The Four Stages of Inheriting
We’ve all imagined what it would be like to inherit money from a long lost relative at some point.
You may even know exactly what you’d spend the money on when it hits your bank account, courtesy of your well-off, just not well-known relative. Unfortunately, when we actually inherit money, it doesn’t usually happen with the no strings attached scenario we’ve envisioned.
When we inherit money, it’s most likely because we’re a direct heir of the wealth that someone close to us has accumulated over their lifetime. Whether this is a spouse or partner, a parent, or another close relative, the loss of this person from our lives and the sudden cash windfall we receive can cause a wide range of emotions that are much different than we imagined in the long-lost relative idea.
Hitting Pause is Okay
Before you take any action to put your inheritance to good use — let’s pause. Remember to be kind to yourself during this season. You’ve lost someone you love. Even if your relationship was complicated, as many relationships with loved ones are, you’re still grieving. It’s okay that you have mixed feelings about any wealth you’ve inherited in the wake of their loss. It’s even okay to not make any decisions about that inheritance right away. You may be thinking about paying down your debt or paying for your child’s college. However, it important to hit pause. The money will still be there in a week or even a month or two. This also gives you some time to find a financial planner who can help you make decisions.
Additionally, there are going to be people that don’t have your best interests at heart. There will be people that want you to buy a product or give them money. Hit pause. This is not the time to feel pressured to do anything especially something that doesn’t positively impact you and your family.
You’re A Little Afraid
Receiving an inheritance, no matter how large or small, is intimidating. Feeling a little bit afraid because you’re unsure of the “best” thing to do with your money or property is completely normal. You may also be afraid about what your financial future looks like with the loss of your benefactor. If your spouse or partner has passed away, you are obviously worried about what your “new normal” will look like. If your parents, or another close relative, has passed away you will be concerned about what this means for your family including your siblings.
It’s also nerve wracking to suddenly have more money than you’re accustomed to. There are so many financial decisions to make, and you may not have any background knowledge on how to maximize your new money. Beyond fear, you may feel uneasy that you don’t know what your next steps should look like. Although it’s normal to feel this way, I want to put your mind at ease: nobody knows the best way to handle money that they don’t have yet. Talking to a financial planner who can help guide you through the steps can be invaluable during this time.
Dealing With Guilt and Obligation
Many people who have recently inherited a large sum of money are plagued with guilt and an overwhelming sense of obligation.
What did I do to deserve this money? How can I make sure I make the right financial decisions that honor my spouse? Or my parents?
These are very normal thoughts and feelings to have, but they often push people into analysis paralysis. Rather than focusing on what you can do to make a positive impact with your newfound wealth, you might find yourself freezing up and not making any progress at all for fear of making the “wrong” choice.
Your financial planner will work with you (as well as any estate attorneys and CPAs) with your best interests in mind. They are here to help guide you through all the moving parts so you can make financial decisions that reduce guilt and use your inheritance in a way that honors the loved one you’ve recently lost.