You Just Received an Inheritance or Other Windfall. NOW What Should You Do?

Did you just receive a lot of money you weren’t quite expecting? Enough money to seriously change your life?

Such as an inheritance, or company stock that <gasp!> actually turned into a bunch of money? I’ve been working with clients recently in both of these situations, and I’ve been struck by how difficult it is to know how to behave with “this much money” in play.

Even if you saw the money coming, actually having it be yours can still be a shock. So, whether it was a surprise or you had some warning, the best strategy starts with the same thing.

Step 1: Don’t Just Do Something. Stand There.

I recently took part in a (Facebook) conversation with a woman who’d sold her home, gotten a bunch of money for it, and was asking whether she should follow the insurance salesperson’s advice to invest in a permanent life insurance policy.

Lots of people had the same basic response: Don’t mix investment and insurance. Which I appreciated.  I also thought it missed the larger issue, which was:

Why did this woman feel pressed to commit to anything so soon after the windfall?

Haste makes for bad decisions, especially around such fraught topics like money. Sitting on her cash for 6 months (yes, watching that stock market zoom upwards, leaving her cash earning a paltry 1%) can be painful and difficult.

But it would let her gather her wits, adjust to her new situation, and make a reasonable plan. Which is infinitely better than hastily making a bad or even merely “inappropriate” decision out of greed, fear, or the burning desire to “just make this anxiety and uncertainty go away!”

Susan Bradley, a financial planner who specializes in what she calls “sudden money,” calls this period of time the “Decision Free Zone.” Your prescription is to Make No Decisions. It’s not a time of doing nothing out of ignorance or fear or laziness. It’s a time of actively and intentionally doing nothing to allow your mind, body, and soul to sort themselves out a bit after such a big change.

Prepare for All Your New Besties.

When people get wind of how much money you now have, they’re going to come up with a lot of reasons, some even reasonable-sounding reasons, for why your money should be theirs. Business ventures, financial products, important expenses they can’t pay for themselves. Some people might be nefarious, some consciously selfish, and some utterly unconscious of this reaction to your newfound wealth. But the result is the same: asking you to give some of your money to them.

A colleague of mine works with some NFL players. And he says that, without fail, when those players start getting their big paychecks, they are suddenly Very Popular. And he has to counsel them to be on their guard.

But you don’t have to have millions and millions of dollars to see this reaction. Turns out, most people aren’t good at managing their money, have no sense of what “enough” is, and therefore always need or want more money. In this case, that’s your money.

Your first line of defense is Step #1: Do Nothing, for six months to a year. That can be your excuse. And a valid one at that.

Hell, if you have a financial advisor, blame them. “I’d really love to help you, but my advisor won’t let me.” Reminds me of being in 7th grade and “blaming” my parents for not letting me do things I didn’t want to do anyway. Whatever gets you through, woman…no shame.

Ideally, Make a Plan for It Ahead of Time. But, in Reality…

If you didn’t have or take the time to make a plan for this windfall ahead of time, and your DeLorean is in the shop (fellow children of the ‘80s, I salute you), then the next best thing is to make a plan now.

As I mentioned above, park your cash safely in, say, an online high-yield savings accounts, or even just a separate bank account at your usual bank. (And remember, if it’s more than $250k cash, you have to spread your money around so that it’s all covered by FDIC insurance.)

The point is to separate it off from your usual cash flow and bank accounts because otherwise you will just fritter the money away thoughtlessly. Because that’s how we humans roll.

While your cash is protected from both market crashes and bad ideas, take time to think about how the money can serve you, both the Now You and the Future You.

This is a wonderful opportunity for some soul searching. And it doesn’t have to be all woo-woo and unstructured and involve crystals and long walks in the woods.

But through intentional thought, conversation, and work (yeah, I said “work”!), you’ve got to get the “why” of the matter. What matters to you? What is of core importance? What would you change about your life if you could? What would you keep the same? If you died tomorrow, what would you regret not doing or finishing? A lot of us have done values-based work in other realms of our life. It belongs in planning your financial future, too.

If you’re a DIY-er, I recommend Carl Richards’ The One-Page Financial Plan.

If the prospect of holding yourself accountable to doing this work, this sometimes uncomfortable work, this always evolving work, and to actually sticking to the decisions that come out of it, well, then, I propose you hie thee to a financial planner. One who looks far beyond just the numbers.

(I just had a vision that this is like the inverse of The Matrix. In that movie, we discover that everything, while looking human, organic, 3-D on the surface, is all just numbers underneath. Good financial planning, on the other hand, while it’s all numbers on the surface—When do you want to retire? How much do you need for a downpayment? What’s your savings rate?—the numbers are in fact covering up all the gooey, organic, unpredictable human guts underneath. Cool, huh? Okay, I was having a moment…)

Did you just get a bunch of money, and you want to make the most of it, but you’re not sure what that is? Is your stomach in a perpetual knot?  Reach out to me at or schedule a free consultation.

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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Meg Bartelt, and all rights are reserved. Read the full Disclaimer.

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