Receiving an inheritance can be life-changing. It’s never easy to lose a loved one, though, and finances may be the furthest thing from your mind. Being prepared and organized can make this stage easier, and if you have recently come into an inheritance, here are some steps to take:
- Take a mental break. Losing a spouse, sibling, parent or other loved one is never easy. Take time to reminisce on the good times, life lessons, and memories you all shared, and consider how your loved one would want you to remember them. Also, reach out to others to ask for help at this time. We have all been through periods of grief, and they are never easier if we navigate them alone.
- Assess your own financial situation. I have worked with families who have net worths of $20 million and those with much less. No matter where your family’s wealth falls on the spectrum, when you receive an inheritance, it can alter the financial goals you have planned and the time frame you might have to achieve them. This could finally be the time you decide to retire, pay off debt, help a child buy their first home, take that dream vacation, or donate to a charity. Working with a financial planner can help give you peace of mind and confidence as you assess whether it is time to make a life change.
- Take the next step. Once you have assessed where you are financially, it’s time to come up with a game plan. Talk with a financial advisor about your goals and weigh your options when it comes to investment. You may decide to immediately pay down debt or to invest the money for a potentially bigger return. Your financial advisor can help you determine which debt to pay off first or where to invest, depending on your goals and your tolerance for risk.
- Involve your own loved ones in your financial planning. When a loved one dies, especially if the death is unexpected, you may find yourself drowning in financial paperwork and online accounts, trying to find records of investments, debts, property, insurance, or savings. If you can involve your spouse or children or other trusted individual in your current financial planning, you will set everyone up for a smoother period of transition. If you are already working with a financial planner you trust, don’t keep the planner a secret from the person who might inherit those assets. One client we worked with did not include his wife in their financial planning discussions, and she ended up having a much different tolerance for risk than he had. When he died during the pandemic and the stock market dropped, she sold everything and locked in losses she will never recoup. On the flip side, I have also worked with a husband who brought his wife to every meeting. Even though they had plenty of assets, when he died, his wife felt like she needed to go back to work to pay the bills. Because she had been involved in their planning meetings and trusted me as their advisor, I was able to quickly reassure her that there was no need to go back to work. She kept up with their investments and pursued volunteering opportunities and hobbies as she transitioned into a new phase of her life.
At Sagace Wealth, we believe that wealth goes beyond just financial assets. We take pride in knowing that our clients have a seamless plan in place to achieve what is most important to them now and for future generations. Whether you recently came into an inheritance or might find value in reviewing your current plan, we welcome the opportunity to help.
If you are ready to discuss your financial plans, reach out to us at bclark@sagacewealth.com.