My wife has an Inheritance, what do I need to know?

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As the title reads, My wife has an Inheritance, what do I need to know?

We are basically new to Inheritance as we have never inherited anything before.
It appears that the person leaving my wife had a value estimated at over $800, 000. she may only be getting 10%, at least this is what we are thinking.

Do any of you have advice that you would like to share? We live in the state of Florida if that matters. USA

I tagged this in many areas because I think that some of you in these areas can be very knowledgeable at times.

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Type: Discussion • Score: 6 • Views: 4,492 • Replies: 26

@reasoning logic,

The executor (if there is a will) or administrator (if this is via inheritance laws when a person dies intestate) will contact you and arrange for however the goods will be transferred. Hard to say from what you wrote whether this is cash, jewelry, real estate or something else. For this large a chunk of value, I'd suggest contacting your lawyer and maybe an accountant. Find out what the tax liability is on your end, if any.

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@reasoning logic,

Regardless of the amount inherited, remember that it will be reported to the IRS, and you will have to pay taxes on it. Depending on your tax bracket, save one-quarter to one-third of it for taxes.

Edit: Because the estate is being divided, I'm assuming your wife's portion of the inheritance will be paid in cash. If you will be receiving title to real estate, jewelry, investments or other items, follow jespah's advice and consult an accountant.

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@jespah,

Quote:

Hard to say from what you wrote whether this is cash, jewelry, real estate or something else.

It is all the above.

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@Eva,

Quote:

Depending on your tax bracket, save one-quarter to one-third of it for taxes.

We plan to pay the taxes as soon as we get it

1 Reply

@reasoning logic,

Congratulations, but why is this in the philosophy forum? Do you want to know how to spend it WISELY?

1 Reply

@JLNobody,

Quote:

Do you want to know how to spend it WISELY?

Of course wouldn't you?

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@Eva,

Quote:

Edit: Because the estate is being divided, I'm assuming your wife's portion of the inheritance will be paid in cash. If you will be receiving title to real estate, jewelry, investments or other items, follow jespah's advice and consult an accountant.

It will be a cash pay out as we see it.

Everything will be sold and distributed.

1 Reply

@reasoning logic,

As a rule of thumb, remember this...if you're in a 28% tax bracket, save 28% for taxes. (Same with other tax brackets.) But the additional income may change your tax bracket, so ask an accountant. If the inheritance is received this year, you will report it next April on your 2012 tax return.

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@reasoning logic,

Make sure you know your tax liability, but this does not mean that there will be one as in some situations the tax is paid before you see the money. Also, if your wife keeps the money segregated (in a separate account) then you get none of it if you divorce in many states.....it is her money by law.

1 Reply

@hawkeye10,

Quote:

then you get none of it if you divorce in many states.....it is her money by law.

Now that does not seem fair!

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@reasoning logic,

if you play nice maybe she will let you help spend it. Very Happy

1 Reply

@hawkeye10,

Now I like that plan, We have had plenty of time to think about it as it has been in process for 4 months now.

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@reasoning logic,

reasoning logic wrote:

Quote:
then you get none of it if you divorce in many states.....it is her money by law.

Now that does not seem fair!

(Ahem) Excuse me, but why would that not be fair? It is HER inheritance, after all.

1 Reply

@reasoning logic,

The current exclusion for estate tax for the Feds looks like it is $5 million. You should owe no estate tax for the Federal govt but you may still have to file the forms.
http://www.irs.gov/businesses/small/article/0,,id=164878,00.html

States have their own estate taxes.

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@parados,

You might be whacked for capital gains.

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The first time you file for capital gains, the tax rate is only 5%--so when someone inherits a house, for example, that's the rate they pay on the sale of the house and property. After that, though, capital gains is only 15%, which is less than most people pay on "earned" income.

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You should also investigate the gift tax, if you wife will trust you to this extent. She can make a one time gift to you up to a value of $24,000 (at least, that was once the amount, it may be higher now) which is tax free, so far as the IRS is concerned.

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@reasoning logic,

reasoning logic wrote:

Quote:
then you get none of it if you divorce in many states.....it is her money by law.

Now that does not seem fair!

My wife has an Inheritance, what do I need to know?

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