Making plans for how your wealth or possessions will be divided once you die is not a new concept. A lot of people, regardless of their level of wealth have a written document, or will, stating their wishes for their estate. Anyone without a will cannot guarantee their wishes will be carried out upon their death, and even worse their loved ones may not see the treasures they hold so dear or represent their relationship with the deceased. What is almost equally important is inheritance planning for the beneficiaries.
Regardless of the monetary amount of the inheritance it is vital that plans are made for the money. Even the most basic plans will help avoid the possible risk of losing such a valuable and often much unexpected gift.
The best and most important advice to any inheritance beneficiary is to get professional advice immediately, even before you receive your inheritance if possible. The lawyer or accountant overseeing the estate may be able to offer advice or possibly point you in the right direction. Finding a lawyer or accountant you trust and feel comfortable working with is vitally important. Avoid talking about your inheritance with too many people. While it may be known to people you have received some form of inheritance it is not necessary to tell everyone the details or amounts, this can only put you at unnecessary risk.
There may be certain dictations in the will that require you to do certain things with your inheritance. Perhaps certain portions of the inheritance are to be used for education, home loans or business opportunities etc. A lawyer or account can help you to store or invest the money until such time as it is required. Investment is always a good option; this will allow you to generate interest while the money is not being used.
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Other forms of inheritance planning could involve looking into long term investments, starting up a new business, clearing existing debts, clearing home loans or trading on the share market. Again, a good accountant or lawyer should be consulted to ensure you are making financially sensible decisions with your inheritance.
This is not to say that no inheritance is ever spent on luxury items or holidays. In the right situation this may be appropriate. However it would not be sensible to spend your entire inheritance on these types of purchases. It may give you immediate gratification but in the long run it’s more likely you’ll wish you’d invested the money to provide some form or return or ongoing income.
If after professional advice you are still unsure how to allocate your inheritance, wait until you are. Don’t make any hurried decisions and do your best to think about what the deceased would want you to do with it. How can it genuinely better your life and that of those you love? Inheritance planning can be difficult but with the right professional financial advice, patience and a clear mind trust that you will make the right decisions. This is a wonderful gift that not everyone has the benefit of receiving.