Do’s and Don’ts When You Receive an Inheritance
Receiving an inheritance can be both a blessing and an immense amount of responsibility. It’s essential that you approach this newfound wealth with careful consideration and strategic planning to avoid any issues.
In this article, we discuss some of the important do’s and don’ts you should consider when you receive an inheritance.
The “Do’s” When You Receive an Inheritance
Take Your Time
One of the first “do’s” is to take your time. It’s crucial to avoid any hasty decisions right after you receive an inheritance. Instead, take a step back and let the initial emotions settle. This period allows you to think clearly and make rational choices about how to manage your inheritance effectively.
Work With a Professional
Another “do” is to consult a financial professional to help you understand the tax implications, investment opportunities, and long-term financial impact on your future.
Pay Down Your Debts
Another important step is to pay down your existing debts. Using inherited funds to clear high-interest debt can significantly improve your financial health and free up future income.
Save and Invest
Additionally, consider using your inheritance to set aside an emergency fund if you don’t already have one. This fund can provide peace of mind and financial security in case of unexpected expenses. You should also think about investing a portion of the inheritance. Diversifying your investments can help grow your inheritance over time and safeguard against market volatility.
The “Don’ts” When Receiving an Inheritance
Don’t Be Impulsive
Firstly, avoid making large, impulsive purchases. It’s easy to get carried away with the sudden influx of money, but lavish spending can quickly deplete your inheritance.
Don’t Neglect Taxes
Don’t neglect the importance of legal and tax obligations. Inheritances can come with complex tax requirements, so it’s essential to understand your responsibilities and ensure compliance to avoid any legal issues.
Don’t Forget to Update Your Estate Plan
Lastly, don’t ignore the importance of updating your own estate plan. This is an opportunity to reassess your financial situation and ensure that your own wishes are clearly documented for the future.
Make The Most of Your Inheritance with the Help of Bloom
Receiving an inheritance can be a great opportunity for financial security and growth; however, it’s important to make sure that you manage it correctly. Taking the time to consider all of your options will ensure that you are making informed decisions about how to best use this newfound wealth.
If you are looking for a more personalized investment management service, Bloom Investment Counsel, Inc. has experience helping high-net-worth individuals and families preserve, protect, and grow wealth while taking into account your legacy goals.
Connect with us today by calling us at +1-416-861-9941 or emailing us at info@bloominvestmentcounsel.com
This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.