Aside from the obvious grieving period, the aftermath of the passing of a friend or relative can be a stressful period for another reason – namely, the process of dealing with any inheritance and the pressure of what to do with it once it is obtained. However, used wisely an inheritance can make a substantially beneficial impact on your finances and your future. There are a few things you can do with an inheritance that will ensure you are on a stronger financial footing in later life.
Take Your Time
Quite frankly, the first thing you should do when dealing with an inheritance is not rush into anything. You and your family need a period to grieve and making rash decisions can impact you negatively if you’re not careful. Take the necessary time to deal with the person’s passing before moving on.
Do Your Research
If you have a family solicitor, they should be able to help you make the necessary arrangements to deal with the deceased’s estate. The Government is a good source of information on this, offering detailed guides on what to do in the event of a received inheritance.
Pay The Government
The Government will want a cut of the inheritance in the form of an estate tax. The IRS works out what the deceased’s total net worth was and requires a percentage of that, which is often more than the relatives have hanging around in their bank accounts. One of the best ways to pay for inheritance tax is to sell unwanted properties, with ‘does-what-it-says-on-the-tin’ sites proving a viable resource when selling unneeded houses. Sites like these will often sell houses no matter what the condition, so don’t feel like you need to pay for repairs before trying to sell.
Erase Your Debts
Receiving a large windfall at an unexpected time is the perfect opportunity to clear your debts and improve your credit rating. Pay off any outstanding balances on credit cards or perhaps even your entire mortgage. Sorting out your debts will put you in a much better position for the future.
Invest Your Money
Research various bank accounts, ISAs and bonds that have increased interest rates and put your money aside into these. However, you should keep an eye on these accounts as interest rates constantly change – just because a particular account is a strong performer one year does not necessarily mean it will be so the next, so be prepared to move your money around.
Give To Family Members
Spreading the wealth amongst family is not only a great way to help those nearest and dearest to you, but will also help keep the memory of your deceased loved one alive. Giving the money away as gifts early will also mean the Government will have a smaller claim on your own estate in the future.
Enjoy Your Windfall
Whether you spend your money on more education to improve your career prospects or use it to buy stocks in a strong-performing firm, make sure you enjoy it – your deceased loved one would want you to.