Inheritance is a financial concept you need to understand. Bankrate explains.
An inheritance comprises assets received from the estate of a person who has died. It can also refer to sum total of property a person leaves to his or her heirs.
The assets that make up an estate are transferred to one or several people, as specified in a will. The portion granted to each is their inheritance. These transfers are subject to estate taxes.
Although the law lets you leave property to anyone you wish, some states require a portion of an estate to be left to a surviving spouse. The exact laws vary from state to state, depending on whether you live in a community property state or a common law state.
Marital property refers to any assets acquired during a marriage. In a community property state, the law states that each spouse owns half of the marital property. Each spouse retains the right to dispose of half of the marital property to heirs other than the surviving spouse.
In common law states, spouses do not retain an equal interest in their marital property. Common law states typically require a certain percentage of marital assets to be left to the surviving spouse. Beyond this, the distribution of marital property depends on how the spouses shared ownership, such as joint tenancy with the right of survivorship or tenancy in common.
If a family member passes away and leaves you property in her will, the property that you receive is your inheritance. For example, assume that your great aunt Hilda dies. Her assets include cash, property, and personal belongings. In Hilda’s will, she states that you are to receive $10,000 in cash along with certain pieces of her jewelry. The cash and jewelry are your inheritance.
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