inheritance

If you receive an inheritance, make sure that you only receive financial assets. 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 gives you the bigger 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

If you already have an advisor, he can help you invest your inheritance since he is already familiar with your situation and needs. Receiving an inheritance is a good time to update/revise 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 he’s 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 as such, he might not even suggest those to you. And does the broker know 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 advisor who is familiar with cross-border financial issues and can help you maintain a U.S. brokerage. 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 this: profile-financial.com/inheritedira 

Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.

Published October 12, 2015. Updated December 2019.

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