Three Tips for Managing an Inheritance
In my job as a financial professional helping Ameri-cans living in Israel with their U.S brokerage accounts, I regularly receive calls from people who just received an inheritance and don't know what to do with it. The first three things you should do after receiving an inheritance are:
Take a step back
Many emotions surround an inheritance. People feel an intense dichotomy between the relief of having "extra" cash and the grief of mourn-ing. As such, don't make any decisions right away. Let your emotions settle down before doing anything. Remember that the deceased wanted you to receive the finds, so you needn't feel guilty about it.
Make decisions carefully
Frequently, people choose to donate to charity or to gift some of their inheritance money. Consider the best way to give it to others, and don't make rash decisions. And certainly don't let others (like kids) pressure you to give them the cash. If you sense any kind of manipulation, say you must first consult with your financial advisor. Receiving an inheritance changes your own assets, so evaluate your new situation objectively. Is your inher-itance of $100,000 really enough to buy an apartment for your children, pay off your mortgage, and splurge on a vacation? While a windfall may seem like a huge sum of money, its purchasing power is limited. Another important point to ponder: Do you want to spend the funds or invest them so that one day you can leave an inheritance of your own?
Plan your financial future
The flow of extra cash into your accounts can alter your asset allocation, so now is the time to create/update your financial plan. Use this opportunity to rebalance and make sure your investments are aligned with your goals. If you recently received an inheritance (or anticipate receiving one), let's talk about how you can best use the extra funds to meet your goals. Profile Investment Services, Ltd. has extensive experience in helping folks navigate this challenging time. Let our local presence and global expertise help you.