Receiving a large inheritance is a situation becoming increasingly prevalent as the average population age increases across Perth and Australia. It is a major event that can change your life for the better if planned for well from the outset. Boutique Advisers, and financial advice firms in general, are well versed in navigating the nuances that come with the transfer of inter-generational wealth. Some key areas are highlighted below on what to consider as part of inheritance planning and your overall financial life journey.
Take a moment to assess your inheritance
Initially, spend the time understanding the situation at hand and the composition of the inheritance you will or have received. Realising what type of assets and amounts are due will assist you to make clear and informed decisions on the way forward. Whether you’re receiving cash, property or other forms of investments, knowing how these operate from a liquidity and taxation standpoint will alter the decisions you make.
Put this into your own context
Once you have a clear understanding of your starting point, you will then be in a position to plan on the way forward. You should move on to working through what is important to you firstly, or what you want to achieve over the next period of time, and what the underlying drivers are for your goals. From there you can start to look at all your options, as there are many pathways you can take. This will depend on your own context and how your family grows over the years.
Financial advisers are well versed in helping clients work through these options and will provide you with a clear picture on the numerous pathways and various strategies you should consider.
Your emotions and decision making
Your newfound wealth may require a shift in your thinking, and can be a tough transition for your family given the monumental change to your financial situation. Seeking support from family and friends can often help, however this may prove to be a subjective influence on the decisions you make.
Working together with a qualified professional on this journey can often take a lot of the emotions out of your decision making process and assist you to navigate the emotional impact on your future, in an objective manner.
How best to manage and invest your wealth
Now that you’ve had time to fully understand the inheritance, qualify the impact on your financial situation and asses the emotional elements involved, you will now be in a position to make well considered decisions on how best to manage your wealth. Whether your priority lies with investing, savings, contributing to superannuation or gifting funds to family and charity, consideration of your options is paramount. Aligning this with your long term goals and vision will provide for a good long-term outcome that ticks all the boxes.
Your next move
This life-changing event is an area best approached with a clear mind and a sound strategy, with an overlay of what truly matters to you and your family. Be sure to take your time – please reach out to the team at Boutique Advisers for a complimentary and confidential discussion on your future wealth management needs.
Sean Hocking works with individuals and their families to provide peace of mind and clarity around their financial future. Having a roadmap in place which clearly articulates what’s important in the years to follow gives his clients the confidence to make clear and informed decisions throughout their financial life journey.