In the fog of grief, it can be difficult to consider the trickier aspects of handling money given by a loved one. We’ve compiled a list of five aspects of inheritance that may need a little illuminating during this sensitive time.
Lump Sums vs. Installments with Inheritance
Some inheritances are paid all at once, while others come in the form of timed payments. Often this is detailed in the will. How the money is paid to you will definitely affect how it can and should be spent.
Have Tough Conversations Regarding Managing the Inheritance
While it may feel indelicate to discuss an inheritance prior to a loved one’s death, talking about how the money will be distributed among family members can avoid conflict or hurt feelings later. When loved ones pass without having these discussions, make sure to have frank and clear-cut discussions about what each member will receive in terms of assets.
Check the Conditions in the Will or Trust & Estate
While you may be looking forward to using an inheritance to pay off a mortgage, some inheritances can have legal requirements for the use of such monies. Keep in mind that some family members may be required to use the money for school or even get married, for example, to receive the full amount allotted to them.
Taxes on inheritances vary widely from state to state and can even differ depending on the relationship between the persons giving and receiving an inheritance. It’s wise to consult an estate lawyer to make sure that all tax liabilities are properly attended to.
Work with an Certified Financial Planner to Ensure Financial Gain
Some studies indicate that those who inherit large amounts of money spend it all within five to ten years. In order to make the most of your inheritance, consult a financial planner to help you help your newfound
wealth work to help you achieve your life’s goals.