Sudden Wealth: What Women Need to Know.

Even when the influx of a large amount of money is a happy event, it can provoke many different feelings. There can be even more emotions at play when it is an inheritance, a sale of family property, or even a business exit.

And then there's the cash itself – what do you do with it? Should it change your financial plan? Should you gift it to others? Charities? Splurge wildly? Pretend it didn't happen?

There's no right answer to what to do with the money, but some sensible steps can put you in a better position to make good decisions that are right for you now and in the future.?

?What to Do First

?Emotional flooding in the face of an inflow of money can be just as unsettling as facing of a loss. Money is tangible, and it makes whatever event that led to the sudden windfall very real. Taking time out to understand and process your emotions is the key thing.

?Some practical considerations:

• ?Are there any immediate deadlines that need to be met?
• Do assets need to be retitled?
• Do you need to update your estate plan to protect children?

An attorney and a financial advisor can help you take care of any short-term needs to safeguard the new assets and include them in your estate plan.

?Make Proactive Tax Plans

?Unless the money results from a personal injury lawsuit, taxes will most likely be involved. There are strategies to minimize taxes, and there are other considerations to think through. You need to know how much is yours and how much will go to Uncle Sam.

?The source of the windfall will often dictate the tax strategy deployed. For example:

?

• Inheritances can be real property, stock, cash, art, or other valuables. If you've inherited a stock portfolio or a 401(k) or IRA, you'll need to be aware of timelines for withdrawing the money, and you'll have to think about the cost basis of the stock you've inherited. If you can use the step-up in basis, you may eliminate a large portion of taxes.
• If your company just IPO’d, you'll need a plan to sell the stock that considers timelines, vesting, exercising, holding periods, etc. It can get complicated, and the amount due will depend on how long you hold the stock when you sell and what the share price is.
• A deferred sales trust may help you minimize taxes if you've sold your business. You'll have to set up the structure and identify when and how you will gain access to the funds over time.

?You Have It. Don’t Lose It.

You have more assets, so you also have more risk. Having a lot of money means requiring more asset protection. Do you need an umbrella policy? Do you need to change your homeowner's policy, or add a rider to insure specific assets?

?What is Your New Investment Goal?

Is the money just a nice to have, or does it constitute your retirement plan? Will you give up work early and live off the proceeds??Will you start a business or get serious about a passion project? Do you want to use the funds to make a difference and support causes or charities that are important to you??May you want to do a little bit of all of these options.

Most advisors provide one-size-fits-all answers, but your situation is best suited for customized strategies that meets your unique goals.

?We understand.

Spending the time to identify what you want to do and then building a financial and investment plan around it is a good idea – and it can take some time to come into focus.

The Bottom Line

The thing about life-changing money is that you want it to change your life for the better. It can feel like a lot. We understand.

A successful plan means thinking through what you want, selecting from among options, and then carefully implementing it. Give us a call. We can help.

#women #wealth #suddenwealth #waveshappen

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

This content not reviewed by FINRA.