Losing a loved one makes inheritance a complicated ordeal for many heirs. Receiving an unexpected inheritance can either leave you excited or anxious depending on the situation mainly since it can turn you into a millionaire or billionaire overnight. Regrettably, those who don’t have a clue on what to do after inheriting property or great monetary gains, end up blowing away their inheritance within 5-10 years.
What are the most practical things to do after receiving an inheritance
Resolve debts and Taxes
Your first priority after receiving an inheritance should be resolving all the outstanding debts and taxes your benefactor left behind. Consider consulting your family estate planning attorney or financial advisor when determining different taxes including inheritance taxes and State or Federal estate taxes for a stress-free experience. Regrettably, those who don’t have a clue on what to do after inheriting property or great monetary gains, end up blowing away their inheritance within 5-10 years.
Receiving a considerable inheritance does not give you an excuse to be extravagant. While splurging on new designer clothes, expensive vacations, flashy cars and partying is allowed, it’s wise to be thrifty when spending your inheritance. Evaluate your financial options carefully before investing in anything. Splurge on projects that will grow your wealth rather than put you in debts. Overspending is only a priority for unfocused young heirs. Wise investors reason and spend in moderation even when investing in new assets. Evaluate your financial goals and invest wisely without exposing yourself to various investment risks.
Don’t loan your money.
Loaning money is the fastest way of losing your monetary inheritance. It’s obvious that people will come to you for financial help after receiving an inheritance. Your friends, extended family members, colleagues among others will approach you for loans, but you should learn to say NO.Don’t be a people pleaser lest you want to lose everything you just inherited within a few years.
Re-evaluate Your Retirement Contributions
The best you can do after receiving an inheritance is to re-evaluate your retirement plan contributions. Better your retirement investment plan by increasing your contribution to a maximum level. While the benefits of making contributions are not instant, your effort will prove invaluable when the time to retire comes.
Think of Estate Planning.
Consider protecting your inheritance by establishing a good estate planning strategy. Your children among other beneficiaries’ future depend on what you do with your wealth. Re-evaluate Your Retirement Contributions Create a well-detailed will of your own, develop good saving habits, appoint a good financial advisor, and designate a power of attorney to avoid inheritance pitfalls.
Receiving an inheritance is certainly a great blessing. Be responsible and make the right decisions.