Managing an inheritance


If you’re suddenly faced with managing an inheritance it can be incredibly daunting.

In this article we look at the five things that can help you cope with and navigate your way through this time.

Inheritance is a word that can cause so much discussion, as well as silence. And that’s totally understandable, considering the many reasons why you can be suddenly forced into taking on the role of managing an inheritance.

When someone is faced with suddenly managing an inheritance, often there’s a fear of getting it wrong; of doing the right thing. There’s the emotional feelings that come to the surface. And the financial burden that can come with it.

Our first word of advice is you’re not alone. And we can help you look towards the inheritance with a sense of calm, peace and gratitude; rather than apprehension.

As a start, here’s five key points to consider.

Take your time

Exhale, there’s no rush.

There’s so much to consider and deal with after the loss of a family member. Give yourself the freedom and space to grieve and reflect.

People often think they have to make quick decisions. You don’t. In fact it’s quite common for people to start addressing the inheritance 6 or 12 months after saying goodbye.

Acknowledging and appreciating the things that come along with bereavement like the emotional connections with family and friends is so important. Depending on the circumstance, coming into money suddenly from an inheritance can bring up feelings of guilt, embarrassment, relief, excitement. That’s a wave of emotions to work through.

Take a breath, and address the inheritance in your own time.

See the ATO’s checklist of what to consider managing a deceased estate.

Define what’s important

Once you’re ready, start the conversation around goals or what you’d like to do with the inheritance. Big or small.

For some it’s using the money to make an impact through giving. Others may wish to continue it as a legacy through the family by passing it onto their children. Then there’s all the practical applications like paying down debt or the mortgage for financial security.

There’s no right or wrong answer for how you choose to use the inheritance.

The key is taking your time to define what you want, and what’s important to you. If you’re comfortable and able to do this yourself that’s perfectly fine. Or you can turn to an advisor to help talk you through your options.

Again, there’s no need to rush.

Consider your options

One of the advantages of talking to a trusted specialist like a financial advisor is they can explore all of the options open to you and how best to structure your finances to meet your inheritance goals.

This includes important aspects like:

  • Tax minimisation
  • Debt reduction
  • Investment advice
  • Contributions to superannuation
  • Cashflow implications
  • Adjusting or adopting personal risk insurances.

Like anything in life, when you’re so close to something it’s hard to stay objective, so a good advisor can help extrapolate your goals and build a financial strategy that ensures you can maximise the benefits of the inheritance.

Have the money conversation

It’s far easier to manage an inheritance (and take your time when you need to) if you’ve already been open with the family before that day comes.

Talking about money is hard enough for many Australians, especially our older generation. So talking about money and mortality is not the easiest of subjects to broach, but you owe it to yourself and your family to have these conversations now, particularly before an incident happens. You can then make clear and considered decisions and reduce much of the financial and emotional burden that can come with an inheritance.

Unfortunately we have seen many people come to us who have shied away from talking about inheritance options and estate planning, and have then faced disputes and uncertainty around entitlements and obligations. It’s not worth it ending up in the courts because you found it too difficult to have these difficult conversations.

Please remember, it’s OK to talk about money. In fact it’s essential to living a Good Life.

Think about your own estate

While we’re on the subject of inheritance, are your own affairs in order? You’ll be surprised by the number of people who either don’t have a will, have one that isn’t valid and enforceable, or is no longer relevant to their current circumstances.

Don’t be one of these people to leave your legacy literally at the will of the courts.

At Tribeca, we’re here to help you with your estate planning and inheritance advice, as well as connect you with a range of legal and financial specialists to ensure you’re in the best position to live your Good Life and provide for those most dearest to you.

If you would like to learn more about Tribeca and how we can support you, feel free to call the office on 1300 388 285 or you can also arrange a call here with one of our expert advisors where we can discuss your financial and life goals in more detail.

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