You received an inheritance: Now what?

Losing someone is never easy, and when there’s an inheritance involved, the grieving process becomes even more complex. On the one hand, your loved one has left you with something wonderful to remember them by; on the other, managing that money can be a daunting undertaking.

And inheriting may become more common: By 2030, a large amount of wealth in the US is predicted to be passed down from boomers to millennials in what has been deemed “the great wealth transfer.” Millennials are estimated to increase their assets five-fold, inheriting some $68 trillion.¹

Receiving an inheritance can be a turning point, but it depends on how you handle the money from the start. With a few tips, you can manage it wisely.

1. Press pause

It may be tempting to jump right into spending your new wealth, but in the event of an unexpected inheritance, the important thing is to hold off on making new purchases. You may want to splurge, but you’ll thank yourself later for taking a more level-headed approach. Give yourself at least 30 days to get used to the idea of your inheritance — without spending any of it.

2. Make a list of ideas for how to spend the money

Maybe you have clear plan for how to use the funds, or perhaps you have a bunch of ideas bouncing around. Whichever it is, channel those impulses through pen and paper (or thumbs and phone). Make a list of all the things you’d like to do with the money, whether it’s a bucket list vacation or adding to your family’s emergency fund. Review this list a few times during the month to gain clarity on what you really want.

3. Work with a financial professional

While it’s a good idea to enlist a financial professional’s guidance at any income level, it’s particularly helpful after an inheritance. A professional can help you create a long-term strategy tailored to your unique financial goals. They can work with you to determine how much money you should save for a financial cushion, to put toward debt, or to finance a dream (such as starting a business).

4. Honor the giver’s legacy

One way to feel good about how you spend an inheritance is to honor the legacy of the person who gifted it. Did they value education? If so, they likely would be pleased to see the gift go toward your student loan payments or your child’s education. Did they love skiing? Maybe it’s time to plan a trip to experience an activity they cherished.

At first glance, the thought of receiving an unexpected inheritance sounds positively life-changing. And it’s true, another person’s generosity can make a difference in your financial life. But remember, there may be an emotional side to it. Take the time to absorb the impact of your newfound money. Don’t spend impulsively; decide how you’d like to spend it over time. With thoughtful preparation, you can have something to remember your loved one by for years to come.