By Matthew Gaude & Shawn McGuire
Receiving an inheritance of money is an appreciated gift. But without proper planning and guidance, you may wind up wondering where it all went. Education is key to making the most out of your inheritance. At Live Oak Wealth Management, our mission is to help people like you build wealth through two key principles: wealth accumulation and wealth preservation.
Sound financial decisions related to an inheritance falls under the wealth preservation umbrella. This means not blowing it on material items with depreciating values. But, instead, we’ll help you make your money work in your favor so it can improve your overall quality of life for years to come.
How to move forward is greatly dependent on two factors—the amount you received and your current financial position.
Just How Much Did You Inherit?
Have you ever wondered just how much most people inherit? The IRS conducted an interesting study based on inheritance value and level of education. Among families that have received an inheritance, the typical value of all inheritances received by families with a parent who has a college degree is $92,700, compared with $76,200 for families without a parent who has a college degree. (1)
Understanding the true value of your inheritance is important. Taxes likely come to mind. Most simple estates do not require an estate tax return, (2) but tax laws differ at the state level, so be sure to do your homework.
Don’t Make Quick Decisions
Regardless of what you inherit, deciding what to do with your newfound wealth is no easy feat.
While we want you to live your life to the fullest, it’s unwise to blow the money within the first couple of years—which is unfortunately what many people do. Purposeful spending and investing will ultimately lead to the greatest long-term outcome.
Avoid future resentment by educating yourself and taking time to think through your options. A great first step is to seek advice from knowledgeable professionals.
Seek Good Counsel
Financial advisors and tax professionals are great resources for money questions. They can provide the high-level overview you need to gain assurance you’re not missing any details.
With this clarity, a financial advisor can also help you execute a plan. The size of your inheritance may determine just how far you can make it down this list, but consider the following:
- Eliminate debt: Lowering or eliminating monthly payments can immediately improve your quality of life; in turn, you can focus on saving and reaching future goals. Eliminating debt can accelerate the process of buying a new vehicle or increasing a down payment on a future home.
- Invest with care: It’s always a good time to save for your future. Your financial advisor can assess your risk tolerance, provide investment options, execute transactions, and monitor performance. Depending on your age, even small investments today can turn into a large nest egg for your retirement.
- Splurge responsibly: There’s certainly no harm in treating yourself. After all, you likely deserve it, and your loved ones may even request you do something nice for yourself. Set aside a small portion for something fun while dedicating the remainder to debt reduction and investing.
- Consider future generations: Remember the feeling when you first became aware of your inheritance? You were likely incredibly thankful. If you have the ability, now can be a great time to set aside a portion for the next generation. From education account contributions to stock investments—your loved ones are sure to be thankful.
Take The First Step
Wherever you are in the process of receiving an inheritance, the professionals at Live Oak Wealth Management are always available to provide sound guidance. If you’re in need of investment assistance or advice, call our office at 770-552-5968 or email email@example.com. Or, if you prefer, you can simply click here to schedule an appointment online.
Matthew Gaude is an *investment advisor representative and the co-founder of Live Oak Wealth Management, a financial services firm in Roswell, Georgia. He serves the planning and investment needs of corporate employees, those approaching or in retirement, and 401(k) plan sponsors. Working first as a commodity broker and then as a Business Development Manager for a national broker-dealer in previous jobs, he has the insight and experience to help clients understand the complexities of the market and implement strategies to minimize risk. To learn more about Matthew, connect with him on LinkedIn or visit www.liveoakwm.com.
Shawn McGuire is a financial advisor and the co-founder of Live Oak Wealth Management, a financial services firm in Roswell, Georgia. He serves the planning and investment needs of corporate employees, those approaching or in retirement, and 401(k) plan sponsors. He has worked in financial services since 2002 in positions ranging from financial advisor to stock broker and portfolio manager. As a CERTIFIED FINANCIAL PLANNER™ professional, he is trained to help clients with virtually all their financial needs. To learn more about Shawn, connect with him on LinkedIn or visit www.liveoakwm.com.
Securities offered through American Portfolios Financial Services, Inc., member FINRA/SIPC. Investment advisory services offered through *American Portfolio Advisors, Inc., a SEC Registered Investment Advisor. Live Oak Wealth Management, LLC is independently owned and not affiliated with APFS or APA.
Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc. (APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk, and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Seek tax advice from a tax professional. Neither APFS nor its Representatives provide tax, legal or accounting advice.