Securing Financial Wellness After Receiving an Inheritance

Receiving an Inheritance

After a will has been presented, or the court has ordered an intestate succession, an estate’s assets are distributed amongst beneficiaries, such as a spouse and children. The division of assets is one of the most important parts of estate planning and the probate process, and receiving an inheritance during the highly emotional time after the death of a loved one can be both overwhelming and life changing.

January is Financial Wellness month, and because we take pride in our commitment to protect your financial interests, we have compiled a list of some suggested actions to take upon receiving an inheritance. This list, however, should not be considered the “be-all and end-all” solution to all inheritances; for that, we recommend speaking to an experienced attorney to discuss the specifics of your inheritance claim.

Understanding What an Inheritance Is

It might come as a surprise for some to know that an inheritance is not solely limited to money or property. According to Ameriprise Financial, one of the most important steps to take upon receiving an inheritance is to assess what the inheritance entails. This can include a house (or other real estate), stocks and bonds, retirement plans, IRAs, and life insurance claims, in addition to any money left to a beneficiary from a personal account.

It is also important to determine the timing of the distributions—in other words, when the assets will be available, and if they will be available immediately or distributed over time. It is also important to know about tax implications, because while an inheritance comes after the probate period, there might be additional taxes that apply to your new assets. A licensed tax professional or an attorney experienced in probate and estate planning can help you navigate your inheritance’s unique circumstances and help you to determine these details.


Thinking About the Future

It is estimated that 7 out of 10 people who receive a large sum of money at some point will lose it all after only a few years. This is because depending on how we “label” money determines how we spend it, and because an inheritance is something usually received without warning, a beneficiary might be tempted to expend their newfound assets quicker than their own personal assets.

Even the smallest of inheritances can help bridge the gap between struggling and living comfortably. By using part of an inheritance to repay debts and another part to invest in long-term gains, an inheritance can not only respect the wishes of a deceased loved one, but can also help you navigate your life’s finances comfortably.

Further Estate Planning

Besides repaying debts and investing in the future, an inheritance can also be invested into guaranteeing a future for your own beneficiaries. Discussing an inheritance with your children can be a difficult and emotional task, but by disclosing your financial goals for them as mature adults, you are helping them secure their own financial wellness by setting an example.

Further estate planning after receiving an inheritance can be done in a number of ways. The most common way to transfer money to an heir is through setting up a trust. This guarantees that your assets set aside for your children are untouched until they are legally able to receive the trust left in your name. Working with your attorney can guarantee that the wishes and terms surrounding your will and trusts are met with integrity and personal attention to detail.

By practicing financial wellness after receiving an inheritance, you can guarantee that your loved one’s assets are preserved and maintained during your lifetime and beyond. At Forbes & Forbes Law, we are dedicated to ensuring your financial security in life and beyond. For more information, or to discuss estate planning, contact an attorney today for a free consultation and to discuss the specifics of your case.

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