Posted on August 7, 2024 by Katherine Fox.

Do you need a financial advisor after getting an inheritance?

Most people don’t have any idea what to do after getting a large inheritance. 

You’ve received a life-changing amount of money, but nothing in your life has prepared you to manage a multi-million dollar fortune. 

On top of that, you may be grieving, dealing with family strife, and trying to navigate your way forward after a loved one’s death. 

You may have considered looking for a financial advisor to help, but you’re stuck with more questions than answers:

• What does financial planning look like after getting an inheritance?

• How could a financial advisor help me manage my inheritance?

• What questions should I ask an inheritance financial advisor? 

• How much does wealth management for my inheritance cost? 

• Will I need to make a long-term commitment if I’m looking for a financial advisor for my inheritance?

Luckily, you ended up here. 

Keep reading for the 5 ESSENTIAL questions you need to ask if you’re considering hiring an inheritance financial advisor. 

You’re closer than ever to finding answers to these questions and moving forward with a partner who can help you understand, manage, and grow your inheritance. 

I’m Katherine. I’m a CFP® and a financial advisor for inheritance.

I’m an inheritor myself and I’ve spent the better part of the last decade as an inheritance financial advisor, helping other inheritors manage their investments and their financial lives. 

I’ve got ALL the information and tips you need to make a plan and evaluate if a financial advisor is right for you after inheriting investments. 

I’m here to help you through this journey, whatever your needs are. 

If you’re trying to get up to speed, check out the 20 Terms Inheritors Need to Know or How to Talk to Your Parents About Their End-of-Life or Estate Plan. 

And if you’re deep in the weeds and don’t know what to do next, schedule a FREE consultation to see how I can help you build a plan to understand, manage, and grow your inherited wealth. 

1.lWhat does financial planning look like after getting an inheritance?

When I work with new inheritors, my initial focus is on helping them navigate the emotional and logistical issues created by their new wealth. 

Financial planning after an inheritance shouldn’t look one specific way. 

It should be based on your needs, hopes, worries, and dreams for the future. 

It might include:

Education about your new wealth.

It’s common to feel overwhelmed and insecure about your financial knowledge after getting an inheritance. With new inheritors, I focus on helping explain your different account types and inherited assets. Once you understand what you’ve inherited, the focus shifts to building your financial knowledge and empowering you to sit in the driver’s seat of your financial future. 

Tax planning for your inheritance. 

Most inheritors will receive a significant portion of their inheritance through pre-tax retirement accounts. If this applies to you, you have 10 years to fully empty that account. If you inherited a million dollar+ IRA or 401(k), these withdrawals (which are treated as taxable income) can present a tax headache. I can help you navigate these tax issues and build the most tax-efficient plan to withdraw assets from inherited IRAs during this 10-year period. 

Building a plan to reach your goals. 

Getting a multi-million dollar inheritance doesn’t mean you know what to do with that money. Most inheritors I work with struggle to understand exactly what lifestyle changes their inheritance can support. Can you buy a new house? Retire early? How much can you increase your spending? I can help you assign dollar values to your future goals and gain a clear understanding of exactly what your new wealth can support, both now and in the future. 

5 ESSENTIAL questions you need to ask before hiring an inheritance financial advisor

Understanding the answers to these questions will help you make the best long-term decision when evaluating inheritance financial advisors.

2. How can a financial advisor help me manage my inheritance?

Working with a financial advisor to help manage your inheritance should start with the financial planning process. 

At the same time, an advisor may also start helping you build a plan to manage and invest your inherited assets. 

Remember that a financial advisor for inheritance should not only be focused on investing your money.

Getting an inheritance is a major life event and, while you are likely grateful and appreciative, you may also be under a significant amount of financial stress and anxiety trying to navigate your path forward. 

When a financial advisor for inheritance helps you manage and invest your inheritance, the process should include the following steps:

Understanding your risk tolerance and investment horizon. 

An investment plan for your inheritance should be tailored to your short, medium, and long-term goals. Your advisor should have a clear understanding of your goals and be able to explain how your asset allocation works in line with those goals. 

Aligning your investments with your values. 

Your investment advisor for inheritance should be able to help you build a plan to create positive impact with your wealth and align your investments with your values. Whether you’re using ESG funds, custom direct indexing, or looking to invest in opportunities beyond Wall Street, your financial advisor for inheritance should support your vision and journey. 

