Managing an Inheritance

Receiving a sudden inheritance may create, as well as relieve, some financial stress. There are steps you can take when you decide how to put your new inheritance funds to good use.

Identifying your financial goals and dreams is an important part of managing your new wealth. Consider the following:

• Would you like to bolster your retirement savings?
• Are there ways to manage upcoming income and estate taxes?
• Are you planning to buy a home?
• Do you plan to pay for a family member's education?
• Have you considered helping out loved ones or contributing to a favorite charity?
• Are you planning any other short-term purchases?

Educate yourself on the practical consequences of added wealth—especially wealth that comes through an inheritance. A financial advisor can help you decide which (if any) of the following is relevant to your situation.

• Impact on insurance. If you buy expensive jewelry or artwork, consider more property or casualty coverage. You may also need more life insurance to help ensure your beneficiaries receive a greater portion of your estate after taxes. Your inheritance may make you a more attractive target for large lawsuits, so it makes sense to consider an umbrella liability policy for protection.
• Impact on estate planning. Make sure your will is updated to accurately reflect your wishes. If your new wealth is significant, meet with your attorney right away. Consult a financial advisor to help determine your strategy for the estate taxes for your beneficiaries.
• Gift giving. Before you share your inherited wealth with loved ones or with a charity, draft your financial plan. Document all gift transactions.

Your life is always changing, and so are your finances. That's why financial planning is an ongoing process. Working with an Ameriprise financial advisor gives you the freedom and flexibility to help you make sure your investments always reflect your goals for the future.