Remember Baby Boom, where a devoted career woman "inherits" a baby and doesn't know how to fit the baby in her busy work schedule. She takes to country life and finds an answer.

But in real life, the answers may not come that easily. Take this simple query from one of our Bangalore-based readers. He said he inherited a bank fixed deposit from his wife after her death and didn't know whether the amount was taxable in his hands. He was also not sure whether to continue with the account or to invest the amount in some other saving instrument.

Most of us encounter such questions at some point in life. What the inheritor needs to watch out for is a succession plan, mainly a Will, the costs of transferring the title of the assets, and the taxability of the bequeathed funds or assets.

Importance of a Will. "In the absence of a Will, all the legal heirs under the relevant succession Act become owners in equal shares," says Gautam Nayak, a Mumbai-based chartered accountant.

 It is to be noted that mere nomination does not make a person the legal beneficiary. The Will supersedes all nominations made in any investment paper. Suppose a man nominates his wife while investing in mutual funds or insurance policies, but mentions in his Will that his wealth should be divided equally between his wife, son and daughter.

In this case, the money obtained from the insurance or mutual funds will not go to the wife alone, but will be divided between the three parties as mentioned in the Will. All the legal heirs mentioned in the Will are the stakeholders to any asset that a person may leave behind.

Title change. Inherited assets like real estate or shares need a title transfer. The inheritors will have to get such assets transferred in their name from the name of the  original holder. However, certain assets like mutual funds, fixed deposits, savings accounts, and post office savings do not require any such change.

Costs. A title change also involves transfer costs -- for shares the transfer fee is around 0.5 per cent of the value of the shares at the time of transfer and for property it is around Rs 1,000. Besides, the entire process involves a whole lot of paperwork. There are no costs involved in acquiring assets like deposits or mutual funds.

Taxability. "According to the present laws in the country, no tax is charged on inherited assets," says Nayak. Acquiring assets such as shares, mutual funds, fixed deposits, post office savings, bonds, property or any other financial asset does not attract tax in the hands of the inheritor.

However, the new owner would have to pay taxes on any income or gain arising from the inherited asset or financial product. An inherited house or shares would attract capital gains tax when it is sold.

To calculate the tax on them, one needs to know the actual date and cost of acquisition (when the original holder acquired it) of a share or a property. The resulting gains, if any, will be taxed as long-term capital gains.