Recently Inherited Assets? It May Be Time to Update Your Estate Plan

Receiving an inheritance can change more than your bank balance. It can also change what your own estate plan needs to accomplish.

You may have inherited cash, investments, a house, farmland, a cabin, or an interest in a family business. Whatever the asset, one question is worth asking:

Does your current estate plan still make sense now?

Why an Inheritance Should Trigger an Estate Plan Review

Your estate plan is built around what you own, who you want to benefit, and how you want property to pass.

A significant inheritance can change all three.

For example, a will that made sense when your estate was relatively simple may not work as well after you inherit farmland, a family cabin, or a large investment account.

You may also need to review:

1. Your will or trust
2. Beneficiary designations
3. How inherited property is titled
4. Whether a trust now makes sense
5. Whether your total estate may create Minnesota estate tax concerns

Inherited Real Estate Can Create Bigger Questions

Real estate often deserves extra attention.

If you inherit a house, cabin, or farmland, think beyond who owns it today.

Ask what should happen to it if you die.

Should it pass equally to your children?

Should one child receive it and another receive different assets?

Should it stay in the family?

Would shared ownership create future conflict?

These questions are especially common for families in Southeastern Minnesota, where farmland and other family property may represent a large portion of a person's overall estate. Our office regularly works with clients whose estate planning needs change after receiving significant real estate or farm assets.

Keep Good Records for Inherited Property

If you inherit appreciated property, keep records showing its value when the prior owner died.

Under federal tax rules, inherited property generally receives a new tax basis based on its value at death, subject to applicable rules and exceptions. That information may become important if you later sell the property.

Appraisals and estate records should be kept with your other important financial and estate planning documents.

An Inheritance Is a Good Time to Plan Forward

Someone else's estate plan just determined what happened to property when it reached you.

Now it is your turn to decide what should happen next.

Sometimes that means making a few straightforward updates. In other cases, an inheritance creates new questions involving trusts, real estate, farmland, family businesses, or taxes.

The important thing is to review the plan before another major life event forces the issue.

Take the Next Step

If you've recently inherited assets and want to make sure your estate plan still fits your family, property, and goals, contact Wagner Oehler, Ltd. to get started.

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