If you receive an inheritance, make sure that you only receive financial assets. Just because you inherit assets, doesn’t mean that you need to use the same financial advisor as the deceased did. Before you inherit someone else’s financial advisor, consider the following points:
Put everything under one umbrella
Consolidating your assets, including the inheritance, together in one brokerage account simplifies financial maintenance. Seeing how all of your assets interrelate provides a big picture, making it easier to monitor overall results. While it is possible to diversify with different accounts, overseeing the relationship between various positions is easier when everything appears on a single statement.
Your current financial advisor
Make sure your advisor is familiar with your situation and needs. Receiving an inheritance is a good time to update your financial plan. Moreover, understanding your current situation is crucial if you are a U.S. citizen living in Israel. For example, it is potentially problematic if an American citizen inherits Israeli mutual funds. Make sure your advisor understands cross-border financial issues and invests your money accordingly.
The broker who handled the assets before you inherited them may have had good reasons to invest the way he did. However, the investments the deceased chose may not be suitable for you.
Also, consider technical issues: If your advisor is abroad, are his office hours convenient for you? What licenses does the original advisor hold? For instance, an insurance broker may not be able to put inherited funds in certain asset classes, and therefore, he might not even suggest those to you. Make sure the broker knows how to maintain the tax-deferred status of an inherited IRA account.
An advisor who understands both U.S. and Israeli finance
If you live in Israel, consider using a financial professional who is familiar with cross-border financial issues and can help you maintain a U.S. brokerage account. If you aren’t aware of the issues affecting a foreign trust or inheritance (including inherited IRAs), consider contacting a financial professional who has the experience and licenses to help you.
To learn more about the issues with inherited IRAs, read: profile-financial.com/inheritedira
Douglas Goldstein, CFP®, GFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.
Published October 12, 2015. Updated February 2023