What if I Get an Inheritance?

You will naturally mourn the loss of a close relative, but at the same time, you may feel guilty about your excitement at getting an inheritance.

Take time to figure out what you want to do with your windfall. I believe the following guidelines can help you establish a baseline of financial well-being:

1. Keep aside (in cash) any inheritance taxes you may have to pay. Check with your estate executor.

2. Make sure your cash reserve is at least a three-month supply of your fixed (not discretionary) expenses.

3. Pay off as much consumer debt as possible: credit card debt, school loans, auto loans, etc.

What Do I Do if There’s Inheritance Money Left Over?

The deceased may have wanted to help you get through grad school, take the vacation of your dreams, buy a house, or help fund your retirement.

People leave money at their death to help provide for loved ones and to thank specific people. Individuals don’t leave you money because they have to—it’s strictly discretionary.

A few cautions about your newly acquired windfall:

• Don’t lend away your new money; it may be unlikely you can get it back.

• This is a time to start informed financial planning.