Studies have shown that when people unexpectedly come into money, they’ll treat it differently than the money they’ve earned. So how do you get the most from your Florida inheritance?
Forbes’ recent article entitled “5 Important Steps To Maximize An Inheritance” says that even the most financially astute consumers can get inundated with their newfound wealth. People can feel pressure to use the cash to purchase new vehicles, bigger homes, or even take their families on dream vacations. Others may feel that they can safely quit their jobs and live the life of luxury.
Many people regret jumping into major purchases after getting a Florida inheritance. Others will give away much of the money or even make bad investments that are completely wrong for their goals and financial needs. If you don’t get expert financial guidance to develop a plan for your Florida inheritance, or take the time to do it yourself, you may find yourself worse off than you were before you became wealthier via an inheritance.
Here are some financial planning tips for anyone who is receiving a Florida inheritance or another windfall.
Do Something Fun. Set aside an amount to splurge on something fun. However, figure out how much you want to spend and on what. Without that, you may find that one small splurge turns into many, and next thing, a big chunk of your Florida inheritance could be spent.
Taxes on Your Inheritance. It’s uncommon for someone to get a Florida inheritance big enough to trigger the federal estate tax. However, estate taxes will vary at the state level, so check with your Jupiter, Florida estate planning attorney. Depending on the type of assets you inherit and how they’re held, you may owe taxes on some of your newfound riches.
Quitting Your Job. This sounds tempting, but before you take this big step, make sure you’ve thought it through and that you have a plan to replace your income. It’s not hard to underestimate how much money you’ll actually need to provide a nice standard of living for the rest of your life.
Take Care of Yourself. When you come into money, you’ll hear from relatives you never knew you had. They’ll all be asking for money. Make sure your own finances are in order, before you commit to take care of others beyond your immediate family.
Consult Experts. A Florida inheritance can be stressful and overwhelming, so talk to an experienced Jupiter, Florida estate planning attorney. He can help with tax filing deadlines and provide strategies to protect that wealth.
Reference: Forbes (Feb. 26, 2020) “5 Important Steps To Maximize An Inheritance”