An inheritance is a sum of money or property that is passed down to an individual after the death of a loved one. In many cases, the distribution of an inheritance is handled through the estate of the deceased person, which is administered by an executor or personal representative. However, in some cases, a beneficiary may request an advance on their inheritance before the distribution of the full inheritance.
An advanced inheritance is a sum of money that is given to a beneficiary before the distribution of the full inheritance. This may be done for a variety of reasons, such as to help the beneficiary cover financial needs or expenses before the inheritance is received. An advance is typically given at the request of the beneficiary and may be granted at the discretion of the person distributing the inheritance, such as the executor of a will.
There are a few key considerations to keep in mind when it comes to advances on inheritance. First, it is important to understand the terms of the advance. Be sure to get the terms in writing, including any repayment requirements or deductions from the inheritance. This can help to avoid misunderstandings or disputes later on.
It is also important to consider the tax implications of an advance on inheritance. In some instances, an advance on inheritance may be considered a loan, and the borrower may be responsible for paying taxes on the interest earned on the loan. While an advance may be helpful in covering financial needs or expenses in the short term, it is important to carefully consider the long-term implications of taking an advance.
Is an Advance on Inheritance a Gift?
An advance on inheritance is not generally considered a gift. In most cases, an advance on inheritance is not considered a gift because it is not being given freely and without any expectation of repayment. Instead, it is considered a loan or a distribution of assets that will eventually be paid back to the estate or to other beneficiaries after the individual’s death.
If you are considering getting an advance on an inheritance, it is a good idea to weigh the pros and cons of the advance and consult with one of our trust and Estates attorneys.