Me and My Cousins Are Set to Inherit $10 Million Each. Advice Needed!

One of the most important things that can happen in someone’s financial life is a large inheritance. As the baby boomer generation prepares to hand over a substantial amount of wealth to their children, inheritances both large and small are starting to occur in a significant way. 

Unfortunately, as is often the case with many inheritances, some are unexpected and lead to considerable worry about how to handle them. This is a story that one Redditor posting in r/financialindependence is living right now, as they just don’t know how to handle everything. 

Key Points in This Article:

• Don’t count on an inheritance, but be prepared with a plan in case it does. 
• If you do inherit money, don’t disclose it to family or friends. 
• Should ETFs be a part of your investment strategy? Why not meet with a financial advisor near you for a complete portfolio review? Click here to get started today. (Sponsored)

Unexpectedly Large Inheritance

From this Redditor’s post, we learn that their grandparents had a very successful business, despite living a more humble lifestyle. After sitting down with the four grandkids last year, the grandfather had wanted to advise them about the inheritance, but he passed away before a meeting could take place. 

With the grandfather deceased, everyone learned that his estate was far larger than was anticipated. In fact, it was large enough to provide the Redditor’s mother with an income of 5% of the yearly interest rate and another 5% to be deposited into her trust. When the mother passes, the Redditor and his brother will split that amount. 

According to the Redditor, when everyone above him passes away, it is estimated that each of the four grandchildren will receive around $10 million. This is in addition to an educational trust that has been established to support the Redditor’s children and their children in attending college, purchasing a home, and other endeavors.

In other words, this Redditor is in a very strong financial position with this trust, but it all assumes that everyone above him doesn’t lose any of the money. Even so, the original poster is now trying to figure out how to navigate this new financial reality, as they may not need to plan as much for retirement as they once believed they would. 

Do Not Count on Money

The biggest red flag about any inheritance that hasn’t actually arrived yet is that it isn’t real until it’s in a bank account. While the Redditor’s mother and any of her siblings are already able to take advantage of some money, the four grandchildren are not. This means the Redditor should not make any financial plans with this money and must continue living as if this doesn’t exist. 

Said differently, any thought about suddenly finding a lower-income job that provides more happiness or reducing savings for retirement is a foolish move. The Redditor may very well end up with a small fortune one day, but until this money actually hits a bank account, the questions of how much and when are two that simply cannot be answered. 

Whether it’s a stock market crash, a health issue or overspending, there are several reasons why the Redditor may not see a dollar. Money can bring out the worst in people, leading them to do some unusual things. Therefore, planning as if this money exists right now is something this Redditor cannot do. 

When Money Does Come

For the moment, the Redditor needs to work and save as if this money doesn’t exist. Whether or not they want to change jobs is certainly something to consider, but they cannot act like a millionaire a decade or two before this might actually happen. 

For now, they need to continue working, and if that means exploring a better career, they should certainly do so. However, this money cannot be a factor, so it needs to be based on the funds the Redditor currently has. The same applies to saving, as retirement planning should not be altered at all, as it may very well be the only money the Redditor ever has. 

When discussing money with family or friends, the Redditor shouldn’t disclose any information to anyone. Even if you have to wait 30 years before telling someone, you don’t tell anyone, and if you get married, let the money be a surprise one day. There is no reason to start thinking that anyone is going to be after your money when it doesn’t exist, but stranger things have happened.

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