Cortes Law Firm Oklahoma City Estate Planning Attorney - A 2012 study by Ohio State researcher Jay Zagorsky found that about one-third of Americans who receive an inheritance have negative savings within two years of getting their money, and of those who receive $100,000 or more, nearly one in five spend, donate or simply lose it all. If you are about to receive an inheritance, there are several steps you can take to insure your funds will last longer than a few years.

Don't Make Any Hasty Decisions.

Once you receive your money, don't make any hasty decisions about what to do with it. Instead, park the funds in a safe place such as a savings account, money market, or CD until you have had enough time to put together a long term financial plan. In case you're unsure about how to plan this, you might consider hiring a personal financial advisor who can guide you through the process. If you don't already have one, set up an emergency fund that will cover six months of expenses. If you already have an emergency fund, consider adding to it to cover one year of expenses. If you are married, you will need to decide early on if you want to keep your inheritance in your separate name or place the funds in joint names with your spouse. If you are considering giving some of your inheritance to your children, you could invoke a gift tax or negative income tax consequences and should only proceed with gifting once you understand all of the consequences. Still Working? Put Away More Towards Your Retirement. If you are working and are not contributing the maximum to your 401(k), bump up your withholding, particularly if you are not meeting your employer's match. If your employer does not offer a 401(k), start funding an IRA. Note that if you have inherited a traditional IRA, any withdrawals you make will be included in your taxable income. You can minimize the income tax consequences by only taking required distributions and leaving the balance invested inside of the inherited IRA.

Hire a Team of Professional Advisors.

You will need a team of professionals to help you develop long term plans for your inheritance. A financial advisor will help analyze your current finances and build a solid financial foundation to include investment advice, insurance (life, long term care, and liability), credit and debt management, college savings, and retirement planning. Your advisor can also help you look into the future and plan for long term financial goals, such as purchasing a first or second home or starting a charitable foundation. An accountant will help you determine cash flow and minimize capital gains and other income taxes. An estate planning attorney will help you create or update your estate plan (everyone needs a will, revocable trust, advance medical directive and durable power of attorney), decrease or eliminate estate taxes (federal and/or state), set up a gifting strategy, meet your charitable goals, create a family legacy, and protect your inheritance from creditors, predators, and lawsuits. If your inheritance is large enough, it has the potential to last your lifetime. Don't go it alone. We are here to answer any questions you have about receiving, growing, donating, protecting and ultimately passing on your inheritance to your loved ones.