Inheritance can come in several forms and can serve different purposes. Sometimes it can be a fun windfall when it comes from an elderly parent in the heir’s midlife. At this stage of life, careers and households are established, and the money can go towards vacation or maybe starting college funds for grandchildren. The possibilities are endless, but the important thing is that this money wasn’t “spent” before it was received. My children recently inherited some much-needed bill-paying money from their grandmother. While they would have been able to pay their bills without this surprise income, it was really appreciated and made their lives a bit easier.
When a spouse loses a partner, financial situations change. A double-income household becomes a single-income household. A retired couple may have depended upon both social security payments, and that dynamic changes when there’s only one social security payment, and virtually the same household expenses as before the loss of the other spouse. This can be very disruptive and necessitate changing living arrangements and/or tightening of budgets.
Another potential scenario is that a widow inherits her husband’s assets (business ownership, retirement accounts, savings, other investments, etc.) and/or insurance policy proceeds. Similar to a divorce settlement for a nonworking spouse, these assets may be necessary to last throughout the rest of her life. It becomes key to invest for the medium-term and long-term to preserve that wealth. At the same time, there needs to be enough liquidity and potentially another income stream so as not to deplete savings while paying for living expenses.
Global View has a long history of investing for a “margin of safety”. This means that we choose investments that aren’t as susceptible to market volatility while considering an investor’s unique situation and risk tolerance. (Please insert links to blogs on this topic.) Dividend payments can also serve as a significant passive income stream, and we have a history of picking winners in this category. Global View is also experienced in minimizing taxes through prudent investment choices.
We understand that there are numerous avenues for seemingly attaining the same goals, but there are many nuances that we’ve come to appreciate over the last two decades that can separate a solo ager from meeting their goals and from falling short. Your goals may be to leave some of your inheritance to your family or charity, or perhaps you need to provide for elder parents or dependent children. Whatever your unique situation is, we would be honored to have an opportunity to meet and discuss options with those who are evaluating their choices for investing their inheritances.