Here are some common sense guidelines to help you invest successfully and avoid common mistakes.…
What to do with an inheritance or distributions from Tribal Minors Trust and Per Capita
Managing wealth or liquid assets requires short and long term planning. You’ll need to understand your priorities.
Don’t rush into anything without a plan
First, identify and assess your financial priorities. Look for short-term opportunities to use this money to further your financial goals.
- Create an emergency fund that will cover at least six-month’s worth of expenses.
- Pay down or eliminate debts. Some experts recommend starting with the highest interest rate debts first.
- Check in on your retirement savings progress. Do you have enough saved?
- Review your insurance coverage. Do you have appropriate health insurance? Property and casualty insurance? Do you have life insurance if there are others who rely upon you?
- If a mortgage could be a burden in retirement, considering paying that down.
- Look at funding a child’s college education.
- Consider your own legacy for your children or grandchildren, or for your favorite charity or worthy cause.
If you’re not sure where to begin, consider these questions when thinking about how to handle this money:
- Is the money needed for immediate use?
- What do you want to use the money for? Organize your wish list into “needs” versus “wants”. Prioritize the needs first but you may be able to spend a small portion of your payout to buy something you want or do something fun
- What kind of legacy do I want to leave to my heirs?
- How can I make the wealth last?
- If from an inheritance, what could be done with any non-liquid assets, such as cars, boats, real estate, and jewelry?
- How would my benefactor want me to handle this inheritance?
- With the Minors Trust and per capita Distribution, how can I invest it for my future education or achieving the great American dream of owning a home?
Take time before making decisions
You may experience lots of emotions when coming into a payout. These feelings can cloud your judgement or keep you from seeing the long-term possibilities or consequences of your decisions.
Inherited wealth often results from the passing of a close family member or friend. You may feel guilty or undeserving of this money. Others may think that how things are distributed is unfair, creating friction between survivors.
Sudden access to significant money like an inheritance or Minors Trust or Per Capita Distribution could create a lot of excitement, leading to a spending spree or impulsive decisions for major purchases.
You may also feel overwhelmed by responsibility and unsure of what you should do next.
The many feelings you may experience after receiving a payout are why it’s so important to take time before making decisions.
Consult with trusted advisors
You don’t have to go through this alone. Trusted advisors can work with you to manage the inheritance in a way that lines up with your goals by:
- Determining the best investment options and planning strategies to build, protect, and manage your money
- Developing a financial and estate plan
- Understanding the various financial issues involved with different types of inherited assets