VIN Verifications and Changing Vehicle Ownership With a DMV Car Title Transfer

Buying or selling a car requires transferring the title. Learn about the DMV title transfer process, and what is legally required.

A car title is the document that establishes ownership of a vehicle. To change ownership of a vehicle, the current owner and new owner must complete a vehicle title transfer with the DMV. This process varies from state to state. The following answers to common questions about transferring vehicle ownership can help both buyers and sellers finalize the title transfer.

When is a vehicle title transfer required?

When a vehicle has, or is required to have a title, when ownership changes, a title transfer is typically required. Here are the most common situations where a vehicle title transfer may be required:

  • Selling or buying a car.
  • Transferring a car to a family member.
  • Inheriting a vehicle.
  • Paying off a car loan or car note.
  • Gifting, donating, or junking a vehicle.
  • Making name corrections.

How do I transfer vehicle ownership when buying or selling a car?

Most states require a Vehicle Bill of Sale or some other documentation when buying or selling a car. A Bill of Sale documents the terms and conditions of the exchange between two private people. It includes the purchase price, the VIN, the model and year of the vehicle, the warranty, an odometer reading, the signed legal names and addresses of both the seller and the buyer, and sometimes a notarized signature. A Vehicle Bill of Sale, however, only represents the transfer of the right to ownership. The vehicle’s certificate of title represents actual ownership and is required in every state. 

After or at the time of the sale, the seller must provide a current odometer disclosure on the title, and both the buyer and seller must sign and date the title document. The buyer then needs to make an appointment at their state’s DMV and apply for a title in their name. Be prepared to present the above paperwork and pay a small transfer fee. Note that some states, like California, also require a smog certification.

How do I transfer vehicle ownership to a family member?

Even when transferring car ownership to a family member, most if not all of the same vehicle title transfer procedures and regulations apply. Typically, the recipient will not have to pay sales tax on the vehicle. Spouses, parents, children, grandparents, grandchildren, siblings and partners are considered eligible for a family vehicle title transfer. The rest of the process of transferring title is the same as buying or selling a car.

How do I transfer vehicle ownership if I inherit a car or boat?

The process of getting the title to an inherited car or boat in your name may vary depending on the exact situation. You may want to ask a lawyer about your specific situation. 

Generally, to claim the deceased owner’s vehicle, you may be required to provide the DMV with proof of your identity and relationship to the owner, a completed and signed title including the current odometer disclosure, and other supporting paperwork, such as the will, death certificate, or other certified court documents. Be prepared to pay a transfer fee. Inherited vehicles may also be exempt from sales tax.

How do I remove my loan company from the title when I pay off my car note?

After you pay off your car loan or car note, the lienholder must be removed from the title. Usually the lienholder takes care of this process. When the lien release is signed and mailed to you, you may still need to make an appointment with the DMV and submit the lien release, a completed vehicle title transfer application, and pay the transfer fee. You may be able to do all of this by mail, just be aware of the additional processing time.

How do I transfer vehicle ownership when gifting a car?

As with transferring a car to a family member, the recipient of a gifted vehicle may not have to pay sales tax on the vehicle. The procedures for transferring ownership are similar to buying or selling a car: the donor must include the odometer disclosure on the title, both parties must sign and date the title, and the recipient must go to the DMV and apply for a new title in their name and pay the transfer fee.

How do I change or correct a name on a vehicle title?

If your name changes due to marriage or divorce, or you discover a mistake on your title, you can have your name changed or corrected on the document. Gather the legal documents that provide proof of your name change, like a birth certificate, marriage certificatedivorce decree, or court order. Write the corrected name under New Registered Owner on your vehicle title and complete the appropriate portion of the title or title transfer document. Then, make an appointment with your local DMV to submit the paperwork. Note that some states wave the title fee for name corrections.

