Receiving an inheritance can bring about a wealth of mixed emotions. On the one hand, it is a windfall that you have extra money you may not have expected, and on the other hand you are grieving because someone you knew and cared for has passed on.
It's important that you plan how you use your inheritance wisely. Below are some helpful ideas on how you may want to manage your inheritance money.

Evaluate how you will spend your inheritance
Before you begin spending your inheritance, take some time to grieve for your loss, then when the time is appropriate for you evaluate how you will spend it. Will you invest it? Will you donate it to charity? Will you use it to pay off debts? Will you splurge on something you've always wanted? Will you put the money toward your retirement?

Keep in mind that there may be tax implications from receiving an inheritance. Be sure to consult your qualified tax advisor for more information on how taxes may affect your inheritance.

Identify your short- and long-term goals

Make a list of both your short- and long-term goals, for example:

• Buy a house
• Pay for college
• Retire early
• Travel overseas

Then prioritize your goals according to what is most important to you. If you can, assign an estimated dollar amount you think it would take to achieve that goal.

Depending on the amount you've inherited, you may or may not be able to accomplish all of your goals with the money you've received. However, an investment professional can help you formulate a plan to get started toward your goals.

Protect yourself financially

• Emergency funds. One way in which you may want to prepare for unforeseen financial crises is to set aside a portion of your inheritance into an emergency savings account. Having a fund of this type can provide you with money you may need to pay for emergencies. You can save your money as cash, of you can invest it in low-risk, liquid investments such as a money market account or Treasury bill.
• Insurance. Protect yourself and your family with the appropriate insurance coverage for health, life, homeowner/renter's and auto.

Pay off debts
If you have any outstanding debts, such as credit cards (particularly high interest rate credit cards), student loan(s), car payment(s), etc. consider paying off or reducing some of that debt.

Invest for your future
You may have long-term financial goals you are striving to achieve such as a comfortable retirement, buying a vacation property, saving for a child's college education, etc. Regardless of what your long-term goals are, it's important to plan ahead. One way you can help realize your objectives is to invest a portion of your inheritance into an investment vehicle that will allow your funds to grow over time.
An investment professional can work one-on-one with you to help you identify your goals, assess your tolerance for risk, and select suitable investment products that can help you achieve those goals.

Give to charity
Have you thought about sharing your inheritance with one or more of your favorite charities? This may be a great way to reduce taxes. Consult with a qualified tax advisor for more information on how you can reduce taxes with charitable giving.

Save your money
We all know how tempting it can be to spend money on things you've always wanted—whether it's a trip overseas, a new car, a vacation home, etc.—but try not to let spontaneity get in the way of saving or investing your money for your future.

It's okay to indulge but be sure to evaluate and take care of your financial priorities first, and then decide what and how much of your money you will spend on other luxuries.

Ask for help
Deciding what to do with your inheritance can be a difficult process, but you don't have to go it alone. An investment professional can work one-on-one with you to identify your short- and long-term financial goals, then based on your unique situation help you decide how to best utilize the funds you've received.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore. For professional advice, contact a Certified Financial Advisor.