Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Inheritance

What it is:

An inheritance includes those assets of an estate that are bequeathed, in whole or in part, to specific heirs.

How it works (Example):

The assets that comprise an estate are customarily transferred to individuals specified by name or relationship (e.g. "Howard Jones, III or "grandchild") in the will of the deceased. In the absence of a will, estate assets are transferred according to laws that protect the assets of the deceased (generally passing them to descendants in a specific order).  Once transferred, an inheritance is heavily taxed.

For example, Jim's estate is worth $10,000. His will specifies that his son and daughter each receive $5000. Following Jim's death, the son and daughter each receive $5000. This is their inheritance.

Why it Matters:

An inheritance represents the material legacy an individual leaves behind after his deThe definition of inheritance on InvestingAnswersath. In addition to the family dynamics involved in the transfer of an inheritance, there are significant tax implications for the inheritors depending on their circumstances and on the value of assets received.

Related Terms View All
  • Z
    On the Nasdaq market, for example, the letter Z after the ticker (an XYZ Company security...
  • Street Expectation
    Market analysts consider economic conditions, consumer sentiment, research and...
  • Minor Downtrend
    The minor trend is the last of the three trend types in Dow Theory -- the other two types...
  • Minimum Margin
    When a trader engages in trading on margin, the margin account must contain at least $2,...
  • Brokered Certificate of Deposit
    A CD is a time deposit with a bank or financial institution. The investor agrees to leave...