Successfully Receiving an Inheritance
If you are receiving an inheritance, or are expecting to receive one shortly, it has likely triggered mixed emotions in you. You have lost a loved one and also experienced monetary gain. Studies show that a third of Americans who received an inheritance completely spent it within two years of receipt. Below are five practical steps for you to follow to maximize and protect your inheritance.
Take Your Time.
Allow yourself to be emotionally ready. Making decisions on what to do with your inheritance while you are experiencing challenging emotions is not optimal. Be sure to commit to self-care — whether counseling, meditation, or family and spiritual support to help you work through this process.
Before you make any major decisions — such as paying off debt, investing in a business idea, or something else — make sure you seek professional financial advice. This is especially true if you have never managed a large amount of money before. Of note, an inheritance may affect your ability to receive certain benefits, so working closely with an attorney can help minimize any impact it may have.
Understand whether or not there are any restrictions on receiving your inheritance. Whether you are being given the assets outright, relying on trustee discretion as to the distribution timing and amount, or something in between, your estate planning attorney can help provide solutions for you. The estate planning attorney can also assist you if you are subject to a state inheritance tax.
Update Your Estate Plan.
An inheritance will change your asset level and mix. Therefore, your estate plan needs to be reviewed and possibly adjusted to make sure you are fully protecting yourself and your loved ones.
If you are yet to receive the inheritance but it is on the horizon, consider working with the relative that will leave assets to you and your estate planning attorney. Creating an “inheritor’s trust” instead of leaving the assets to you outright — although a difficult topic to discuss — can provide long-term asset protection and preservation for you.
How We Can Help
Receiving an inheritance can be bittersweet and emotions may run deep during this time. But putting your inheritance to work to help achieve your short-term and long-term financial goals is a great way to avoid misusing these assets. Being informed is half the battle, so give us a call right away to learn more about your options under the law. Contact Hudack Law today at (877) 314-4309 Toll-free, please visit areas of service (open link in a new tab) or hudacklaw.com (open link in a new tab).