So You’ve (Unexpectedly) Inherited Some Money…What Next?

It can feel like a rollercoaster when you unexpectedly receive news of an inheritance. It could be completely out of the blue, or it could include a larger or smaller sum than you thought might be available. Here are five steps to navigate your new financial situation, and how to best handle it when others may be involved.

Step 1: Acknowledge that there are emotions attached to this money.

Many inheritors skip this first step. You could be be feeling excitement, sadness, anger, jubilance, or anxiety. No matter what you are feeling–and how often it changes over the coming weeks and months–it is important to appreciate that these feelings are natural and appropriate.

Step 2: Appreciate that nothing needs to happen fast.

Resist the urge or impulse to make a big purchase or change your lifestyle until you have thought through all the implications of each choice. Also, resist the pressure when others ask you to loan or give them money. By approaching this as a process and consider all options before using any of the money, you will be happier when confirming a loan or gift will be an appropriate use of funds down the road.

I recommend at least a three-month timeline for this process to consider ideas. This time period allows you to balance your emotions about honoring the person who provided the inheritance, and letting go of the past so you can plan for your future.

Step 3: Set up a strategy for reviewing options with a group of trusted advisors.

Ideally, these will be people without an agenda for the money.

Spend a little time dreaming about saying YES to YOU! How do you want to use the money for short-term and long-term outcomes?

For some people, the dream could be starting a business, paying off a loan that causes you anxiety, taking a big trip, buying a house or making charitable donations—all of these are noble thoughts and deserve full exploration of the pros and cons.

Get input from this group (colleagues, friends, family, advisors) to help you articulate these dreams and how they connect to who you are and your future. This group can also be your accountability checkpoint when you have an impulse to spend the money. Sometimes a counselor or coach is helpful to process these ideas and the associated emotions. Ultimately, you can come up with a plan with categories for the money , for example:

  • 5-10% for a splurge (BIG YES TO YOU!)
  • 50% investing for the future (you and your family legacy)
  • 40-45% for your dreams that you have created and discussed with your advisors (starting a business/gifts/loan payoffs/charities etc)

Along the way, stay curious about the process and your reactions.

Step 4: Recognize that this is a great opportunity to take a look at your inherited beliefs about money.

Decide if what worked (or didn’t work) in the past is really a match for the person you are today.

“Our past is a story existing only in our minds. Look, analyze, understand, and forgive. Then, as quickly as possible, chuck it.”—–Marianne Williamson

I recommend reading The Emotion Behind Money, Building Wealth from the Inside Out by Julie Murphy Casserly, CFP. This book can be helpful as you navigate these financial choices.

Step 5: If you choose to invest some of the money, look at it through fresh eyes.

Was it invested using a 1980s model with companies that do not behave in ways that match your values? If it was inherited from an elderly relative, perhaps it was invested in a risk averse manner that matched them.

However, you are younger and more interested in building a solid nest egg for the future, and you may be willing to take more risk to hopefully generate higher returns. If you resonate with the triple bottom line philosophy, specifically seek out companies that fulfill these characteristics (they make a profit and make a difference in the world). This investment strategy leaves a legacy for future generations that clearly states what you believe in and value.

Rejoice that you have been given this opportunity to responsibly navigate this inheritance.


Have questions about an inheritance or need a consultation for your investment strategy? Contact us.

Meeting Katharine Hayhoe and Thoughts on Climate Change

Raised by an environmental scientist, I have heard about global warming for as long as I can remember. However, as I am reminded each holiday when I sit down with extended family and friends, there are still many people I know and love who do not accept climate change.

This past Thanksgiving, I experienced a major turning point when my grandmother said that based on all the changes she has noticed, she is ‘beginning to believe’ global warming is real.  She wondered aloud: how was global warming becoming a religious or political topic?

