Honor your loved one by being wise with your inheritance.
The very nature of an inheritance involves loss.
Whenever you experience loss, you need to take time to grieve.
At the same time, what are you to do with your inheritance?
You can and should wait a little while, according to The Reading (PA) Eagle Business Weekly article titled “What to do and what not to do with your inheritance.”
Do your financial planning when you are ready and will not be ruled by emotions.
What about when you are ready?
What should you not do?
Spending every dollar immediately is a bad idea.
Rushing into investments is also risky.
Do your research.
Do not overpay on taxes.
When it comes to paying taxes, you can certainly give too much to the government.
How do you know what the appropriate amount would be?
An experienced estate planning attorney can give you an idea of what amount must go to the IRS.
Do not immediately pay off your mortgage.
Depending on your circumstances, it may not be the best use of your finances.
Low interest rates and tax advantaged deductible mortgage payments may help you stretch your dollars further for retirement.
You do not have a financial plan?
Setting goals and a means to reach them is vital.
Do not let anyone pressure you.
Anytime you have money, people will want a part of it or a say in how it is used.
Do not be manipulated to share your money.
Now you have an idea of what to avoid.
What are wise things to do with an inheritance?
You can save your money several places.
Where might you deposit it, especially while you are looking for a more longer-term investment strategy?
- A short-term CD
- A money market account
- The bank
Pay off debt.
Debt is a bad mark on your credit and often involves high interest.
If you have credit or loans without tax benefits, start with these.
Do financial planning.
Set long-term and retirement goals before spending the money.
Have a plan?
Update your estate plan.
You have new assets.
Make sure they go to the correct people by updating your estate plan.
This should not be done alone.
Work with an experienced estate planning attorney to ensure it aligns with your situation, local laws and economic changes.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Reading (PA) Eagle Business Weekly (January 17, 2017) “Office Space: What to do and what not to do with your inheritance”