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Did you recently add a second comma to your bank balance? Has a recent financial event raised your net worth to the next level? Here are ways to protect and manage your newfound wealth.
Estate Strategy on a New Playing Field
Reaching a new level of wealth may be an excellent time to revisit your estate strategy. More wealth can mean a larger estate and more complex estate issues. For example, it may be time to consider a living trust. You create a living trust while alive and fund it with the assets you choose to transfer therein. The trustee (typically you) has full power to manage these assets. But using a trust involves a complex set of tax rules and regulations. We can help.
Pace Yourself
Many newly wealthy individuals feel like they are in a rush once they have their money. Now that the world is your oyster, you may be better off waiting for the pearl. This means getting accustomed to your new bank balance before putting the money to any practical effect. A few conversations with one of our professionals regarding your ambitions may help put things into perspective.
What You Need Today
Your new wealth will create as many questions as it will opportunities. For example, if you’ve sold your business or are considering leaving your job, you will need to consider health insurance choices for yourself and your household. Other household demands may also warrant consideration, from travel costs to big one-time purchases. You will almost certainly face some unplanned expenses along the way, so be sure that your short-term budget makes an allowance for that.
Risk Tolerance and Time Horizon
Your risk tolerance will be affected in part by your ongoing day-to-day needs. For example, if you’re considering buying a new home, money may need to be earmarked for all expenses related to that purchase. The risk takes into account not only the home itself but also your overall strategy. The time horizon determines the lengths of time considered for your various expenditures. Some unexpected expenses may happen within a few months, while others can be put off for up to a year.
Congratulations on that second comma becoming a part of your everyday life. It will mean many exciting things for you and your household, some of which you’ve prepared for and others you might not have anticipated. We are in your corner and can provide answers to your questions along the way.
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