Receiving an unexpected bequest of wealth can bring up a whirlwind of emotions like gratitude, grief, and even anxiety. When it's incidental, you won't have a prepared strategy, let alone an inheritance management plan for what to do with it. Even if you know it's coming, having a plan ready for when it arrives can be challenging.

This confusion can cause the “What If Monster” to start stirring thoughts in your brain. "What if I inherit money and don't know what to do?" You might be concerned you'll make the wrong decision and waste a once-in-a-lifetime gift if you don't feel prepared to take on a large sum of money.

You can rest easy knowing that you don't need to have all the answers right now. All it takes is a thoughtful plan and some expert guidance, and you can make the most of your inheritance.

Breathe Before Acting

If an estate is thrust upon you, you might feel like you need to make a quick decision. Unless you are in financial distress that the legacy could fix, the best thing to do is to wait and focus on inheritance management. Take some time to let your emotions settle, understand what the legacy includes and whether any regulations or conditions apply, and determine any legal requirements or tax implications. Allowing yourself to breathe helps you decide with clarity.

Understanding Your Inheritance

How you spend your bequest depends on the type of assets that are included. You might have been given cash, retirement accounts, real estate, or business interests.

While cash is potentially the easiest to spend, it still requires setting a strategy for inheritance management. If you receive retirement accounts, you need to consider tax and distribution rules. Finally, real estate/business interests require decisions about managing, selling, or transferring ownership. Once you know your type of endowment, you can make the best strategy for it.

Learning to Avoid Common Emotional Traps

When you receive an estate, you might be overwhelmed by pressure, guilt, or a sense of responsibility to do "something big." It can be too easy to allow yourself to fall into emotional decision-making, like giving away a bunch of money without thought or rushing into investments.

You need to take time to decide how you want to spend the money. After all, it was left to you. Process the loss that led to receiving an estate, and remember that it was meant to benefit you, not burden you.

Coming Up With a Plan to Honor Your Goals and Theirs

While the money is ultimately yours to spend, if you want the spending to honor the person who left it to you, that's a valid option. Working with a financial advisor will allow you to create a strategy that helps with your current needs and long-term goals and honors the person who left it to you if that's what you desire.

Your plan might include things like paying off debt, investing, saving for retirement, giving to worthy causes, or helping your family's future, among other things. Remember, while there is no "right" way to use your inheritance, there are thoughtful ways.

Quieting the “What If Monster”

If you've recently inherited money or know you will be soon and aren't sure what your next steps are, take solace in knowing you are not alone. The best thing you can do is ask for guidance. At CrossleyShear, we can help you navigate inheritance management with compassion, clarity, and strategy.

Remember, you don't get financial confidence by having all the answers. It comes when you know who to turn to when you have questions.

Let's start the conversation. Get in touch with us today.

Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Dale Crossley and Evan Shear and not necessarily those of Raymond James.