Managing an inheritance
- Before you make any major financial decisions, you may wish to talk over inheritance planning details with an attorney, a financial advisor and tax professional
- Identifying your financial goals can provide important cues to managing your new funds
- A financial advisor can help you decide what may be relevant to your situation
Receiving an inheritance often accompanies a highly emotional time. It may even create more financial stress than it relieves. You'll never regret taking a little time to decide how to use your inheritance wisely.
Understanding your inheritance
An inheritance can arrive in many forms. Before you make any major financial decisions, you may wish to talk over inheritance planning details with an attorney, a financial advisor and tax professional.
You'll want to find out:
- Asset type and value. What type of assets will you receive – a house, other real estate, a business, stocks and bonds, retirement plans, IRAs or life insurance? What is the estimated value?
- Timing of distribution(s). When will the assets be available? Will you receive your inheritance immediately or will it be distributed over time?
- Tax implications. What taxes might apply to these assets?
Think about your future goals
Identifying your financial goals can provide important cues to managing your new funds. If you received your inheritance from your spouse, partner or other close family member, you may want to consider how you might carry out a legacy or continue shared goals. Additional possibilities for your inheritance:
- Adding to your retirement savings
- Managing upcoming income and estate taxes
- Paying for a family member's or your own education
- Helping out loved ones
- Contributing to a favorite charity
- Setting up a trust or foundation
- Paying off debt
Preserve your inheritance wealth
- Update your will to accurately reflect your wishes.
- If your new wealth is significant, meet with your attorney right away.
- Consult a financial advisor to help you develop a strategy to help minimize estate taxes for your beneficiaries.
- If you don't have an estate plan, now may be a good time to create one.
Charitable giving or gifting
- Identify how you plan to share your inherited wealth with loved ones or donate to a charity.
- Document all gift transactions.
Get help managing an inheritance
When your life and financial situation changes, working with an Ameriprise financial advisor can help you make informed financial decisions about your inheritance and help you plan for your goals and dreams.