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Empower Your Loved Ones with a Power of Attorney for Dementia

Few things are more difficult than watching illness progress in a parent or other loved one who has been diagnosed with dementia or Alzheimer’s. It’s important, however, to take care of legal and financial planning while your loved one is still able to engage in the process. A good place to start is looking at the different types of Power of Attorney documents, which allow a designated person to make certain decisions should a loved one become incapacitated and unable to make decisions themselves. Here we discuss the details of making a Power of Attorney for someone with dementia.

Is it legal to make a Power of Attorney for someone with dementia or Alzheimer’s?

The answer to this question depends on mental competency. A person is required to be mentally competent to execute a Power of Attorney, which means they have to be able to understand what they are signing and the effects of doing so in order to legally enter into such an arrangement. In some cases, a physician may be able to sign off on declaring a person mentally competent to sign. Alternatively, a person may execute a combined Mental Health Declaration and Power of Attorney in order to decide beforehand that a Power of Attorney would go into effect when certain conditions are met. 

Another option is a Durable Power of Attorney. A Durable Power of Attorney goes into effect immediately upon signing it and terminates only upon death. Your loved one may decide instead to create a Springing Power of Attorney, a variation of the Durable Power of Attorney, which goes into effect only when they can no longer demonstrate the ability to make important decisions on their own behalf. The person to whom they grant authority to make these decisions can do so only when the grantor’s own abilities come into question.

What happens if a Power of Attorney is not made?

If you do not have a Medical Power of Attorney, hospitals or physicians may have to make medical decisions on your behalf in an emergency. When it comes to finances, issues may arise if no one is authorized to make key decisions, such as those surrounding modifying a loan or accessing funds in a bank account to pay bills. Without a Power of Attorney, no one other than a court can decide to appoint someone to manage your loved one’s affairs. You would not be able to step in to help your loved one without a court interfering, and the court could appoint someone your loved one would never have personally chosen. This would mean that a hospital or physician may have to make medical decisions on their behalf in an emergency without any input from a trusted party. Similarly, when it comes to finances, issues may arise if no one is authorized to make key decisions, such as those surrounding modifying a loan or accessing funds in a bank account to pay bills.

What happens if my loved one cannot sign the Power of Attorney?

If your loved one is not deemed mentally competent to sign a Power of Attorney, you may have to seek conservatorship through a court to obtain the same type of authority to make decisions on their behalf. A conservatorship usually entails a costly and time-consuming judicial process. Typically, the court appoints your loved one’s next of kin to oversee medical and financial decisions. Keep in mind that although the court is likely to appoint a close family member, it may not be the person most up to the task, which could create friction among adult siblings.

How can I discuss making a Power of Attorney with a parent or loved one?

If your parent or other loved one discloses a diagnosis that may impact their decision-making ability, it may be best to initiate a conversation regarding a Power of Attorney as soon as possible. A Durable Power of Attorney for medical and financial issues can provide peace of mind in case their condition progresses quickly. Alternatively, you can set up a Springing Power of Attorney to take effect only when they can no longer make decisions on their own behalf. This decision can be part of a larger estate planning conversation, where an Advance Directive or Living Will may also be considered to ensure you understand their wishes for medical care.

Overall, it’s important to emphasize to your loved one that Powers of Attorney are the best way for them to ensure their wishes are carried out if they become incapacitated. Many people find comfort or security knowing that these decisions are in good hands. 

Most states require that a Power of Attorney be written, witnessed, and notarized. For this reason, it is often convenient to grant a Power of Attorney while finalizing a comprehensive estate plan. You can also reassure them that they can change the person named in the Power of Attorney (the “agent”) at any time as long as they are mentally competent when they do so. 

If you have any questions regarding how to get started creating a Power of Attorney or which type might be best for your loved one, contact a Oakland Prime Mobile Notary today for direction and guidance to affordable service. 

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What To Do When Your Lottery Pool Wins Big

Running or participating in a lottery pool can be complicated, especially if your group wins. Learn how to keep things legal and clear here.

