One of the most common side effects of receiving an inheritance is anxiety. This anxiety can be caused by the desire to honor the memory or wishes of the deceased, or fear of making a financial mistake. It should be comforting to have more money, but sometimes the cash infusion only increases financial worries.
Too much choice can be scary
Sometimes, beneficiaries feel overwhelmed by choice. They wonder if they should:
- Invest the money or spend it. After all, it’s “free” money, so do I need to act responsibly with it?
- Change the investments. If my father chose these stocks, who am I to sell them?
- Give to charity. Is it really right for me to get so much money and not share it with those in need?
What should you do when you get an inheritance?
If you inherit wealth, don’t let inheritance anxiety get the better of you. Take the time to decide what your next step should be. Allow yourself to grieve the loss of a loved one before making any decisions. It is fine to wait before taking any actions.
Once your inheritance is available and you are emotionally ready to make decisions, consult with a financial professional. He can help you look at the larger picture to determine how much money you can spend now versus how much you might want to save for the future.
First, consider your own financial security. Once you’re financially stable, then think about current spending and gifting.
There is a difference between excessive worry and being careful. Don’t let fear numb you into inaction. However, be aware that doing nothing can be as potentially devastating as making a wrong decision.
For more information on how to claim an inheritance that you receive from abroad, read The Inheritance Book at Profile-Financial.com/books
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 July 6, 2018. Updated July 2020