Inheritance of $250,000+

[MI-Roger]

1. Don't do anything yet. You have not yet received anything.
2. Keep the info to yourself until you know what you will receive, and have received it. This includes not telling your daughters. There is an old saying to "Not count your chickens until they hatch".
3. Screw the Index Funds. Some have done extraordinarily well this past decade but everyone forgets that with Index Funds you are buying the losers as well as the winners, IMHO.

 

[Dawg52]

Well.....if you really hit the lottery buy the car you wanted and maybe the cabin on the lake you always wanted. But if its the amount you are thinking buy the car and allocate the rest to your normal investment AA.

Try not to get too excited at this point. He may leave it all to charity.

 

[eytonxav]

Sounds like a very large estate, so it might take some time to settle. Be patient and in the mean time prioritize your needs.

 

[Mdlerth]

Once again, celebrities show us the way

Marry a stripper. Lease a Maserati. Hold parties for 200 featuring caviar and nose candy. Don't forget the golden clock necklace!

Your money problem will solve itself in no time.

 

[GalaxyBoy]

Allow more time than you think for the check to show up in the mail, as others have said above. My locality doesn't allow any estate to close for a minimum of one year, giving time for the liabilities to come out of the woodwork, income taxes to be paid, claims from long-lost relatives to be made, etc.

 

[Spock]

The 250K is already spent:
"According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 in 2018 may need approximately $280,000 saved (after tax) to cover health care expenses in retirement."


You're single, so it'll cost less.. but you're 58 and not 65 and I assume the kids are still on your insurance while in school, so it has to last longer.

 

[Sunset]

I agree with all that say tell NOBODY. Google broke lottery winners and see what can happen. Some are bankrupt, some have been murdered, etc,
BUT by coming here you are ahead of the game.
Nobody in our +55 park has a clue as to how much we have, until the 2 new cars appeared in the driveway. I just casually mentioned car payments, but did not say we were making them.

+1
No need to blab about possibilities as that will only attract bad greedy people.

OP - you haven't got the $$ yet, I thought I would get an inheritance 3x, and all 3 times it was Zero. People die with very old Wills, or no Will, or "no Will is found".

So don't count your chickens before they hatch !

 

[footenote]

+1 Sunset:
"OP - you haven't got the $$ yet, I thought I would get an inheritance 3x, and all 3 times it was Zero. People die with very old Wills, or no Will, or "no Will is found".

So don't count your chickens before they hatch !"

I anticipated a $300k inheritance seven years ago. Dad decided to leave bulk of his estate (~$600k) to his 2nd wife of six years. As one of my friends said, "Nice return for just six years of effort!"

(He was evidently too lazy or too incoherent toward the end to re-title the EE bonds. So at least I had that goin for me which is nice.)

 

[ERD50]

I do not know my share yet. I am being a pessimist to not go crazy.

What is your basis for thinking you are being pessimistic?

I've not seen nieces nephews included in many wills.
Did your Uncle not have any other family? Was he close to you?

Like Dawg52 said - He may leave it all to charity. Like other's said - don't count those chickens.

-ERD50

 

[USGrant1962]

AFIK, the estate pays the inheritance tax, not the heirs.

Generally, the estate pays estate tax and the heirs pay inheritance tax in their state. They are not the same thing. See https://taxfoundation.org/state-estate-inheritance-tax/

 

[Retch The Grate]

I inherited roughly that amount when my grandfather passed. I DCAed it into my investment account over a couple years, though I should have just invested it all at once based on the numbers (in general getting it invested sooner has better returns). It's a meaningful contribution to hitting my retirement targets.

 

[RunningBum]

The 250K is already spent:
"According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 in 2018 may need approximately $280,000 saved (after tax) to cover health care expenses in retirement."


You're single, so it'll cost less.. but you're 58 and not 65 and I assume the kids are still on your insurance while in school, so it has to last longer.

You mean if he wasn't getting the inheritance he wouldn't be able to pay for any health care in retirement Omigosh, that's such poor planning! Lucky he's getting the inheritance!

sarcasm.

 

[ponyboy]

Am I the only one who doesnt think $250,000 is that much? I mean...its a lot...but its not life changing imo. Would get me to retirement much quicker though!

 

[USGrant1962]

Am I the only one who doesnt think $250,000 is that much? I mean...its a lot...but its not life changing imo. Would get me to retirement much quicker though!

$10K/year under the 4% rule, very helpful but not life changing unless you are heading toward SS-only retirement. But I think OP implied it could be more than $250K.

 

[HI Bill]

Am I the only one who doesnt think $250,000 is that much? I mean...its a lot...but its not life changing imo. Would get me to retirement much quicker though!

