Being blessed with an inheritance seems like a good thing, and indeed it can have many beneficial effects on your life, but with a sizable inheritance also comes a great deal of responsibility. The fact is, deciding how to appropriately handle your inheritance will take time, work and attention to detail.
Regardless of how much money you receive, you will first want to take time to grieve and heal over the death of the loved one who left you the money. It is always best to put the inheritance money in a savings account or a very safe investment for period of time — may be a month or as long as a year. This will help you heal after the loss of your loved one and it will help you get more comfortable with the idea of having the increase in money in your accounts.
Taking this time will also keep you from making an emotional decision about your money. For example, sometimes people who inherit money spend it quickly as a kind of spending therapy — but this is not healthy and it is a surefire way to blow through your newly receiving money too quickly.
Next, pay off your debts, but do so strategically. Then, start planning your financial goals for the future. A professional financial planner can be very helpful in achieving both these steps. Whatever your situation, professional financial advice can help you make the wisest decisions for your future.
Different people will handle their inheritances in different ways, and California residents may want to consider this when planning their estates. For example, if you’re worried that your heirs will spend their inheritances too quickly, you may want to build your estate in a way that distributes assets to them over a period of multiple years. Ultimately, an appropriate trust- or will-planning solution can be found no matter what your family situation happens to be.
Source: Forbes, “4 things to do with an inheritance of any size,” Amanda Reaume, Dec. 28, 2015