Purchases To Potentially Avoid After Inheriting a Lot of Money
If a loved one has informed you that you will inherit a lot of money from their estate, it may be smart to speak to a financial professional now. This can help you avoid many of the most common problems associated with inheriting money and losing that value quickly.
With a significant windfall come many opportunities, but you must exercise caution and think in advance about potential impacts. It can be tempting, for example, to buy a luxury vehicle, but these items depreciate quickly, and the maintenance costs may be significant.
Another common thought for someone inheriting a lot of money is to buy a home. But buying a house is a significant commitment, and something that should be driven by things other than the windfall of money that makes it possible.
You may, for example, instead choose to purchase a somewhat smaller dream house while diversifying the rest of your investments. Be wary of high-risk investments and luxury shopping as this can limit your ability to stretch the inheritance as far as possible.
If you recently inherited something from a loved one’s estate, this can serve as a powerful reminder of the importance of estate planning. Your ability to receive an asset may have been directly impacted by your loved one’s choice to do some planning in advance. If a family member sat down with an attorney to discuss their options and to create a clear plan, this can make things easier for everyone listed as a beneficiary in a will or trust.
But estate planning goes beyond just documenting your assets and your plans for them; it can also help you address important health and financial issues while you’re still alive. Meet with a Virginia Beach estate planning lawyer to determine what belongs in your plan.