Follow these seven steps to reap the benefits of your inheritance and avoid complications.
Learn What You can
Speak to your potential benefactor about the possible inheritance. You'll have clearer expectations of what might happen and get the chance to thank them before they pass.
Probate involves paying the estate's taxes and debts and contacting beneficiaries. It takes time. Therefore, don't expect your inheritance immediately, and certainly don't make plans or commitments based on your expectations.
Get a Financial Planner
Financial planners help beneficiaries make short-term choices and develop long-term strategies. A fee-only financial planner is a good option for people who don't typically invest, as they won't have a conflict of interest.
Take It Slow
Don't go on a spending spree as soon as you get the money. You'll almost certainly buy emotionally and end up with objects soon discarded.
Pay Your Debts
Inherited money is great for paying debts. Pay off high-interest debts first, then consider the most economical solutions for low-interest debt, such as a mortgage.
Invest What You Can
Work with a financial planner. Invest over long periods, as investing all at once increases the risk of buying at higher prices. Diversify your investments across low and high-risk assets.
You'll probably want to share your good news with loved ones. However, inheritances often generate resentment from non-beneficiaries, sometimes resulting in conflict. Tell as few people as possible.