It's all relative. For most here who are FI and FIRE, it may be less than 10% of their invested assets. For those starting out, it's a lot. I lost more than that in the markets last year, and it hurt a bit, although it's a paper loss.

 

[Offgrid Organic Farmer]

When I was serving on Active Duty, we bought an apartment complex at each duty station. That was our investment portfolio. We learned a lot, and it made us a huge amount of money.

When I retired from the US Navy, we rolled that portfolio over to buy our farm.

Fifteen years later we inherited some cash. So we bought another rental building. The remodeling is nearing completion, from a $400k investment outlay we will get pocketing around $50k/year [minus all operating expenses].

 

[socca]

I agree with the other people who suggest pretending that you are going to receive $0 until the inheritance (if any) is deposited in your bank account.

A couple of my step-brothers never bothered to earn a living, expecting a large inheritance that never arrived - ouch! They don't get along with the other step-brother who received the big payout - ouch!

 

[ncbill]

The 250K is already spent:
"According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 in 2018 may need approximately $280,000 saved (after tax) to cover health care expenses in retirement."

You're single, so it'll cost less.. but you're 58 and not 65 and I assume the kids are still on your insurance while in school, so it has to last longer.

Hmmm...I think my relative spent closer to $2,800, including Part B & Plan G premiums.

They never were sick or had other medical problems, but were laid off around age 60, & because of finances delayed signing up for Medicare Part B for almost a decade (enrolled just last year) & only after they started having back pain too severe to ignore.

Multiple doctor visits over the summer, ending up scheduled for surgery last fall where unfortunately, terminal cancer was found, so then onto Hospice, dying earlier this month.

 

[Gumby]

I agree with the other people who suggest pretending that you are going to receive $0 until the inheritance (if any) is deposited in your bank account.

A couple of my step-brothers never bothered to earn a living, expecting a large inheritance that never arrived - ouch! They don't get along with the other step-brother who received the big payout - ouch!

If I recall correctly, The Millionaire Next Door had some strong words about those who include the expectation of an inheritance in their net worth.

 

[MarieIG]

It's all relative. For most here who are FI and FIRE, it may be less than 10% of their invested assets. For those starting out, it's a lot. I lost more than that in the markets last year, and it hurt a bit, although it's a paper loss.

Agreed.

 

[target2019]

Longtime Lurker. First Time Poster.

About me.
58 Years old widower, laid off a few years ago. Semi-retired have not started to take Pension yet. Basically living on savings and short term contract work. House is paid for no debts. 401k and IRAs total over a mil. Savings of $500k. Two daughters college accounts of $150k a piece might not be enough, might have to supplement a bit depending on a schools.

My actually rich Uncle passed. I was expecting to get something eventually maybe enough for a new car someday. But it seems I am getting something more than that. His net worth was something north of $10 mil maybe as high as $20 mill. So $250,000 is the bare minimum of what I will get. So I ponder other than a few cars since mine are 15 and 20 years old (nothing extravagant) what would you all do?

I do not know my share yet. I am being a pessimist to not go crazy.

Three IOI for you.
1) At first, concentrate on investments left to you in taxable accounts. The cost basis will be stepped up (or down), and therefore this is best source of cash, since no or little gain.
2) If there are tax-efficient, low cost funds, stocks, etc., then consider holding on, as part of your overall asset allocation.
3) Institutions which hold the investments are not your friend. They can be a poor source of information. You would do well to triple-check everything that is sold (I meant told) to you.

 

[Lewis Clark]

Am I the only one who doesnt think $250,000 is that much? I mean...its a lot...but its not life changing imo. Would get me to retirement much quicker though!

Looking at some of the other threads on this forum regarding the poor state of personal finance in this country, and reading published news articles, I suspect that $250,000 is life-changing money for lots of folks in our country.

It probably is not life-changing money for many of the people who frequent these discussions.

 

[Lewis Clark]

If I recall correctly, The Millionaire Next Door had some strong words about those who include the expectation of an inheritance in their net worth.

You do recall correctly. : )

TMND stated that their research shows that people who sit around waiting for inheritances or other handouts (referred to as economic outpatient care) generally accumulate less in net worth, compared to the people who are fully engaged and productive work usually end up with higher levels of net worth.

 

[MrLoco]

Book the next flight to Vegas. Visit the Westgate Sportsbook.


Put the entire $250,000 on the money line...NE PAtriots to win the Superbowl.



Go home a winner!

 

[meleana]

You have to wait to see in what form you are getting this money, If it is in an IRA- you need to transfer it as an inherited IRA in your name and then take RMDs every year as required. You will get creamed on taxes in you don't.


You really need to take a step back and go through the process to see what the atty's say.