Navigating a Financial Inheritance With Wisdom & Courage
Integrating inherited wealth into your life, livelihood, and legacy.
The death of a loved one brings many emotions that need space to be felt and sorted through with care and courage. Yet, life continues even as the grief lingers. At some point, the financial affairs of the person you loved must be addressed, and you may find yourself receiving an inheritance while still processing the loss.
Receiving an inheritance can bring emotions of its own as you consider what you have received, what it represents, and what you will do with it. An account transfers, a check arrives, or a house is now in your name.
Are you ready to weave your loved one’s legacy into your life and livelihood?
Come to Terms With Your Financial Story
Before deciding what to do with an inheritance, understand where you are today and the decisions that led to your current financial situation.
When you look at your cash flow, savings, debt, investments, taxes, insurance, retirement, and other financial commitments, what degree of financial stability have you achieved? Consider where you are in your career and adult years. Reflect on the choices within and outside of your control that have influenced your current financial circumstances.
What has worked well? Where have you struggled? What are you trying to accomplish now?
An inheritance changes the resources available to you. It does not erase the financial life you had before receiving it. If you haven’t wrestled with your own beliefs, habits, and behaviors around money, the inheritance may be long gone before you’ve had a chance to determine how it could strengthen your financial life.
More resources do not automatically lead to better financial decisions. Understanding your own financial story can help you make wiser ones.
Understand the financial inheritance story
As you reflect on your own financial story, consider how your loved one earned, built, and managed the wealth now being passed on to you.
Was it built through a career, business ownership, real estate, disciplined saving and investing, or assets passed down from an earlier generation? What sacrifices and decisions made the wealth transfer possible? What did your loved one value? What did they hope their wealth would accomplish?
The inheritance may represent decades of work, sacrifice, saving, investing, property ownership, or business building. It may also arrive alongside grief, family expectations, unfinished conversations, complicated relationships, and responsibilities you did not anticipate.
Consider your role in the story.
You may feel gratitude, pressure to make the “right” decisions, guilt about benefiting from a loss, or concern about honoring family expectations. You may also question whether you want to preserve certain assets, traditions, or financial choices.
Receiving a legacy does not require you to live someone else’s financial life. You can honor what was passed to you while deciding how it fits your own values, needs, and future.
Ask yourself: How will I enhance the legacy I have received during the remainder of my lifetime and beyond?
Strengthen Your Life and Legacy
After being honest with yourself about your financial journey and your role in your loved one’s financial story, you can begin to bring the inheritance into your own financial life. What can this inheritance make possible that your existing resources could not?
Consider your Real Wealth as you answer that question. Align your mission, mind, and money by connecting what matters to you, how you think and feel about the wealth you received, and how these additional resources can strengthen your life and legacy.
Before absorbing inherited assets into your everyday living, return to your financial circumstances. What goals were you pursuing before receiving the inheritance?
There will be plenty of financial advice about what to do with inherited money: pay down debt, invest, save for retirement, buy a home, or establish an emergency fund. You may also have people who expect you to share it, or institutions with claims against it because of outstanding obligations.
Give yourself time to understand what you inherited, how the assets are titled, what taxes or expenses may accompany them, and how they fit into your existing financial life.
Cash is different from an inherited IRA. A brokerage account is different from a house. A family business is different from life insurance proceeds. Even within the same inheritance, different assets may require different decisions and timelines.
Work with your family and your team of financial professionals, including your financial planner, tax professional, insurance professional, and estate planning attorney, to determine how these additional resources can strengthen your financial situation.
Some of the inheritance may support your life today. Some may strengthen your financial security for tomorrow. Some may create opportunities for people you love. And some may eventually become part of the legacy you leave behind.
Navigating Your financial inheritance for Transfer
Once wealth reaches your pockets, you become a part of its transfer. You may be the beneficiary today and the wealth creator, steward, or giver tomorrow.
Consider what receiving an inheritance has taught you. What do you wish had been explained? What conversations would have made the transition easier? What do you want the next generation to know?Use those lessons to revisit your own estate plan, beneficiaries, family conversations, and intentions for the wealth you will eventually share.
Navigating a financial inheritance with wisdom and courage means stewarding what you received with care, strengthening it where you can, and preparing those who may one day receive it from you. In doing so, you begin to Treat Wealth as a Family Business™.
Your inheritance is part of a legacy that began before you and may continue well beyond you.
Blog post written by Lazetta Rainey Braxton, MBA, CFP®, TRWC Founder, Visionary Guide & Wealth Strategist.
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Treat Wealth as a Family Business™ is a family wealth philosophy of The Real Wealth Coterie.