When Powerball, Megamillions, or other lottery prizes start to reach exorbitant amounts, interest peaks. For some time now, groups of individuals, friends, families, and co-workers have pooled their resources together to increase their odds of winning. A Lottery Pool Contract can help the participants have a clear understanding of what happens if the group wins.

Can I buy my own lottery tickets if I am part of a lottery pool?

Usually, lottery pools group together money to purchase tickets, and those tickets are listed in a Lottery Pool Contract. When the pool does not list out the tickets that were purchased with the money, separately purchased tickets can become a legal issue, depending on the language of the agreement. If you are the lottery pool manager or representative, it can be an even more complicated matter.

To make sure separately purchased tickets are not confused with the tickets that are part of a Lottery Pool Contract, you may want to ask fellow pool members, or the named manager or representative for their recommendation.

What are the tax consequences of winning the lottery?

Winning the lotto is generally treated the same as gambling winnings, and are taxed. The IRS taxes lottery winnings as income, and most states that have a lottery also impose a tax on lottery winnings. Both California and Delaware, however, do not have a state tax on their lottery winnings. Fortunately, this is only something a person worries about if they win.

Does a lottery pool group representative have to pay taxes when distributing the winnings?

Depending on how the winnings are claimed, there may be additional tax considerations for whoever is tasked with collecting and distributing the winnings. The representative may be required to pay taxes on the lump sum winnings. Additional tax issues may arise out of the disbursements to group members. When a lottery pool wins, the representative may want to seek legal and tax advice on how to avoid bearing all the consequences.

Can I join a lotto pool from a different state?

So long as you do not live in a state that prohibits lottery or gambling, it is likely legal to participate in a lottery pool from a different state. There may, however, be certain drawbacks, such as tax consequences, or paying additional taxes in your own state. But, if your group wins the jackpot, you’ll probably be able to afford those.

If you have more questions about starting or joining a lottery pool, reach out to Oakland Prime Mobile Notary for affordable guidance.

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What Happens When You Don’t Do Your Taxes?

There are a number of negative consequences for not doing your taxes when you’re supposed to. Let’s go over what can happen and how to dig out.

Tax day can be stressful for many people but even more so for a person who hasn’t filed their taxes in a few years. The longer you go without filing your taxes, the more stressful your situation will become, so you may as well try to fix it. Especially when you start thinking about the penalty charges that may be accumulating.

What happens if you don’t do your taxes?

Not filing your tax return or paying your taxes on time or at all can lead to serious consequences, including:

  • Penalties for late filing: The IRS will issue a Failure to File Penalty of 5% of the unpaid taxes you owe for each month or partial month that your tax return is late, unless you are also issued a Failure to Pay Penalty in the same month. In that case, the Failure to File Penalty may be reduced by the amount of the Failure to Pay Penalty for that month. The penalty will not, however, exceed 25% of the taxes you owe. 
  • Penalties for late payment: The IRS will issue a Failure to Pay Penalty of 0.5% of the amount of tax owed after the due date and for each month or partial month the tax remains unpaid. The penalty will not, however exceed 25% of the taxes you owe.
  • Interest charges: Not paying your taxes on time can lead to penalties and interest charges on the amount owed. Interest may accrue on the unpaid tax owed up until the date of payment in full. The interest rate is based on the federal short-term rate plus 3% and is adjusted quarterly.
  • Legal consequences: Continuing to ignore your tax responsibilities can lead to wage garnishments, tax liens and levies, and even imprisonment.

The good news is that the IRS actually does try to help those who come forward on their own and, in many cases, is willing to work something out.

What happens if you are late paying your taxes?

You may be subject to penalties and interest charges if you are late paying taxes that you owe. The penalty amount will depend on how late you are and how much you owe. The IRS can take legal action against you in order to collect late tax payments. These actions may include wage garnishment or seizure of assets. 

