4 Top Tips for Baby Boomers to Properly Handle an Inheritance

 In Retirement


Money is a tricky animal. You can’t live without it, but there are times when you wish you didn’t have to live with it! An inheritance can bring a great deal of frustration to the table if you are not adequately prepared for the windfall about to come your way.

I know what you’re thinking: Just show me the money baby, and I’ll show you how to take care of it! That might be fine in principle, but there is more to it than that, thanks to the complications of modern society.

Keep reading to discover four of the top tips we have to offer baby boomers looking to handle an inheritance properly.

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Assemble a Supportive Team

Once the initial shock of discovering that you are about to receive an inheritance wears off, you might find the entire concept to be a bit scary. Here you are having worked your entire life to this point to take care of your children and wife, and in one moment all of your financial worries are seemingly over.

Not so fast! You have a lot of years ahead of you, so it is now time to manage this money wisely so that it lasts for future generations to come. That is why you need to take a moment to assemble your support team. This means that you should have a trusted financial advisor who is experienced in wealth management, along with a lawyer that is ready to deal with high net worth clients.

Take some time to get trusted advice so that you know how best to move forward once the final papers are drawn up.

Develop a Knowledge of Your Inheritance

Not all inheritances are created equal. There are various levels of tax implications to take into account depending on what type of inheritance you are about to receive. You need to know if you are about to receive a trust, IRA, cash, or any of a number of other types of securities and investments.

Some people inherit property, precious metals, and even artwork. Each comes with its own special considerations in order to safeguard the wealth and put it to work for you.

Consider a trust as an example. If this is the type of inheritance you are about to receive, the assets will almost always be managed directly by a trustee. You will not have much to say on the matter. A trustee will manage the assets and distribute them to you according to terms of the trust.

Other types of inheritance might be in the form of IRAs that have certain tax-advantaged shelters that you will want to take advantage of, if applicable to your situation.

In short, you need to develop some deep knowledge of the type of inheritance you are about to receive so that you can make informed and wise decisions. You may need to withdraw all of the cash out at one time, over the course of your lifetime, of within a certain number of years after the individual who left you the money has died. Find out which applies to you and act accordingly.

happy retirement

Take a Timeout

Getting all of this money all at once can put your head in quite a tailspin. You might have all of these plans that come into action all at once, or you might have no clue about how to even begin.

It is precisely because of these various emotions that you will feel that you need to take a financial timeout. You need to avoid the temptation to begin spending the inheritance right away. Remember that you are a successful individual who is already making his way in life just fine at present.

While an inheritance will certainly bring more options to the table, it does not need to change or alter your financial perspective on life. Take some time to ponder your future. How do you really envision using your inheritance?

Perhaps you have grandchildren on the way, and you want to create a college fund for them. You may want to enhance your own personal wealth and position yourself to leave an inheritance of your own when the time comes.

All of the decisions should not be made quickly, so feel free to take your own emotional personal retreat and make wise decisions based on sound reasoning.

Investments Are Key

No matter how you choose to use your inheritance, investments will most likely form a foundation for the new wealth coming your way. No matter if you handle your own investments, or you use a trusted advisor, you want to get yourself in a sound financial position as quickly as possible.

There are numerous options to consider on this front, so take your time to examine each one. Many people will diversity a large inheritance in order to position themselves in various stock, mutual funds, bonds, and precious metals markets.You might find that you have property that you need to decide what to do with. You can liquidate, rent, or make use of them on your own.

Each solution depends on your own unique situation and stature in life. These are not easy decisions. Identify your risk level and invest wisely. This is how you will preserve the inheritance for future generations.

These are four of the best tips we can offer you to keep your head above water after receiving an inheritance. Remember that somebody has spent his or her life earning the wealth that you are about to receive. They now trust you to manage it in their absence, enjoy it within reason, and perhaps increase it a few measures over.

Wouldn’t it be great to leave the same type of inheritance to your children and loved ones at some point in the future? The same joy you experienced can be theirs as well. You just need to follow this advice and steady the course.
early retirement

Sergey Sanko
Sergey had started an IncomeClub after years of being an investment advisor for high affluent investors and managing fixed income securities. He is the lead investment advisor representative and holds a Series 65 license. Sergey earned his Executive MBA degree from Antwerp Management School.
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