So, you’ve received an inheritance. You may be feeling a range of different emotions, particularly if someone close to you has passed. It’s important to acknowledge these feelings and to honour their legacy.

An inheritance can bring both opportunities and responsibilities. Whether it comes through careful financial planning or unexpectedly from a loved one, managing this newfound wealth and making informed and wise decisions, is a vital step towards securing your financial future.

Here we share some steps to consider when navigating the complexities of an inheritance but straight off the bat, we will say that it’s a good idea to connect with your accountant, a financial adviser or a lawyer, who understands the financial landscape and regulations when it comes to inheritances.

Clarity of your current financial situation

Before making any decisions regarding your inheritance, gaining a clear perspective on your current financial situation is important. Our advisers can help you evaluate your income, expenses, debts, and investments, creating a foundation for a customized financial plan aligned with your short, medium, and long-term goals. We can also help you to manage Centrelink and the impact an inheritance may have on any government entitlements.

Estate Planning: Preserving Your Legacy

Estate planning is a vital aspect of managing your inheritance, designed to ease the burden on your loved ones when you are no longer present. We can assist in developing an effective estate plan, collaborating with your accountant and solicitor to ensure your wishes are documented through a current will, enduring power of attorney, and other relevant legal considerations. We will also ensure you have binding nominations in place.

Debt Management: Easing Financial Strain

Overlooking the impact of outstanding debts can hinder your overall financial health. Considering your inheritance, our advisers can help you devise a plan to manage and reduce existing debts, potentially renegotiating terms to make repayments more manageable and freeing up funds for wealth-building opportunities.

Investment Strategies: Cultivating Sustainable Growth

An inheritance can open doors to crafting an investment strategy aligned with your risk tolerance and financial objectives. Whether diversifying your portfolio, exploring real estate, or considering ethical investments, our advisers will collaborate with you to construct a sustainable and resilient investment plan.

Emergency Fund and Insurance: Creating a Financial Safety Net

Life's uncertainties highlight the importance of a financial safety net, and an inheritance can greatly help in securing this. We can guide you in establishing or strengthening your emergency fund, ensuring liquidity to handle unforeseen circumstances. Additionally, our team will help assess your insurance coverage to protect your assets and loved ones against unexpected events.

Tax Planning: Optimizing Returns and Minimising Liabilities

With an inheritance, taxes play an important role in wealth management. Working alongside your accountant, we can help develop a tax-efficient strategy, minimise liabilities and maximise after-tax returns through deductions, tax-advantaged investments, and staying informed on the latest regulations.

Retirement Planning: Securing Your Future

An inheritance offers an opportunity to enhance your retirement savings. We can assist in evaluating your retirement goals, estimating future expenses, and developing a plan to ensure financial security in your golden years, whether through contributions to superannuation or exploring alternative retirement investment options.

Education and Support for Beneficiaries: Passing Down Financial Wisdom

For those considering provisions for future generations, we can help educate and prepare your beneficiaries. This involves strategies for wealth transfer, establishing trusts for minor beneficiaries, and fostering financial literacy to ensure a legacy of financial stability.

At Sound Life, we can take the stress out of managing your inheritance, to guide you to make informed decisions to maximise its potential. Still have questions? Our team is here and happy to answer them.  Please phone us on 9841 1688 or send an email to enquiries@soundlife.com.au

Sound Life & Superannuation Agencies Pty Ltd trading as Sound Life Financial Services is the Authorised Representatives of Synchron, AFS Licence No. 243313.

The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.