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So, you’ve acquired a large sum of money. Now what?

Christine Hause Oct 13, 2023
A middle aged woman sits at her table browsing the wireless internet on her tablet


If you are the recipient of a large sum of money through inheritance or settlement, you might be wondering what to do with it. How can you make the most of this opportunity and avoid the pitfalls that often come with sudden wealth?

Receiving a financial windfall can be both a gift and a burden. A gift because it can help you achieve your goals and dreams, and a burden because it can bring stress and complexity. Here are some tips to help you manage your money wisely and create a lasting legacy.

Take a Pause

The first thing you should do when you receive a generous sum of money is to take a pause. Do not rush into any decisions or make any major changes right away. Give yourself some time to process your emotions, grieve if you lost a loved one, and adjust to your new situation.

It is smart to place your money in a safe place for a while, such as a federally insured bank. This will protect your money from loss, theft, or fraud, and give you some breathing room to plan your next steps. Be aware that titling it in your own name or in joint name with a spouse can each bring certain risks. Learn about the account options we offer and review them with a wealth strategist for maximum protection.


Build a Dream Team

The next thing you should do is to build a team of professionals who can help you navigate the intricacies of managing your money. Depending on the type and amount of money you received, you might need to consult with some or all of the following experts:

  • An investment & estate planning professional who can help you create an investment strategy that aligns with your goals, risk tolerance, and time horizon, and guide you on how to diversify your portfolio and optimize your returns. Meet our team today! A wealth strategist will help you by introducing you to other key players you should have on your team. They may include a:
    • A certified public accountant (CPA) or tax advisor who can help you understand the tax implications of your newly acquired money and advise you on how to minimize your tax liability.
    • An estate planning attorney who can help you update or create your will, trust, power of attorney, health care directive, and other documents that will ensure your wishes are honored and your assets are distributed according to your plan. Once set up, we offer complimentary document reviews.
    • A tax attorney who can help you deal with any legal issues that might arise from your windfall, such as lawsuits, claims, or disputes.
    • A real estate agent who can help you buy or sell property, negotiate contracts, and handle the closing process.
    • An insurance agent who can help you review your insurance needs and coverage and suggest any changes or additions that might be appropriate for your situation.

These professionals will educate you on your options and help you make informed decisions that are right for you and your family. The wealth strategist will help you prioritize your next steps and analyze the various choices your will have to make.


Set Your Goals

The third thing you should do is to set your goals for your money. What do you want to achieve? How do you want to use it to improve your life and the lives of others? What are your short-term and long-term objectives?

Some common goals include:

  • Paying off debt
  • Saving for retirement
  • Buying a home
  • Funding education
  • Starting a business
  • Traveling the world
  • Supporting a cause
  • Leaving an inheritance

Whatever your goals are, make sure they are S.M.A.R.T.: Specific, Measurable, Achievable, Relevant, and Time-bound. This will help you prioritize them, track your progress, and stay motivated.


Make a Budget

The fourth thing you should do is make a budget for your money. A budget is a plan that shows how much money you have coming in and going out each month. It helps you control your spending, save for your goals, and avoid overspending or running out of money.

To make a budget, visit the financial resources on our website. Remember to include all expenses such as fixed expenses (mortgage, rent, utilities, insurance, etc.) and variable expenses (food, clothing, entertainment, etc.).

Month-to-month, it is important to remember that a budget is not set in stone; it is a flexible tool that you can adjust as your situation changes. You should review it regularly and make any necessary changes to keep it realistic and effective.


Give Some Away

The fifth thing you should do is consider giving some of your money away. Giving is not only good for the recipients, but also for you. It can make you happier, healthier, and more fulfilled. It can also reduce your tax burden, as charitable donations are generally tax-deductible. A wealth strategist will assist you in your charitable giving based on your estate tax liability, charitable intent, and income tax situation. 

There are many ways to give your money away, such as:

  • Donating to a charity or nonprofit organization that supports a cause you care about.
  • Creating a scholarship or grant fund for students or researchers who need financial assistance.
  • Establishing a foundation or trust that will fund projects or programs that align with your values and vision.
  • Giving to your family or friends who need help or support subject to annual giving amounts or lifetime giving maximums.
  • Leaving a bequest or legacy gift in your will or trust that will benefit future generations; a wealth strategist will help you craft an estate plan using best practices.

When giving your money away, make sure to do your research and due diligence. Be sure to choose reputable and effective organizations that have a clear mission, vision, and impact.

Receiving a considerable sum of money through inheritance or settlement can be a life-changing event. But it can also be a challenging one. By following these tips, you can manage your money wisely and create a lasting legacy for yourself and others. Our trusted fiduciary team can play an integral part in your planning and it all starts with a complimentary meeting with our wealth strategist!

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