7 things to do when you receive an inheritance

Receiving an inheritance can be a time of conflicting emotions. The money might open up exciting opportunities for you that were previously out of reach. But, at the same time, you may still be grieving and coming to terms with the loss. You may also feel like you have to make big financial decisions now, or you may want to avoid them altogether.

An inheritance can be life-changing, but you need to think about what you want to achieve with it and what the right decisions for you are. These seven steps can give you some direction and help you make a choice when the time is right for you.

1. Take a step back

Don’t be pressured into making decisions quickly. You may have far more options than you think and taking a step back gives you time to assess what your steps should be. A period of reflection can often be valuable. You should, however, make sure your inheritance is safe. If you receive the inheritance in cash, a deposit account can be a sensible option. The Financial Services Compensation Scheme protects cash deposits up to the value of £85,000, so if you receive more than this, you should consider splitting the inheritance across several banks or building societies.

2. Consider your financial challenges

Looking at your current financial situation can help you see where the inheritance can have the largest impact. If you’re at a point in your life where you still have debt, for example, paying these off can improve your financial security in the long term. Assessing where your income has been going can help you identify where inheritance can improve your day-to-day life in the short term.

3. Think about your life goals

When you receive an inheritance, it’s not uncommon to think about what your benefactor would have wanted you to do with it. However, it’s important that you consider your life goals too. This is where taking a step back can help. If you hadn’t expected to receive an inheritance, you may never have given serious thought to what you’d like to achieve if you received a lump sum. Taking some time to reassess life goals and aspirations can be useful.

4. Plan for the future

You may be tempted to make spending decisions that will improve your life now. And there’s nothing wrong with that. However, you should also consider the future. Could an inheritance mean you’re financially secure in retirement? Could it improve your lifestyle for the rest of your life? The financial decisions you make now could have a far-reaching impact. Short-term decisions may mean that achieving life goals are out of reach despite having the means to meet them.

5. Choose a financial planner

A financial plan can help balance your short, medium and long-term goals. Working with the right financial planner can help you create a blueprint for how you’ll use the inheritance to reach your aspirations. Ongoing advice gives you a regular chance to review your assets and plans to ensure you remain on track. Get in touch to talk to one of our experienced financial planners.

6. Lend a helping hand

When you found out about the inheritance, you may have been keen to lend a helping hand. Perhaps you hoped to provide children with a lump sum to get on the property ladder or donate to a charity that’s close to your heart? Once you have a long-term financial plan in place, you’re in a better position to understand how helping others would have an impact on you and your goals. Whether you want to give a lump sum or ongoing support, making this part of your wider plans can ensure it has the impact you want and won’t harm your own goals.

7. Put your affairs in order

Finally, you should take some time to set your own affairs in order. This should include writing a will and naming a power of attorney. Even if you already have both of these in place, it’s a good idea to review them. An inheritance may have changed the way you’d like your estate to be distributed, for example. It’s an opportunity to think about what you want to happen to your wealth in the long term.

If you’ve received an inheritance or are expecting to, we can help you address your financial concerns. Receiving an inheritance could be a one-off opportunity to change your life for the better. Our goal is to help tackle the financial concerns you may have and to help you reach your aspirations, so please contact us for advice.

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