a financial planner or an estate attorney to understand how the tax obligations are handled.

Which Steps Should I Take After Receiving an Inheritance?

Because an inheritance significantly impacts your financial goals, you should consider taking these steps after the distribution:

• Assess the value of the inheritance.

• Review related liabilities and responsibilities.

• Measure how each asset affects your current financial situation.

• Realign your total assets with your long-term financial strategy.

• Determine if items need to be sold and the relevant tax implications of selling.

Working with a financial planner and/or a tax consultant can help you assess, review, and align your assets with your financial goals.

*This information is for educational purposes only.