Dr. Katharine Hayhoe did a marvelous job covering that question during her keynote at First Baptist in Asheville on April 5.

photo by Dayna Ruggerio

photo by Dayna Ruggerio

In her talk, “Science, Faith and our Changing Climate,” Dr. Hayhoe said that discussing whether or not someone believes in climate change is like asking if someone believes in gravity – whether or not they do, they are still falling in one direction if they walk off a cliff.

When you ask someone about their belief on climate change, she explained, the problem with asking at all is that it ultimately questions their opinions, identity, and ideology.  This immediately makes a person defensive and emotionally involved.  If someone asked you if you believe in gravity, you would likely feel a little confused by the question, but not have the same strong emotions you experience when asked if you believe in global warming or if you believe in a certain religion.

Dr. Hayhoe makes it clear that she does not believe in global warming.  She knows based on scientific evidence that it is a fact and that humans are causing it.  Unfortunately, because we view and discuss global warming as if it is something to be believed in, it is associated with religious and political ideologies.  This has resulted in barriers in some faith communities to accept climate change as a fact.  And as long as we continue talking about global warming as if it is something to be believed in, there will doubt.

Faith communities can be powerful forces to combat climate change.  Through joint prayer and action, they can make an enormous impact.  A congregation divesting from fossil fuels makes more of an impact than one individual.  A place of worship installing solar panels on its roof makes more of an impact than solar panels on a small home.

Because of the power the faith community has to make this world a better place, it is critical for us to stand together against global warming.

Hopefully we will all one day live in a world where no one believes in global warming, because it is accepted as a fact.

For information on what you can do as part of a faith community, please visit the following sites:

  • ReVest — socially responsible investing for faith organizations and individuals
  • Climate Caretakers — a global community of Christians committed to prayer and action on climate change.
  • Katharine Hayhoe — Katharine Hayhoe’s official site

photo by Dayna Ruggerio

photo by Dayna Ruggerio

 

 

Women Are Leading More Investment Strategies…Here’s Why

“Money is something we choose to trade our life energy for. Our life energy is our allotment of time here on earth, the hours of precious life available to us….it is limited and irretrievable…our choices about how we use it express the meaning and purpose of our time here on earth.”

—Joe Dominguez and Vicki Robin, Your Money or Your Life

Contrary to the popular belief, money isn’t a man’s game. More and more women are now making the financial decisions for their family, including investment strategy.

According to the Family Wealth Advisors Council:

  • In four of 10 American families, the woman is the breadwinner.
  • Nearly 95% of women will be their family’s primary decision maker at some point in their lives.
  • Women account for more than 40% of all Americans with gross investable assets of more than $600,000 and 48% of the country’s millionaires.
  • An estimated $25 trillion will accrue to women through 2030 via generational and spousal transfers. (By then, at least two-thirds of the nation’s wealth will be in women’s hands.)

Generally speaking, women put energy into the areas they care deeply about.

How they behave with money is a gauge that reflects these values.

Just as women are carefully reading food labels and altering household purchases to keep their families healthy, they are also thinking about the entire path and impact of each and every dollar they spend…especially when it comes to moving larger amounts of their money around.

What kind of company or service do they want to support (or avoid) to reflect their value systems?

The moment they go with either-or is the moment that choice reflects them as an individual, a partner, wife, mother, employee or employer. Many women are curious about the overall behavior of the corporate entity that make specific products, and will actively complete research or seek out companies that exhibit the values and attributes that match their view of the world. These attributes may include treating employees and suppliers honorably, giving back to the local community, and using only their fair share of environmental resources.

Women are currently leading a sweeping divestment-reinvestment shift in finance.

They are choosing to invest in and support companies that hold a triple bottom line philosophy. This means a company not only pays attention to making a profit, it is also socially and environmentally responsible.

The sheer volume of dollars women are making decisions about will shape the future of the investment markets.

This act of consciously investing will affect both sides of the gender coin–it already has in certain governments, institutions, endowments, and financial groups.

Whether you’re a man or a woman, do a check-in with your financial and investment decisions, and see if you’re making choices that reflect your values.


To schedule an appointment with Leesa Sluder, contact us.