Let's say you're about to inherit a piece of property, that you can liquidate and receive $1 million after paying taxes. You also just retired. Is there a downside to all this?
Talking with most people about your news if you're about to come into a large inheritance will usually illicit the same response: "I wish I had your problems." However, getting a large inheritance is not necessarily easy. With your large inheritance comes a large responsibility.
Many people who are unfamiliar with how to handle large sums of money end up squandering their inheritances on loans to friends and family or lavish gifts for themselves and others. Or, they might put the money into a risky investment that they should never have gotten involved with to begin with.
The primary downside to inheriting a lot of money is the risk and stress surrounding losing it to:
-- Friends and family asking to borrow money
-- Getting risky with your investments
-- Bad money management skills
-- Buying "toys" or blowing your money on expensive luxuries and vacations
Avoiding these and other "risks" is key after receiving a large inheritance, and you may want to reach out to a professional for assistance. Creating a relationship with a financial advisor is the best place to start. A financial advisor can help you create a budget and a safe and secure investment plan that allows you to generate some income off your money while keeping it safe for the future. A Tennessee estate planning lawyer will also be an asset to you and your own heirs by helping you create an estate plan that will leave something meaningful and helpful behind to your loved ones after you're gone.
Source: Time, "Just Retired and Inheriting $1 Million: Is There a Downside?," Elizabeth O'Brien, Jan. 17, 2017