Many of us would like to believe otherwise, but our experience and research at The Humphreys Group shows that a person’s feelings and attitudes about money can affect their approach to financial planning. We’ve also seen how emotions may exert an even stronger influence on those who’ve received an inheritance; in response, we offer our clients several strategies to help them navigate the choices and decisions that arise from inheriting a financial gift.
- Take time – time to grieve, to remember and to appreciate the person from whom you’ve received your inheritance. Allow yourself to adjust to new life circumstances that the person’s passing, and their gift, may cause. Don’t rush toward decisions without processing your emotions.
- Begin to assess your financial situation when you feel emotionally ready. Review your debts, your dreams and your goals. Consider how your inheritance may help you address these.
- Consult with trusted family members about your possible next steps. Will you use your inheritance to pay your debts down (or off)? Will you set aside funds for a child or grandchild’s education? Will you put money toward retirement? Will you direct monies toward a charity? Will you use some of the funds to travel? Explore some combination of these or other potential courses of action.
- Work with a financial advisor to develop a long-term financial plan for making the most of your inheritance. You should also meet with your accountant and attorney to fully understand the ramifications — for instance, taxes and legal issues — related to your inheritance.
- Resolve to review your plan, with both family members and professional advisors, on a regular basis. Checking in with these parties from time to time will help ensure that you are thoughtfully and clearly making the most of the empowering gift that an inheritance can be.
At The Humphreys Group, we realize money is an emotional issue for many people. We also know that receiving an inheritance while dealing with the passing of a loved one can heighten the emotionally-charged stakes of managing individual and/or household finances. We have the knowledge and expertise to offer assurances and strategies on how to approach financial planning in light of an inheritance. Contact our advisors today to begin the conversation.