YOU HAVE MONEY, NOW WHAT?
Today, I’d like to discuss a topic that I have helped many of my clients with: what to do if you receive an inheritance. Generally, I advise my clients not to include POSSIBLE inheritances as part of their overall financial plan, because you just never know what may happen, and it’s best not to count on savings that you haven’t actually saved yourself.
However, in the case that you DO receive an inheritance, the most important piece of advice I can give to you is to have a plan for the money, and to stick to that plan.
Unfortunately, I have watched too many clients experience a windfall, spend freely, and get used to a lifestyle that becomes too expensive to maintain, eventually spending everything they have received.
The good news is that if you are experiencing the grief of losing a loved one, you don’t have to make any financial decisions immediately. In fact, it’s probably best not to. Financial decisions based on emotion, are usually not good decisions.
It’s common for friends and family members to start offering unsolicited advice on what to do with the funds. And while they most likely have the best of intentions, I recommend that you consult with a professional. If you don’t have a trusted financial advisor, CPA, or attorney, you may consider interviewing a few. Bring a trusted family member or friend along with you to be an extra set of ears.
In short, there are many things you can do with an inheritance, including: paying off debt, giving some away to charity, building your emergency fund, saving for retirement, or kids’ college funds. Simply enjoying some of it is also perfectly ok.
If you think about your loved one’s hard work that went into earning the money you inherited or how they planned for your future in the event of their death, it may help you to stay accountable for keeping a responsible plan in place.
If you have received an inheritance, or are about to, and have questions, or need to set up a financial plan for the funds, please don’t hesitate to reach out!
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