There is a separate penalty for failure to file your tax return on time. If you think you will owe taxes and not have enough money to pay them, you might consider filing your return on time and working out a payment plan with the IRS. Working with a tax pro can give you peace of mind that your return will be done professionally and with your specific situation in mind. In many cases, returns can be done quickly as well, and filed electroncially to make sure they are filed on time.

What can be done to catch up when you haven’t done your taxes?

One way to catch up with your taxes is to file late tax returns. Here are the general steps:

  • Gather your tax documents and file your tax returns. For each of the years you have not filed your taxes, you are going to need your W-2’s and/or 1099’s. If you are unable to locate these documents, you can request them from the IRS using a Form 4506-T. You will need to file a return for each year you missed. Most companies that provide e-filing services have forms for the past two years. If you need to go back further than that, you will have to request the forms from the IRS and submit your returns by mail.
  • Pay taxes that you owe. Once you have submitted your tax returns to the IRS and your state, you will want to pay any taxes that you owe along with penalties that have accumulated. You can check out the list of penalties on the IRS website. If you cannot pay your entire balance, you will be charged interest until you can. If you are expecting a refund or ended up not owing any taxes, there is no penalty.
  • Work out a payment plan with the IRS. If you are unable to make a payment in full for what is owed, you could be eligible for a payment plan. If you are currently low-income, they may have additional options for you. You can apply for a payment plan on their website or by calling the IRS at (800) 829-1040.

Going through the steps of carefully gathering information and then preparing and filing the correct documents and working out the correct fees can be overwhelming and very time consuming. You don’t have to do this on your own. You can work with a tax pro who will help you file on time.

Do you need a tax professional and how do you find one?

In most cases, simply filing your tax returns and paying your taxes will get you out of tax trouble. However, it might be a good idea to meet with a tax attorney or tax filing professional to make sure you are handling things correctly and to learn about any other options that might be available to you. Rocket Lawyer now offers affordable and convenient help for tax prep, filing, and attorney advice. Get matched with a tax pro, scan and upload your documents, and rest easy knowing you have professional help on your side.  

While it may be stressful, it will serve you better in the long run to address your IRS issues now. File your tax returns and pay your back taxes to get in good standing with the IRS and your state tax agency.

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Authorize a Trusted Adult To Care for Your Child

What is a Child Care Authorization Form?

A Child Care Authorization is a form that allows someone to temporarily care for or make decisions about your child, such as allowing your nanny to pick up your child from daycare. Child Care Authorizations help document that you are entrusting your children to a childcare provider and gives them limited powers to make decisions in regards to your children.

Create a Child Care Authorization to define the terms when another person can make decisions about your child. 

If you want to grant legal authority to make major decisions, create a Power of Attorney for Child instead.

When to use a Child Care Authorization:

  • You would like to authorize your child’s school to release your child to another individual.
  • You would like to give authorization for another individual to make decisions regarding your child in your unexpected absence.

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Transferring Mortgaged Property into a Revocable Living Trust

Mortgaged property may be transferred into a revocable living trust as a measure to avoid probate and provide greater control over how the property is distributed to beneficiaries. Unlike property which the grantor owns free and clear of encumbrances, mortgaged property requires additional considerations prior to placing it in a trust.

The process for funding (i.e., transferring assets into the trust) a mortgaged property to a revocable trust can be confusing, as the process depends on the type of property being transferred. Funding a primary residence can be very different from funding a rental property. One of the reasons for the difference is the Garn–St. Germain Depository Institutions Act of 1982 (the “Act”) and its effect on the “due-on-sale” provision found in most mortgages.

The “due-on-sale” (aka “acceleration clause”) is a provision in a mortgage document that gives the lender the right to demand payment of the remaining balance of the loan when the property is sold. It is a contractual right, not a law. This means that if title to the property is transferred, the lender may (or may not), at its option, decide to “call the loan due.”

