Inheritances often come as a surprise, and an emotional surprise at that.
Unlike most other gifts in life, inheritances arrive in the midst of sorrow and confusion. Knowing how to strategically and tactfully handle an unexpected inheritance can be a real challenge.
U.S. News & World Report recently talked with one beneficiary who couldn’t bring himself to sell the stock shares he inherited from his mother even though they were rapidly losing value.
“I had to get over the thought that this is selling my mom,” he said. “It’s a very strong emotion.”
At O’Connell Law LLC, we understand how complicated matters of inheritance can be. Even setting the emotional entanglements aside, financial management has never been an easy subject to master. There’s a lot to consider, and with so much on the line, you want to make the right choices.
Here’s World Report’s advice:
• Promise yourself you won’t squander the money on frivolous spending or foolish investments. Not only is that just bad finance, it also runs the risk of regret. You don’t want to feel like you dishonored your loved one’s legacy later down the line.
• Consider paying off your debts. While there’s no one-size-fits-all approach, paying down debt is often a wise use of inheritance money. Just be sure you have a plan in place to avoid replacing your eliminated debts with new ones.
• Inheritances also make great foundations for savings accounts. Create an emergency account, a retirement fund, or a long-term care savings plan.
• Above all else, talk with a professional before acting on your own. An experienced estate planning lawyer can help you sidestep critical pitfalls.
What if you’re on the giving end, though? A professional can help with that too. Precise and strategic drafting, coupled with clear communication with your beneficiaries while you’re still alive, can help you make sure that the money you leave behind is put to good use after you’re gone.
