Inheritances are a complicated thing. Not only are there often strings attached in the eyes of the government, unexpected taxes, and complicated bequeathments, but there are also potential conflicts within families. And not to mention the fact that the potential windfall was the result of a relative's death. Inheritances are very complicated.
But, did you know, Millennials are predicted to inherit $30 trillion in wealth.1 That’s an exorbitant amount of money that the baby boomer generation will leave behind. And although television and movies may make it seem like a payday, inheriting money also means the potential to inherit the families financial problems.
So how can you prepare for inheritance? Forbes suggests that the first step - as morbid as it sounds - is to speak up before it’s too late. “No matter how smart or experienced you are, being suddenly forced into a position of leadership over an unfamiliar enterprise and almost always be disastrous, particularly when you are also simultaneously grieving over the loss of a loved one. It is imperative to be prepared for what’s coming and not speaking with your parents about your inheritance is setting you up for failure.2”
And if the time to talk to your family has passed, think about discussing your inheritance with a financial professional as soon as possible. It’s important to remember that the person bequeathing the inheritance would want you to use it towards your financial goals, and not as a memorial to them. Your emotions can influence you to make decisions that you would not normally make. Be careful with granting requests for money from family, friends and charities until you have a plan in place. “Take stock of your current financial situation and needs. It can be as simple as making a list on one sheet of paper. Then, take some time to think about all the possible uses for your new wealth. A financial planner can help you with this step and also provide independent, objective advice.3”