November 2011 Client Profile

Yvonne just received a seven-figure inheritance from her late aunt's estate. The inheritance is the largest sum of money she has ever handled, and she wants to make sure she has a plan.

Yvonne is wise to be cautious. She doesn't want to give in to the urge to spend and shrink her inheritance down to nothing. A little planning will go a long way toward helping her make the most of her money.

In many cases, receiving a large sum of money carries a "price tag" in terms of taxes. Although income taxes generally aren't due on inheritances, there are exceptions (e.g., for withdrawals from an inherited IRA). So the first thing Yvonne should do is find out what the tax consequences will be. Her next priority should be putting together a sound, long-term strategy for investing and spending.

Temporarily, Yvonne may want to put the money in short-term investments, such as certificates of deposit or a money market fund. She will then have time to evaluate her goals and set priorities without having to worry about the investment markets.

Since her personal wealth has increased substantially, Yvonne will also want to review her estate plan. She may have opportunities for controlling estate taxes, and she'll want to make appropriate provisions for her family.

Receiving a large sum of money can be thrilling -- and overwhelming. Having a plan for handling the money can help ensure that wise financial decisions are made.

_{Client Profile is based on a hypothetical situation. The solutions we discuss may or may not be appropriate for you.}