Case Study

Dealing with an Inheritance

Sam and Ava are a couple with two young children. Ava's mother died suddenly, leaving an estate which included a home, an investment portfolio including an IRA and several CDs in a local bank, a vacation home, and several stock certificates in a safe deposit box. Although Ava's mother set up a trust which held her portfolio and title to the real estate, a portion of her estate was subject to probate.

An unexpected windfall can trigger many responses. While some may see this as a way to go out and buy the things that they never felt they could afford, others may hoard the money, fearing that seeing the balance dwindle will put them at risk of not reaching their goals.

We helped Sam and Ava to work through the issues of dealing with an inheritance:

• working with their estate attorney and providing information on the basis of inherited assets
• providing an analysis of the inherited real estate, and helping them to decide whether to lease, sell, or move into the home and sell their own 
• incorporating the inheritance into their own financial portfolio, reflecting their risk tolerance and time horizon and not that of Ava's mother
• handling tax related requirements such as inherited IRA distributions
• providing financial planning before, during, and after the estate settlement, and implementing the plan
• helping them to set up college funding accounts for their children
• helping them to see the big picture, including how to reach their goals and consider "what if" scenarios