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Index
Getting A High Tax Grade For Higher Education Credits
Five Retirement Questions To Answer
Q's And A's About Financial Aid
One Last Shot At A Tax Exemption
When To Disclaim An Inherited IRA
Trust As IRA Beneficiary: Not Crazy
Grandparents Can Become Big Spenders For Their Offspring
5 Retirement Mistakes You Can Fix
This Plan Is Just For Nonprofits
Federal Estate Tax Reduced, But What About State Taxes?
Tax Rules For Collectible Donations
What Are The Main Items On Trump's Tax Reform Agenda?
Online Survey Shows Split In Funding Home Down Payment
Tune Into The Tax Break For NUA
Retiring Abroad? Be Ready To Take The Bad With The Good
 

Five Steps When You Inherit Assets

During the next 30 years or so, an estimated $30 trillion is expected to change hands, and many offspring of older Baby Boomers may inherit a small fortune. Here are five practical suggestions for handling the windfall:

1. Give yourself time to grieve. If you're like most people, the loss of a loved one will come at an emotional cost. So you're probably not going to run out and buy a luxury car or book a cruise the day after the funeral. Allow yourself enough time for your grief to pass before you make any major decisions. Don't let your heart overrule your head.

2. Consider the limitations. Just because you've come into some money doesn't necessarily mean you'll be living on Easy Street. So try to resist the impulse to splurge on items you still can't afford. You might consider using some of the money for a one-time "treat" for your family and use the rest to invest for long-term goals.

3. Pay down debt. If you owe a lot of money, this could be a good opportunity to pay off some of your obligations. While you don't have to rid yourself of all of your debt—you might decide to keep your mortgage and perhaps a car loan—it could make sense to retire credit card and other debt that has high interest rates.

4. Set goals. In considering how to use your windfall, you might divide your objectives into short-, medium-, and long-term goals. For instance, in the short term you may decide to move to a bigger home. A medium-term goal might be to save money for a child's college education through a Section 529 plan. And a long-term objective for many is to secure a comfortable lifestyle in retirement.

5. Create an estate plan. If you haven't done this already, your windfall could provide an excellent opportunity to prepare for the eventual transfer of your own wealth, including the assets you've just inherited, to other family members. You might decide to establish a trust for the benefit of minors or make other arrangements to help ensure financial security for a surviving spouse or grandchildren.

Fortunately, you don't have to do all this on your own. With the help of experienced professionals, you can develop a plan that makes sense. Don't hesitate to contact us for assistance.


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This article was written by a professional financial journalist for Old Dominion Capital Management, Inc. This material has been provided for informational purposes only and should not be considered as legal advice, investment advice, or a recommendation of any particular security, strategy or investment product. All investments contain risk and may lose value.

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