October 14, 2022

For some people, they don’t even know where to start when they’re expecting a financial windfall. Whether it’s from the sale of a business, a lawsuit, an inheritance, or some other reason, there’s one thing all these transfers have in common: you need help planning for how to best use it.

There might be some immediate needs you’ll address on your own, such as paying down student loan debt or fully covering a mortgage. From there, it seems fun to think about all the other things you can buy now that you have an influx of cash.

But there are legal and tax-related issues that must be considered carefully. Hiring an outside professional to help you think through what makes the most sense for your situation empowers you to arrive at a financial decision about what will really give you the most help while avoiding many common pitfalls associated with a new bounty of money.

There are at least three different outside professionals who can help you work through the most important decisions around this sudden shift in your financial situation:

• An estate planning lawyer, who can help you ensure that you have a plan for who will manage your finances if you’re unable to through a power of attorney and a plan who who or what you’d like to support with these assets in your estate plan.
• A financial planner, who can help you work the specifics into your debt paydown plan, your investment plan, and how you’ll save for your family’s future.
• A tax advisor or CPA to discuss what you need to do to protect your new assets and ensure that you have the right tax strategy in line.

From there, your team of professionals might also recommend other conversations with experts, based on the kind of windfall and the amount you’ll receive.