Worried About A Windfall?

 

By Jon Flynn

 

Most of us dream of being in a situation where we find ourselves as the sudden recipient of a large lump sum, that surely will take away all of our “worries”.  The source of this “windfall” can be from a variety of places like an inheritance from a loved one, a distribution from an employer retirement plan, lottery winnings, the sale of mineral rights, the sale of property, land, or even a family business.  Whatever the source of the funds, contrary to what many of us might expect, I find that the “worries” for these “would be fortunate folks ” often grows rather than wanes.

 

But how can this be the case? 

 

First – Sudden wealth can have a way of bringing out the worst in not only us, but in our family and friends as well.  Pride, greed, envy - you can pretty much rattle off the entire list of the Seven Deadly Sins. They all are in play here.  Sure, too much money can get you into a lot of trouble and cause you do some pretty stupid things.  But, whether you act out poorly or not, you can be sure that some family and friends will still scrutinize everything thing that you do or say going forward out of just plain old jealousy.  This can create feelings of immense guilt in you.  As a result, don’t be surprised if your long-standing understanding of your own identity feels threatened, so it’s important here to try and keep perspective.  Remember that your financial situation doesn’t define you as a person. Even if out of jealousy other people may attempt to put you in a box.

 

Secondly - What the heck do we do with this money?  This is a question often asked and would seemingly have an easy answer,  “spend it”, of course.  That’s only party true.  Spending is the easy part.  The hard part is learning how to protect it and make it last.  Unfortunately, to protect it for the future and provide a real lasting sense of financial security, you’ll need to do some thoughtful planning.  Here are some questions that may possibly keep you up at night:  How do we invest it?  What charities should we share it with?  How will the money be taxed when you first receive it as well as after it has been invested?  How do we thoughtfully pass it to loved ones after we die?

 

Everybody situation is different and arriving at solutions can get complicated.  My advice is always to take your time, let the money “cool off” while you gather all the information you need to make informed choices.   Second, lean on professionals like accountants, lawyers, and financial planners that only come highly recommended by trusted sources.

 

 

Jon Flynn is a Certified Financial Planner ^TM and owner of Flynn Financial in Eynon. He is a Representative of Securities America, Inc., Member FINRA/SIPC and of Securities America Advisors, Inc. Flynn Financial and Securities America are unaffiliated.   Mr. Flynn can be reached at 570-876-5015.