Estate planning attorney Wendy Goffe was quoted in a CNBC Investor Insight titled “Here’s how to handle an unexpected windfall of money,” published October 22, 2020. The article discusses steps that the beneficiary of an unexpected inheritance – which could result from the untimely death of a loved one or having been named an heir without the beneficiary’s knowledge – should consider to avoid mistakes that could result in unnecessary taxes or expenses.
In most cases, receiving an inheritance will not cause any extra tax burden on the recipient – thanks in part to legislation enacted in 2017 that increased from $5.5 million to $11.58 million in 2020 the amount that an individual can pass down to heirs without it being subject to the 40% federal estate and gift tax. However, experts suggest an heir should seek the advice of a local planning estate attorney when selling an inherited house if it is in a state that imposes its own estate or inheritance taxes. They also recommend enlisting the help of an attorney if the inheritance includes a trust.
For her part, Goffe sounded a cautionary note about sharing the news of an inheritance, especially if it is significant. “People will start showing up wanting loans or gifts,” she said. “You need to be thoughtful about who you tell.”