However, when the property is transferred into a living trust, homeowners whose mortgage contains a due-on-sale provision receive protection from the Act, which is a federal law that creates several exceptions in which a lender may not enforce the due-on-sale provision. Certain limitations are imposed by the Act on the validity of a due-on-sale provision found in many mortgage contracts; no lender may accelerate in the event of any of the following transfers, regardless of what the particular due-on-sale provision states, whenever the loan is secured by residential real property containing less than five dwelling units:

(1) a junior lien is created on the property.
(2) a purchase-money lien is created for household appliances.
(3) a transfer occurs by devise, descent, or on the death of a joint tenant.
(4) a leasehold is created for a term of three years or less not containing a purchase option.
(5) a transfer to a relative resulting from the death of a borrower.
(6) a transfer where the spouse or children of the borrower become an owner of the property.
(7) a transfer resulting from a decree of dissolution of marriage, a legal separation agreement, or an incidental property settlement agreement by which the spouse of the borrower becomes an owner of the property.
(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property.
(9) any other transfer or disposition described in regulations prescribed by the Federal Home Loan Bank Board.

Transfers of Commercial or Investment Property

The ability of a lender to enforce a due-on-sale provision for transfers to a revocable living trust becomes more unclear when the property transferred is not the borrower/beneficiary’s personal residence. California law does not contain the same requirements as the Act – that the borrower must remain the occupant of the property in order to prevent enforcement of the due-on-sale provision. On the other hand, the Act expressly states that it was intended to override state law. In general, when federal and state laws conflict, the federal law controls. Thus, the Act appears to allow for the enforcement of a due-on-sale provision when the borrower/beneficiary does not occupy the property.

In light of this uncertainty and the potentially high stakes involved, if the property transferred to the trust is not occupied by the borrower/beneficiary, the best course seems to be to get the lender’s written permission before transferring the property. A lender typically charges a modest fee for this consideration, but there is no guarantee – especially if the interest rate on the loan is significantly lower than the current market rate. At any rate, while funding your revocable trust with real property is critical to avoiding probate and making the most of a revocable trust, transfers of commercial and non-owner-occupied residential property must be handled with care.

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Annuities: Income For Life

Having a company pension plan that provides guaranteed income for life could certainly relieve many financial worries, especially in retirement.

However, many Americans don’t have access to company pension plans, and those who do often have a plan that doesn’t provide a guaranteed income stream.

As part of an overall income generating strategy, annuities can be an ideal solution for taking your retirement savings and turning it into a dependable income stream for your retirement.

So let’s take a closer look at annuities, which can also provide you with income for life.

In exchange for a single lump sum deposit, a financial institution makes guaranteed regular income payments to you that contain both interest and a return of principle.

Annuity payments can continue for a chosen period of time or for the lifetime of one or two people.

While some income generating investments like mutual funds can be depleted over time, life annuities provide retirement income that’s guaranteed for life no matter how long you live.

The amount of income provided by an annuity is determined at the time of purchase and will depend on a number of factors such as;

  • the amount of money you deposit,
  • current interest rates,
  • whether or not you want your payment amount indexed to help keep up with inflation,
  • the sex and age of each spouse,
  • and the number of years you want to guarantee income payments in case of premature death.

If you die prematurely, there are options available to you to ensure that your annuity investment isn’t lost.

For example, various guarantee options can ensure a specific amount of income is paid from your annuity investment to you, or your named beneficiaries.

Some types of annuities have tax advantages as well.

Since annuity payments consist of principle and interest, only the interest portion is taxable.

Prescribed annuities evenly spread the taxable interest over the life of the annuity, thereby offering some tax deferral.

Regular annuities must report taxable income as it is earned, which is higher in the early years and lower when the principle is reduced.

If you are looking for ways to earn guaranteed income for as long as you live, then speak with an advisor about how life annuities can play a role in your overall financial plan.

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Protect your future with estate planning

Life insurance can be a valuable tool for protecting your loved ones financially.

