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Imagine If This Were You. . . .

May 31, 2017

Posted in How We Work

Over the years, we’ve had the privilege of guiding clients through all kinds of financial situations, both pleasant and difficult. No matter the course, our aim is to provide clients with thoughtful solutions that will help them move toward their ultimate goals.

We created the hypothetical case study below to highlight a common financial challenge individuals and families may encounter, and to show various ways we would address the issues.

Managing a surprise inheritance


A young couple with two small children, a single income, and a list of financial goals: student loans to pay off, replacing a car in poor condition, and wishing to make some home improvements. They receive an inheritance of $300,000 and wondered how they should allocate it among their multiple goals.


To start, we would 1) assess each type of inherited asset, 3) calculate how much they expected to receive net of taxes, 2) summarize relevant tax implications and 4) discuss the possibility of attaining their goals.

In this example, we’ll assume that half of the wife’s inheritance is in a retirement account worth over $150,000. Because she is young and has limited retirement assets, we would recommend that she transfer the retirement account to an Inherited IRA. This would ensure the ongoing deferral of taxes on any appreciation in the account and minimize the current tax impact.

From there, we would prioritize their current list of goals and work with them to determine how to best use their assets to meet both immediate and long-term goals.


Depending on a variety of factors, we would typically advise younger clients to set aside some portion of an inheritance toward an emergency fund and their retirement. In this scenario, we would also recommend the couple pay off student loans and credit cards, as this would improve their monthly cash flow. If there were funds left over we would set aside money to fund college savings, purchase a new car and update their home, but only after some debt was paid down. We would also recommend they acquire life insurance to protect the family.

Read about other possible situations you might face on our website. We respect client privacy. If you find yourself in a similar situation to one of the scenarios, we welcome the opportunity to put our problem solving skills to work on your behalf.



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