How Good Will You Be at Inheriting Money?

By Published On: October 6, 2021Categories: Estate Planning3.5 min read
An illustration of a son inheriting money from his father.

A Must-Read for Xennials Coming into Money

As a member of the Xennial microgeneration, my friends and I are now well into our 40s More and more, I find conversations revolving around how our parents’ aging has seemed to accelerate in recent years.  Sadly, I’ve also watched several close friends lose parents in recent years.

Coping with the loss of a parent is a painful adult experience. Between legal processes and funeral plans, you must also explain the situation to your own children and navigate financial arrangements.

During this emotional time, having an inheritance management plan already in place to honor your parents’ legacy can ease some of the stress. That’s why I asked our team of wealth strategists to share tips on how to prepare for the financial mechanics of losing a parent, being prepared in advanced allows more time to start the grieving process with family.  Following is some helpful advice they shared.

Use Your Funds Wisely

A sudden influx of money can cause mixed emotions. Especially when you’re still dealing with the emotional aspects of your loss, inheriting your parent’s life work is a big responsibility. As an adult, receiving this money also creates choices that you may not have had before.

For some, it’s the extra funds needed to move forward with a new home or vacation property purchase. For others, it’s the opportunity to give retirement savings a jolt. At times, an inheritance also lets you send your kids to private schools you didn’t think you would be able to afford.

Whatever the case may be, it’s normal to feel grateful and overwhelmed at the same time. Being mindful of how and when you spend your inheritance money is key to honoring the memory of your loved one. With discipline and patience, you can use this inheritance to find financial happiness.

Plan For Taxes

Things are rarely free, even if they seem to be. And like other income, inheritances can sometimes be subject to taxes. Depending on where you live and when you take your distribution, you could find yourself owing Uncle Sam more than you expected.

Wondering how much you should plan for? To get a clear picture of your financial future and avoid costly surprises, it’s best to consult with a tax expert (we recommend an estate tax attorney or CPA who specializes in estate planning). With their help, you can sort out what you might owe out of your inheritance and get a clear picture of your financial situation

Don’t Go It Alone

Many of us have a natural tendency to handle things ourselves. Savvy as we might be with our money, it’s best not to make our decisions in a vacuum. This is especially true during emotional times in our lives.

With the help of professionals, you can create a sound strategy and make smart choices to build the future you’ve envisioned. With the help of a financial planner, you can:

  • Put a strategy in place to preserve the money that remains after taxes and expenses
  • Navigate financial decisions that could help you maintain family relationships
  • Make investments that seek to maximize the value of your gift

Let It Grow

Don’t keep big sums of money on hand. Keep your inheritance in a safe place. One that will help the money grow and allow you to be a good steward of your patrimony.

Setting up the right type of investment accounts for your personal situation can unlock your financial well-being. And working with an advisor can open doors to all the information you need to understand the options that are best for you.

The next decade is likely to show huge increases in Xennial inheritances. At CornerCap, our wealth strategists understand that coming into a sizable amount of money is a life-changing moment. Whether the impact is positive or negative is mostly the result of the choices you make.

With the help of our team, you can use this money to build a lasting and solid financial foundation. Reach out today to tap into the expertise that’ll help you take charge of your money and secure a thriving financial future for you and your loved ones.

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