The purpose of your life insurance policy will determine which type of policy you choose. Although some people view life insurance as merely a “bet” on when you will die, it has far more important purposes. These include: 

  • Protection: Life insurance can protect your family and other dependents by replacing your salary if you die.
  • Liquidity for Taxes: Life insurance can help make sure that your estate has enough cash to pay estate taxes and other estate expenses.
  • Investment Tool: Life insurance can also be used as an investment tool that allows you to defer payment of the taxes owed on your gains.

Types of Life Insurance:

Life insurance policies fall into two general categories: term life insurance and permanent life insurance (also known as “cash value” life insurance.) Term life insurance is usually used only for a short period of time and consists of insurance on your life for a specified term, usually a period of one to five years. Term insurance is generally considered “pure” insurance because it is not an investment vehicle and only provides protection in the event of death. Permanent or “cash value” life insurance premiums are generally higher than for term insurance. The part of the premium that is not used to cover the cost of insurance is invested by the insurance company; this creates a cash value that the policy holder can borrow against by taking a policy loan.

The insurance industry has developed many types of life insurance. Some of the more common types of life insurance include:

  • Term Life Insurance: Term life insurance is usually used only for a short period of time and consists of pure insurance on your life for a specified term. If you die during the stated term, your beneficiaries collect the face value death benefits.
  • Whole Life Insurance: Whole Life Insurance is a type of permanent life insurance that covers you for as long as you live and continue paying our premiums. Whole life insurance provides pure insurance on your life as well as an investment vehicle to accumulate cash value.
  • Variable Life Insurance: Variable life insurance is permanent life insurance where the amounts of cash value and death benefits are variable and depend on the success of the investments made.
  • Universal Life Insurance: Universal insurance is permanent life insurance that includes both pure insurance and investment components, similar to whole life insurance. However, universal life insurance allows the owner to adjust either the amount of premiums to be paid or the amount of the death benefits to be paid at death.
  • Universal Variable Life Insurance: Universal variable life insurance is permanent life insurance that includes both pure insurance and investment components. It combines features of variable and universal life insurance and allows some flexibility in choosing investments.

In addition to understanding the type of policy, here are some other important questions you should get answered before signing on the dotted line:

  • Do your insurance premiums increase?  Make sure that the language is clear regarding if and when your payments will increase.
  • What happens to your policy if your health declines?
  • What happens if you miss a payment or make a late payment?  Is there a grace period?  The danger is that your policy will lapse and your beneficiaries will be entitled to no money at all.

To get a sense of what a life insurance policy may include, here is a sample life insurance policy. If you have questions about your coverage, or need to get covered, Oakland Prime can offer you a free life insurance review.  Just submit your information at our Life Insurance Center and one of our Advisors will contact you. 

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Power of Attorney: What You Need to Know

General and Special Powers of Attorney

A General Power of Attorney is a document under which you authorize another person to act on your behalf in a variety of situations. In contrast, a Special Power of Attorney is a document under which you authorize another person to act on your behalf in specific situations only.

A General Power of Attorney is very broad and provides extensive powers. A general statement is included which gives the Agent “full power and authority” to act on your behalf. The document then lists certain powers to make it clear that you intended to grant such broad powers. For a list, see General Powers, below.

A Special Power of Attorney document provides the Agent with only those powers that are listed in the document. For a list, see Special Powers, below.

General Powers

Broad powers granted in a General Power of Attorney can include authority to act with respect to the following subjects:

  • Real Property.
  • Tangible Personal Property.
  • Stocks and bonds.
  • Commodities and options.
  • Banks and other financial institutions.
  • Operation of entity or business.
  • Estates, trusts, and other beneficial interests.
  • Claims and litigation.
  • Personal and family maintenance.
  • Benefits from governmental programs or civil or military service.
  • Retirement plans.
  • Taxes.

In addition, optional powers include powers to:

  • Maintain and operate business interests.
  • Employ professional assistance.
  • Make gifts.
  • Make transfers to revocable (“living”) trusts.
  • “Disclaim interests” (this power can be an important estate planning tool that helps avoid estate taxes).

