How to Financially Prepare for Inheritance Money

  • Set up a trust.
  • For example, if a beneficiary does not want a partition of the house, one could deduct the proceeds from the liquid portion of the assets (ie: stocks). That is, sell the stocks to cover the portion of the house to buy-out one of the beneficiaries.
  • Talk to a professional! Find a estate planning lawyer such as through American Academy of Estate Planning Attorneys.
  • If you have a large inheritance do not do any big decisions for at least 6–18 months after getting it. Don’t rush into anything.
  • Have a “written” investment policy for yourself. How do you specifically want to invest your money for you. Then when you get an inheritance you simply follow it. Have this done in advance. Such as 50% US and 50% international low cost index funds.
  • Add a POD (payable upon death) or TOD (transfer on death) for Checking and savings accounts.
  • Ensure your beneficiaries are up to date on all retirement accounts. Whoever is listed as the beneficiary superseded what is on the trust (unless the trust is specified as the beneficiary).
  • Do a direct transfer of IRAs to avoid taxes.
  • Important documents to have in place: a Will or Trust, Power of Attorney (including one for health care and durable financial).
  • A trust gives a lot of control over your assets after you die.
  • Having a a trust avoids probate which is a legal system to go through which is very expensive and takes a long time.
  • A good first step for personal financial understanding is tracking your net worth.

Quotes:

  • “If you don’t say anything about it, you will actually lose control. You lose control of what you’re wishing for.”
  • “Buy-and-hold, long-term, all market-index strategies, implemented at rock bottom cost, are the surest of all routes to the accumulation of wealth.”
  • “No one will care more about your money than you do.”

Buddhism, mixed with my current interests in economics, privilege, immigration, etc. Email <my username>@gmail.com