What Are My Rights As a Beneficiary or As an Heir?

Hi. This is Marc Herbert from Herbert Law Office with the Question of the week, which is, what are my rights as a beneficiary or as an heir? And even though those two sound very similar, they’re actually very different because usually if you are a beneficiary, that means that there’s a trust or some other type of account that designates you as a beneficiary in certain documents, certain types of assets, an heir technically means that you’re listed as someone who’s going to receive a gift through a will.

And so most wills that are standalone wills are going to end up in probate court. So a lot of your rights as an heir under a simple will is going to be dictated by the terms of the will through the probate process, which is a whole different question of the week. But for beneficiaries, your rights really depend on the type of asset that we’re talking about.

Also the title on that asset and the value of that asset. So you can be a beneficiary on a life insurance policy, a 401k, an IRA policy, some other type of investment, maybe bank accounts, things like that, but also title controls a great deal in terms of are you sharing that asset? Exactly how does the asset come to you as beneficiary?

So there’s a lot of estimates that about 50% of all inheritances go unclaimed by beneficiaries or heirs. But actually, if you know the rules, there’s a way to get much of those accounts to you quickly. Again, it depends on the type of asset title and value. But for bank accounts, for example, at $166,000 or less, if you’re the named beneficiary, there is a process, but it’s about a 60 day process where they’ll just release that money to the named beneficiary.

Once you do a simple affidavit, if you’re talking about 401K’s and IRAs, your rights as a beneficiary under those accounts really need to be discussed with a financial advisor. Now, we share office space with Kelly Financial Group, the best financial advisors in the Antelope Valley. They can walk you through all the new laws under the Secure Act of 2019.

It really changed a lot for beneficiaries for those types of assets. And then if you’re talking about land, you have to worry about what’s called step up basis. You have to worry about if there’s multiple parcels in different states and even if all the parcels are in California, you have to worry about Proposition 19 that just passed in November of 2020.

So there’s a lot of questions when it comes to inheritance, when it comes to receiving assets as a beneficiary or an heir. What we like to do is we like to sit down with you, go through your situation, answer all your questions, give you as many good options as possible. In my opinion, probate is always the last option, the worst option usually.

So if we can avoid it, we try to come up with strategies to do that. And then if we’re stuck with the probate process to try to make that as fast and inexpensive and least confusing as possible. So the ultimate solution to this problem is creating an estate plan and then to monitor that over the years to make sure it’s still valid.

At Herbert Law Office, we offer a free consultation to talk about your situation. I encourage people to write down all their questions, bring those in so we can get you the answers you need to make a decision on which options work best for you and how best to handle this situation. So I hope that information has been helpful for you.

Please feel free to share this video with your family or friends who might be interested. And if you’d like to sit down, just give us a call at 6612739007. Talk to you soon.