Getting the most out of a lump sum inheritance



Getting the most out of a lump sum inheritance

A lump sum inheritance in the form of money, property or other forms of assets can have a profound effect on your financial circumstances.


At what is a difficult time emotionally, it’s often hard to know exactly what to do with your newfound windfall. Pay off the mortgage, buy a house, take a holiday, top up your super – the options can be overwhelming.


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In formulating your plan of what to, it makes sense to take stock of your finances and work out exactly what your short to long-term financial goals are.


Seeking the advice of a financial planner can help do just that by developing an investment strategy to help achieve your long-term investment goals and also avoid the tax pitfalls a lump sum can create.


Cameron Morcher, Private Client Adviser from Prime said:


‘A sudden change in your financial situation can mean a change in your income position, assets and even your lifestyle.’


The best advice when someone receives an inheritance is don’t act rashly and take the time to develop an investment plan with an expert.


‘Consider your investment strategies based on the timeline of the investment. Different investment vehicles carry varying degrees of risk and volatility which determines the overall liquidity of the investment.’


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Investment Advice: What is it? from Prime Financial Group on Vimeo.


Cameron Morcher from Prime said while there is no inheritance tax in Australia (death duties were abolished in 1979) there are situations where certain acquired assets be subject to capital gains tax when they are sold.


“To avoid any unwanted calls from the ATO, people should consult with their accountant to get the full picture of potential tax issues.”


Cameron’s top five tips on inheritance planning are:


  • Establish an investment plan
  • Consider reducing debt
  • Contribute to your super fund to help with retirement
  • Get advice from an accountant regarding tax implications
  • Consider updating your will


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This information has been prepared by Primestock Securities Limited ABN 67 089 676 068, AFSL 239180 (“Prime”). Prime accepts no obligation to correct or update the information or opinions in it. This information does not take into account your objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate to your situation. It is recommended that you obtain financial, legal and taxation advice before making any financial investment decision. Prime is bound by the Australian Privacy Principles for the handling of personal information.


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About the Author:

I enjoy helping clients make smart financial decisions so they can lead the life and lifestyle they desire, now and in the future. Understanding individual needs is fundamental to my approach in providing personalised advice, and with that in mind, my goal is to ensure we have the right structures and strategies in place so clients of Prime are positioned to build wealth and have their accumulated assets protected.