Handling Your Inheritance Responsibly

Handling Your Inheritance Responsibly

You hear the horror stories – someone inherits a large sum of money and spends it quickly and recklessly. If you recently inherited money, how can you prevent this from happening to you? Use these tips to handle your inheritance responsibly.

Do Not Rush

While you may feel the inheritance burning a hole in your pocket, take time before making any major financial decisions. Placing your inheritance in an interest-bearing savings account while you develop a long-term strategy is wiser than making impulsive money moves in the short-term.

Prioritize Your Financial Goals

Take some time to review your financial goals. Perhaps you have some outstanding credit card debt, are approaching retirement or want to invest in a friend’s company. An inheritance can be an excellent way to achieve these financial goals. Consult a financial advisor to help chart an effective path.

Speak with a Trusted Financial Advisor

After receiving an inheritance, you may find people come out of the woodwork, each with their own piece of advice or idea for how you should spend or invest your money. A financial advisor can help you outline long-term goals and craft a solid financial plan for your inheritance. Financial advisors can also help you navigate tax implications. A trusted financial advisor can provide insights to maximize your gains while minimizing taxes.

Allow Yourself a Little Fun

Once you meet with a financial advisor, you should have a clear financial plan for your inheritance. Then, it is ok to splurge a little – just make sure you include it in your financial plan. The budget you should leave for fun may vary, but consider reserving 10% of your inheritance or $10,000 – whichever is the smaller sum – for splurging. By allowing yourself a little bit of fun, you can enjoy your inheritance without letting the spending get out of control.
For assistance creating a financial plan, contact a Fifth Third Bank financial advisor today.

Fifth Third Bank does not provide tax or legal advice. Please consult your tax adviser or attorney before making any decisions or taking any action based on this information. This information is provided for educational purposes only and does not constitute the rendering of tax or legal advice. Fifth Third Bancorp provides access to investments and investment services through various subsidiaries, including Fifth Third Securities. Fifth Third Securities is the trade name used by Fifth Third Securities, Inc., member FINRA/SIPC, a registered broker-dealer and a registered investment advisor registered with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. Securities and investments offered through Fifth Third Securities, Inc. and insurance products: Are Not FDIC Insured | Offer No Bank Guarantee | May Lose Value Are Not Insured By Any Federal Government Agency | Are Not A Deposit Insurance products made available through Fifth Third Insurance Agency, Inc. © 2018 Fifth Third Bank Excerpt from Fifth Third Bank LegacyLink.