If providing broad powers is not desirable, a Special Power of Attorney, which can be limited in scope, may be more appropriate.

Special Powers

A Special Power of Attorney document provides the Agent with only those powers that are listed in the document, which may include the following special powers:

  • Create, amend, revoke, or terminate an inter vivos trust.
  • Make a gift.
  • Create or change rights of survivorship.
  • Create or change a beneficiary designation.
  • Authorize another person to exercise the authority granted under this power of attorney.
  • Waive the principal’s right to be a beneficiary of a joint and survivor annuity.
  • Access the content of electronic communications.
  • Exercise the fiduciary powers that the principal has authority to delegate.
  • Disclaim or refuse an interest in property, including a power of appointment.

If limiting the Agent’s power to this list is not desirable, a General Power of Attorney, which is broader in scope, may be more appropriate.

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5 Things to Consider When Receiving an Inheritance

Those who fall in the age range of 60-80 currently hold approximately half the wealth in the US. As a result, their children are expected to receive the largest inheritance across all generations. While there are expectations that this inheritance won’t go as far as it would have years ago due to high inflation recently, the amount passed down can still help many young adults out financially when used wisely.

To some, receiving an inheritance may come as a surprise. Others may be aware of the possibility of an inheritance or even expect it. This can lead to anxiety over the transfer of wealth and how to best manage their inheritance. According to a study conducted by New York Life, under half of adults who expect to receive any inheritance, whether in the form of cash or non-cash assets, feel comfortable with managing it.

If you anticipate receiving any type of inheritance in the future, knowing your options is critical. Here are some tips on how to approach receiving an inheritance.

Manage your expectations

If you are expecting an inheritance, keeping yourself in check with the amount you may receive is best. If your parents, or whomever you may inherit from, do not have a Will or beneficiaries on their accounts, their estate would go to probate, which can be lengthy and costly. Or there may be accounts where someone else is named a beneficiary but was never updated, such as an ex-spouse. Further, end-of-life costs may add up, leaving less to distribute.

If you’re comfortable, talking to your family members may help clear the air of any confusion. A great place to start would be to discuss your parents’ accounts, such as their will or retirement plans.

Talk to an expert

If you are unsure where to begin or want extra help, contacting a financial advisor can help. There may be some paperwork to do, or you may have questions about tax implications, and seeking the advice of an expert is the best way to ensure you’re doing all the correct steps. A financial advisor can also help you create short- and long-term goals of what to do with your finances and help you manage any non-cash assets.

Pay off some of your debts

Assessing your debts to see if it is possible or pay some off may be a hot item on your to-do list if you receive an inheritance. Depending on where you are in your life, some possible debts would be credit card debts, student loans, mortgages or car loans. Assess the different interest rates on your debts and make choices that work the best for you with your financial goals in mind.

Save and invest

Depending on the sum of your inheritance, it might make sense for you to put some of the money away. While putting it in a savings account might be a first instinct, you’ll want to assess which account is best and will provide you with the best rate.

If you don’t need your inheritance money for any short-term goals, looking at other ways to invest your money is a good idea that could help you earn more on your assets compared to that of a savings account. Putting your money into a certificate is a good way to safely put your money away and earn a set interest rate for a period of time. Or, investing your money in a stock market is an option if you have a longer timeframe and are comfortable dealing with stock market volatility.

Get your own estate in order

It is never too early to get your own estate in order, and after you receive an inheritance is a good time to either start the process or update your current documents. Start by checking to make sure you have a record of all your accounts and assets in a safe place. Then, see if you need to add or update the beneficiaries linked to the accounts. Lastly, start a will or update your current one.

While starting this process now may feel daunting, it will make all the difference to your family later on. If you have recently lost a loved one and are in the process of receiving an inheritance, know that you can take time to grieve before jumping into your finances. There’s no need to rush.

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