Where To Begin When You Inherit A Large Sum Of Money

Inheriting a large sum of money can feel overwhelming. Not only is there grief attached to the inheritance, but a windfall of money can also cause confusion. With such a large amount of money, you might not know where to start in order to manage it correctly.

Do Not Act Too Fast

You are not on a timeclock. Once you have signed the transfer documents and the money has been transferred to your account or the check has been mailed to your home — there is nothing else you need to do in the immediate future.

You should never feel as though you have to rush and make a decision on what to do with the money, as you are likely to make a move that you will regret in the future. From 401k accounts to IRAs, many accounts have provisions in place that give the inherited owner time to decide what to do with the funds. An advisor can help you determine how much time you have based on the assets you gained.

Define Your Goals

Sit down and think about what your goals are for the money you have gained, even if you do not know where to begin. For example, do you want to pay off your bills, give some money to charity, and then invest the rest? No single goal for the money is wrong or right, but you do need to define your goals before you move forward.

It is a good idea to sit down with a financial professional once you have a general idea of what you want to do with the money to learn more about options that you might not be aware of.

Allocate Everything

One of the most important things you can do is to work with a financial professional to allocate your funds. In addition to providing investment opportunities and portfolio management services, many wealth management professionals can also create and maintain accounts for you.

You can use these accounts to keep your assets separate. For example, you can have an account for added savings, one for bills and expenses, and another account for mad money. To ensure you do not spend more than you intend, it is important to allocate.

If you have inherited a sizeable estate, ideally, you want to get professional help. A wealth management professional will work with you to discuss your goals, tax considerations, and needs to help ensure you direct the money the right way.

For more information, contact a wealth management service today.