Receiving an inheritance can be both emotional and financially significant. While it may create new opportunities, taking time before making major decisions can help you make the most of what you've received. Financial planning guidance in Australia commonly recommends understanding the assets involved, considering tax implications, and seeking professional advice before acting.
First Steps to Take
Before making any big financial decisions:
Take time to process and avoid rushing into purchases or investments.
Understand exactly what you've inherited, whether it's cash, property, shares, or superannuation.
Review any potential tax implications before selling inherited assets.
Consider how the inheritance fits into your long-term financial goals.
Strengthen Your Financial Position
An inheritance can be an opportunity to improve your financial wellbeing by:
Paying off high-interest debt.
Building or topping up an emergency fund.
Reviewing your insurance needs.
Updating your Will and estate planning documents.
What About Tax?
Australia doesn't have an inheritance tax. However, Capital Gains Tax (CGT) may apply if you later sell inherited assets such as property or shares, and some superannuation death benefits can have tax implications. Professional advice can help you understand your obligations.
Should You Invest It?
Many people use an inheritance to help fund long-term goals, such as retirement, education, or wealth creation. The right strategy depends on your personal circumstances, financial goals, and risk tolerance.
Common Mistakes to Avoid
Making decisions too quickly
Large impulse purchases
Ignoring potential tax consequences
Failing to update estate planning documents
Investing without a clear strategy
How Gardian Financial Planning Can Help
Receiving an inheritance often involves important financial, investment, and estate planning decisions. At Gardian Financial Planning, we can help you understand your options, develop a strategy that aligns with your goals, and make informed decisions that support your long-term financial future.
Key Takeaway
An inheritance can be a powerful opportunity to strengthen your financial future. By taking your time, understanding your options, and seeking professional advice, you can make decisions that honour both your loved one's legacy and your own financial goals.
