How to handle a large inheritance

Many in Texas who work to create an estate plan understandably do so with their heirs in mind. Typically hoping to make a difference in the lives of their beneficiaries, estate planners create documents that often arrange for the transfer of large sums of money to beneficiaries. But these large bequests, welcome as they may be, can create financial issues that deserve careful consideration.

Reportedly, more than $41 trillion in assets will be transferred to heirs in America over the next 50 years. These inheritances may truly be life-changing for some. For others who have already built up personal wealth, the transfers may result in larger emergency funds or money to apply toward college tuition payments or other expenses.

Experts suggest that beneficiaries who inherit large sums should first take time to consider what to do with the money. Set it aside in a money market fund for a year or so while you decide what to do with it. Tax consequences and investment strategies are both important things to consider after receiving a big inheritance.

When an individual finds that he or she has inherited a large amount of money, it is important to understand the many ways this money can be handled. These options can include investments and paying off of bills, as well as funds for vacations and other opportunities. Careful planning can help beneficiaries make plans for long-term benefits that will allow them to enjoy the inheritance for many years to come.

Source: USA Today, “How to get the most from an unexpected inheritance,” Sandra Block, April 9, 2012

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