January 4, 2023

A big inheritance can seem mostly an advantage but also a potential challenge, especially because you may need to use that money someday, but it can also place a burden on you to answer important questions about the best way to spend that money. It is very important to take your time in deciding what to do with these funds and to think carefully about how you may allocate it in several different directions.

If you are currently dealing with high interest debts, such as personal loans or credit card debts, paying these off sooner rather than later can be very valuable for inheritance purposes. If you do receive a significant inheritance from a loved one, do not feel rushed into making any decisions. You might want to sit down with your financial advisor and financial planning team, along with any other professionals, such as your CPA or your estate planner to discuss your options.

What you do first depends on the kind of inheritance you receive. If you inherit cash, you may wish to put it somewhere safe, such as a credit union or federally insured bank for the short term. Receiving other assets like retirement accounts, securities, real estate or business interests means that you may need to work directly with the executor of that person’s estate to ensure that everything is appropriately transferred into your name.

Seeking advice is very valuable for identifying some of the potential pitfalls and opportunities when receiving a big inheritance. Do not forget about the opportunity to invest as much as you can once you have dealt with major debts. With the help of a financial planner, you will probably want to begin to invest this money. You should always work with a qualified financial professional to make sure that you are properly diversified with various different kinds of investments. Contact our firm today to learn more about how we can help.