Inheriting Wealth? A Practical Guide to Savvy Financial Moves

By Brett Gottlieb

If you’ve received an unexpected windfall, it can be both a blessing and a challenge. The sudden responsibility of managing an inheritance can prompt many questions: How should you navigate this financial transaction? What are the next steps to preserve and grow your newfound wealth? Collaborating with a trusted financial professional is an important move to guide you through the necessary steps and provide insights into factors you may not have considered. In this article, we address these questions so you have a road map to make informed and thoughtful decisions about your inherited wealth.

Take a Moment

Before making any decisions about the money, you need to process the loss of your loved one. Failing to deal with your grief could result in emotional spending that compromises the money you’ve just received. If you give yourself some time, you may become more sensitive to your loved one’s wishes or have the chance to clear your head of complex emotions.

If your loved one spent their life building and protecting their wealth, they probably hoped you’d do the same. Letting your inheritance sit for a minute can help you overcome the initial temptation to splurge on something like a fancy vacation or expensive new home. If it’s important to you to honor their legacy, don’t forget to take care of your own emotions to help protect the wealth they’ve gifted to you.

Understand the Type of Inheritance You’ve Received

Common types of inheritances include:

• A trust account or cash
• A retirement account such as an IRA or 401(k)
• A house or other property

Knowing and understanding the types of inheritance you’ve received impacts how you access the funds, any taxes associated with it, and what your options are moving forward.

For example, if you inherit a home but don’t want to live in it, you may need to learn more about potential capital gains taxes before deciding to sell the property. If you find that a capital gains tax would be too costly, you might explore another option, such as renting out the house or living in it temporarily as you assess your situation.

Likewise, inheriting a retirement account comes with its own set of considerations, particularly if you inherit the retirement account from a non-spouse. Regardless of the inheritance you receive, it’s best to contact a tax-planning or financial professional who understands the intricacies of inheritance situations.

Take Stock of Your Financial Situation

Once you understand the type of inheritance you’ve received, you’re better equipped to align your plans for the inheritance with your other financial goals, such as:

• Contributing to your retirement account
• Paying down your mortgage
• Saving for your children’s college education
• Giving to a charity or foundation you care about
• Buying a vacation home or taking your family on vacation

Work With a Professional

When dealing with significant financial choices like deciding what to do with inherited money, professional guidance can help smooth the process. A reliable financial advisor offers experienced and unbiased advice, preventing you from making any big mistakes with your money. Beyond that, they can also work to optimize your inheritance, paving the way for a successful financial journey.

At Comprehensive Advisor, our goal is to provide clients with clarity and confidence regarding their financial future. We simplify the process by answering complex questions and tailoring our services to your unique circumstances. If you’re ready to collaborate with a financial advisor committed to your best interests, contact us today by emailing us at info@ComprehensiveAdvisor.com or calling (760) 813-2125.

About Our Advisors

Brett Gottlieb is the founder of Comprehensive Advisor and a financial advisor with nearly two decades of industry experience. He graduated from California State University-Chico with two bachelor’s degrees, in business administration and economics, and is Life Insurance licensed in several states. He is passionate about guiding his clients on retirement income planning, helping each client pursue their specific retirement goals, and defending the assets his clients have worked so hard to achieve. Brett is a California native and currently resides in San Elijo Hills with his beautiful wife and three children.

Our team of qualified professionals have experience in the financial service industry, and our advisors hail from some of the largest independent broker/dealers and banking institutions in the country. They have dedicated their professional careers to creating personalized financial solutions for individuals and families who seek successful retirement planning and currently offer investment advisory services through AE Wealth Management, LLC. Our advisors take a common-sense approach to the planning process and work with clients to create a retirement road map to help ensure their assets are protected and they receive the income needed to enjoy their future. Based in Carlsbad, California, they work with clients throughout San Diego County and beyond. Learn more by connecting with Brett on LinkedIn or email them at info@ComprehensiveAdvisor.com.

Investment advisory products and services made available through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor.  C.A. Financial & Insurance Services, CA Ins. Lic. #6000262. This material is intended to provide general information and is believed to be reliable, but accuracy and completeness cannot be guaranteed. Investing involves risk, including the potential loss of principal. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions.  Any references to protection benefits, safety, security, lifetime income, etc., generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. 2118800- 12/23.