Investor Education | Inherited Money From Family? Six Steps to Take.
Inheritance can be tricky. While a large influx of money can be a blessing to those in debt, are looking to purchase a home, business, or are wanting to start investing toward retirement, inheritance typically means the passing of a loved one and an inevitable period of grief.
Inheritance coupled with grief can cause even the most financially savvy people to make common mistakes. While emotions are high, it’s unwise to make any major financial moves. Instead, allow time for grief and healing before moving forward. Below are six steps to consider:
1. Spending as a Form of Coping Therapy can be Dangerous
It may be easy for individuals to spend as they grieve as a form of therapy, avoid this habit by involving yourself in things like a High-Yield Savings Account where your money can benefit.
2. Grief Takes Time
People don’t allow themselves the time and space to process both the emotional and financial impact of the inheritance. People need the time to identify, quantify, and qualify their individual life, and financial goals.
3. Invest in the Future
People will emotionally spend inheritance on pure expenses, such as cars, vacations, and other goods. From a financial perspective, these are appreciating assets. Use this inheritance as an investment for the future, such as setting aside a down payment on a house, opening a brokerage account, or even thinking about continuing education.
4. Maximizing the Funds
People don’t do their research on how to maximize these funds. Instead of just putting it all into savings or just spending it, people should consider different ways to allocate it. This could be investing the money or paying off debt, etc...
5. Seek Help From a Trusted Professional
A financial adviser can help people make the most out of inheritance, as well as save them the time and stress of managing it alone.
6. Nature and Intent of the Inheritance
People simply retain inherited assets in the form they receive them. If it was a mutual fund, they keep it as is, or they store art and antiques. When capital passes from one hand to another, it’s key to understand the nature and intent of those proceeds. Determine its best use and act accordingly.
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Learn More | Contact Our Investment Specialists
Investment Consultant
Tam Hubert, CFP®, CFA
Investment Assistant
Kristi Remus
