Receiving an inheritance: tips from Elfin and Preferred Banking

Inheritance

16/01/2025 • 3 minute read

Preferred Banking Editorial Team

What should you do when you receive an inheritance? What’s the best way to use that money? And what about taxes? In this video, Puck Landewé from Elfin – the biggest financial platform for women in the Netherlands and Belgium – speaks to Bobby LeFebre, Preferred Banking adviser.

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What’s the first thing I need to do after receiving an inheritance?

Bobby: “The first step is to accept or reject the inheritance. You’ll be contacted by the executor of the will. If you’re the executor, you must tell the notary about your decision. There are two ways of accepting an inheritance:

Accepting outright. This means you accept the inheritance, including all its assets and debts. This decision cannot be reversed. In theory, you could inherit a net amount of debt if the debts are higher than the assets.
Accept under benefit of inventory. You accept the inheritance only if the value of the assets is higher than the debt.

You can also reject the inheritance, in which case it mostly passes to the second person in your bloodline.”

What can I do with the money I inherit?

Bobby: “It’s normal to feel excited about receiving money and immediately wonder how to spend it. But it’s wise to have a good think before taking action. What are your financial goals? If you’ve made a financial plan in the past, this is the moment to take another look at it.

If you don’t have a financial plan, this could be a good time to make one – just to see how this windfall could benefit you now and how you could best use it in the long term.”

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This must all depend on the amount you inherit, right?

Bobby: “True, but it also depends on your financial situation. One person might want to enrol on a course that they couldn’t have afforded previously. Another person might have been dreaming of owning a home. Everyone is different, which is why it’s important to go over your options.”

What do people usually do with their inheritance?

Bobby: “People have different goals, and that’s what determines what they do with the money. One person might pay off their mortgage or other debts to alleviate financial pressure and get their interest payments down. Another might invest in their career by upskilling.

Some invest the money or put it into their savings, so that they can retire early. Plenty of people put the money towards home renovations, such as a new bathroom they’d been saving up for. Many others put it in their pension pot or use it to top up a pension shortfall.”

What if you don’t have a financial plan yet?

Bobby: “Whatever you do: don’t rush your decision. Most people park their inheritance money in a savings account before taking action. It’s always wise to talk to a financial adviser, as they can tell you how the inheritance can help you reach your financial wishes and goals.”

What about taxes?

Bobby: “That depends on multiple factors: which type of will the deceased person had, their relationship to the recipient and the amount inherited. The inheritance is taxed at different rates depending on its value. These rates change every year.”

What if somebody dies without leaving a will?

Bobby: “That does happen from time to time. Dutch inheritance law provides a safety net. If you suddenly pass away and are married with children, your partner and children inherit equal portions of your estate. Your children will usually have a claim to a minimum portion.

If you don’t have a partner or children, your estate transfers to your parents, siblings or other relatives. It will never get lost or be transferred to the state.”

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