What Happens If You Inherit Gold?
When inheriting gold and precious metals, several things should be kept in mind when doing so. One important consideration is that these assets may not be taxed until sold;
Many heirs may be tempted to liquidate their inheritance as quickly as possible, which may result in prices far below its true worth.
Taxes
Gold and other precious metals typically make up a significant proportion of an estate’s assets, making them subject to inheritance taxes depending on their value and state laws. Heirs should seek professional financial and legal advice prior to inheriting gold in order to be informed about any implications it might bring upon their inheritance.
First step should be obtaining a professional appraisal of your metals from a reputable and accredited precious metal dealer, with careful attention paid to both gold content and numismatic value of coins inspected for evaluation. Beneficiaries will need original invoices/receipts in case they decide to sell their inheritance later on.
An alternative option for inheritors to preserve and grow their inheritance over time is investing it with tax-advantaged vehicles, such as Precious Metals IRAs. While this might reduce taxes when estate settlement occurs, beneficiaries will miss out on potential value growth of metals over the short-term.
Storage
Gold as an asset offers distinct advantages when it comes to inheritance. Understanding its tax implications and including them into your financial planning will enable you to make informed decisions regarding selling or keeping any inherited gold that comes your way.
For those that opt to keep their inherited gold, it is imperative that it is kept secure. Many choose safe deposit boxes at the bank while others opt for home safes; it is key that there are different storage methods so a burglar would have difficulty gaining entry and taking your valuables.
Make sure that one trusted confidante knows where your precious metals are stored if possible, to prevent confusion in case of natural disaster or another catastrophe that might impede access. A notarized treasure map may also prove helpful here. Lastly, ensure that assets you hid aren’t accessible by domestic help such as gardeners, cleaners or electricians.
Insurance
Assuming ownership of precious metals can be both exciting and perplexing. Beneficiaries need to understand all tax implications, storage options, and make sound decisions based on their circumstances.
Gold and other precious metals are valued based on the price at which they’re sold, meaning inherited assets could become subject to capital gains taxes and other federal taxes upon liquidation.
Maintaining records is also necessary in establishing cost bases and helping heirs understand the value of their inheritances. A notarized “treasure map” can also serve as an aid against disputes among beneficiaries or avoid confusion if one or more loved ones suffer from dementia, stroke or any other conditions that might impair memory and understanding of what their inheritance includes.
Beneficiaries looking to sell their inherited precious metals should work with a reputable precious metal dealer that offers top dollar for their investments and ensures an equitable and transparent process. Beneficiaries must ensure they consider the long-term value of their investment before making a hasty decision on selling.
Gifting
Gold inheritance can create a lasting legacy. But before making any decisions regarding what to do with your precious metals inheritance, a few things must be kept in mind before taking action. We advise consulting with financial, pensions, legal and tax experts in order to understand each asset class and their related tax implications.
Physical gold and silver bullion bars and coins should be seen as investments, and can therefore be subject to capital gains tax if sold later on. Therefore, it’s crucial that records of your investment items be kept, along with invoices or records showing grade certificates or manufacturer marks relating to them.
As another step to protect the value of your assets, having them appraised by a trusted precious metals dealer can also help determine their worth and allow beneficiaries to make informed decisions regarding their inheritances. Furthermore, doing this may also prevent disputes among beneficiaries in case your estate goes through probate proceedings.
Categorised in: Blog