Partly to mostly cloudy. Low 67F. Winds SSE at 5 to 10 mph..
Partly to mostly cloudy. Low 67F. Winds SSE at 5 to 10 mph.
Updated: September 3, 2022 @ 7:07 pm
Businessmen women counting money on a stack of 100 US dollars banknotes lots of money
Businessmen women counting money on a stack of 100 US dollars banknotes lots of money
When the Mega Millions jackpot started climbing recently, it was easy to find people dreaming about what they would do if they won $1.337 billion. Plans ranged from paying off debt to buying a new home or donating to important causes.
While you may never win a record jackpot, you could inherit a significant amount of money (or an asset or investment) during your lifetime. Before dreaming of a new sports car or the lifestyles of the rich and famous, consider these strategies to help manage your windfall:
1. Share your news with as few people as possible.
Speaking openly about a large inflow of money may bring unwanted attention from salespeople, scammers, relatives, and friends. Within families, those who didn’t inherit money may contest the inheritance of those who did. If you do share your news with a trusted loved one, ask them to keep it to themselves.
2. Don’t rush to spend the money.
Many people make emotional decisions after coming into a large sum. If you inherit money from a loved one who passed away, you may also be grieving. Wait to make any spending decisions until you’ve had an opportunity to process the situation. Depending on your benefactor’s estate plan, you may inherit funds, but may not receive them right away. Don’t be tempted to spend what you don’t have.
3. Ask yourself how having the money fits in with your financial and life goals.
If your “ideal future” includes starting a business, retiring early, or making a significant gift to a favorite charity, spend some time prioritizing your goals to understand how you might balance your long-term and short-term desires.
4. Consider the tax implications.
You may need to make some tax-related decisions if you inherit a large amount of money. Your tax bracket, who you inherited the money from, and the amount are among the many factors that could affect how much and when you’ll owe taxes.
If you receive a large cash inheritance, park it somewhere safe – like a federally insured bank account – and seek help from a fiduciary financial professional right away. Doing so can help give you much-needed time to process your emotions, consider your goals, and create a plan to manage your inheritance wisely.
John Frisch, CPA/PFS, CFP®, AIF®, PPCTM, is a financial advisor and the managing director of Savant Wealth Management’s Manassas, VA office.
Savant Wealth Management is a Registered Investment Adviser. You should not assume that any discussion or information provided serves as the receipt of, or as a substitute for, personalized investment advice from Savant. Please consult your investment and financial professional(s) regarding your unique situation.
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