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.