Navigating your inheritance in a difficult time

27 February 2020

Natasha Johnson, Wealth Adviser |

For many, receiving an inheritance will come at a time of sadness and reflection after losing a close loved one. While this may not be an ideal time to make complex financial decisions, it is a good idea to take a step back and consider your options with time.

An inheritance can be received in several forms, including cash, shares, property and superannuation. Depending on the type, there may be complicated tax consequences to consider which may influence if the asset is retained or sold and, if it is to be sold, the timing of the sale.

Another key consideration is if the inherited asset has multiple beneficiaries. An asset with multiple beneficiaries can lead to complications if each of the beneficiaries has different ideas around the retention or sale of the asset.

Having timely and open communication is vital in ensuring the relationship between beneficiaries does not become strained or hostile while working towards an agreement. Although discussing a future inheritance can be difficult, it is ideal to start these conversations as early as possible to avoid having to make major financial decisions at a time where emotions are running high.     

Once the inheritance has been received, the stage of life and financial position of the beneficiary are likely to influence how the inheritance is dealt with. Additionally, the beneficiary must establish their priorities for the inheritance – are they looking to feel more financially secure, ease the burden on day-to-day cash flow, use the inheritance to build wealth for retirement/bring forward their retirement, or build the inheritance to assist future generations? 

Given the complexities associated with receiving an inheritance, it is important to understand your financial situation before making any sudden decisions. A BDO financial adviser can guide you through your options and the long-term implications to ensure you can make a fully informed decision that aligns with your priorities and long-term plans.

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact the BDO member firms in Australia to discuss these matters in the context of your particular circumstances. BDO Australia Ltd and each BDO member firm in Australia, their partners and/or directors, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

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