Expecting An Inheritance? 5 Planning Steps Before You Get The Check

Do you expect to receive a large inheritance in the near future? One of the best things you can do right now is to spend some time planning for it. How can you do this? Here are a few of the most important steps to take. 

1. Gather Your Financial Information

Before you can decide the best use of inherited funds, you first need to understand your own financial situation. As such, gather together all your debts, obligations, and assets. This includes current and old retirement accounts or pensions, bank and brokerage accounts, and statements of current debt balances. Research the value of your hard assets (such as a house and vehicles). Likewise, print out statements, beneficiary designations, and any estate planning documents you currently have. 

2. Make a List of Priorities

Think about all the uses you might make of this money. This includes both practical items — like paying off debt — and fanciful ones, like traveling the world. Then, write these down. This exercise will help you to decide what are your priorities. Prioritize your list, then work with your planner to plan practical ways you can achieve these and realistic time frames. 

3. Meet With a Financial Planner

Spend this time researching and meeting with financial planners to find the one you feel most comfortable with. Depending on how large the inheritance is, you may need a financial planner only or a more targeted wealth management planning service.

Your planner should communicate well, understand and be able to apply your goals, have extensive knowledge of investments and tax strategies, and make use of modern planning tools. 

4. Begin Estate Planning

Once an inheritance becomes yours, it must become part of your own estate planning. Failure to draft a will, put in place end-of-life documents, form tax-advantaged entities, and name beneficiaries could result in confusion and delays if you pass away and may even see your wishes not followed by the probate courts. Begin now by discussing estate planning needs with your financial planner. 

5. Decide How to Communicate

Before you receive any assets, make a communication plan. How do you want to share this news and who do you share it with? Will the inheritance be private or is the will part of public probate records? How will you handle requests for loans, investments, and donations? Your financial planner can help you craft a plan before you encounter any of these situations so you won't make any rash decisions. 

Ready to get started preparing for your inheritance? No matter whether you have a short time or a long time to plan, now is the best time to begin. Meet with a wealth management planner or financial planner in your area to learn more. A wealth management planning service can provide more information.