Building your investment knowledge. 

Getting an inheritance means you are significantly wealthier on Day 2 than you were on Day 1. With this sudden change in financial position, it is essential to find an inheritance financial advisor who will help you grow your knowledge of, and confidence in, investing. If you prefer to take a hands-off approach, that’s fine. But if you want to start learning and growing your knowledge about how investing multi-million dollar portfolios works, your advisor should be there to support you in that journey. 

3. What questions should I ask an inheritance financial advisor?

The questions you need to ask an inheritance financial advisor are different than what you would be asking if you were looking for more general help. 

What are your qualifications and experience?

Look for a CERTIFIED FINANCIAL PLANNER™ and someone with experience working with inheritors in your specific situation. They should have at least 5+ years of experience working with inheritors and managing assets. 

Have you worked with inheritors before?

Many financial advisors think working with inheritors is as easy as investing their money. Please don’t work with someone like this! Look for a financial advisor who understands the many emotional, logistical, and practical issues inheritors face.

Do you offer different billing models for current and future inheritors?

If you know you’re going to inherit a multi-million dollar estate in the future, but you don’t have any wealth now, most advisors won’t even be willing to talk with you. Look for an investment advisor for inheritance like Sunnybranch Wealth that offers unique engagements for current AND future inheritors, regardless of available assets to manage. 

How do you support clients through the estate settlement process?

A financial advisor for inheritance should be able to provide guidance and support through the estate settlement process. They won’t be able to manage the process for you, but they should be able to connect you with professionals who can help and serve as a sounding board and resource when you have questions or don’t know what to do next. 

Are you a fiduciary, fee-only advisor? 

Please only work with a fiduciary, fee-only advisor. Whoever you work with to help manage your inheritance should be able to clearly explain their fees and how they bill. Avoid advisors who take commissions or can’t easily explain how they get paid. 

4. How much does wealth management for my inheritance cost?

The cost for wealth management for your inheritance could vary depending on the financial advisor for inheritance you select.

Generally, you will pay for wealth management for inheritance in one of three ways:

Assets Under Management (AUM) Billing

This is the primary way I bill Sunnybranch clients who have assets to manage. If an advisor offers AUM billing, they will charge a percentage fee of the assets they manage. This fee is generally billed quarterly and is auto-deducted from your investment accounts. This is the easiest way to pay a financial advisor from a logistical perspective. A standard AUM fee starts at 1% of assets under management and should decrease as the amount of wealth you have invested increases. 

Retainer billing

For future inheritors, or current inheritors who don’t have or don’t want to have their assets managed, I offer annual billing on a flat fee basis. Like AUM fees, this fee is billed quarterly. It can be paid by credit card or ACH. An advisor should be able to explain how they arrived at your annual fee and justify the services you will be receiving in exchange for that fee. 

Hourly Billing 

Some inheritors don’t know how much help they need. For future inheritors with one-off questions or current inheritors who aren’t ready to make a long-term commitment, I offer hourly billing. Many inheritance advisors don’t offer this option, but I have found it to be critically important, especially for people who need financial help with their inheritance in the early weeks and months after their loved one’s death. 

5. Will I need to make a long-term commitment if I’m looking for a financial advisor for inheritance?

No! 

Some inheritors may be ready to engage a financial advisor with hopes of a long-term relationship. 

A long-term relationship is NEVER a requirement, an investment advisory contract should always let you cancel the engagement with 30 days of written notice or less. 

Some inheritors can’t even think about signing that kind of agreement.

That’s totally OK. 

You’re grieving and overwhelmed.

You shouldn’t be forced into an ongoing agreement if that isn’t where your head is at. 

That’s why I offer hourly and retainer billing at Sunnybranch - to give my clients options about what works best for them as they navigate the grief and overwhelm that comes along with receiving a multi-million dollar inheritance. 

Let’s take the next step together

Understanding if you need to evaluate and hire a financial advisor after inheriting wealth is not easy. Inheritors can encounter a wide variety of different situations requiring knowledge and finesse to manage. If you need more help, you can download The 20 Inheritance Terms You Need to Know, or reach out to Katherine Fox, CFP® and CAP®, a fiduciary, fee-only financial planner to learn how Sunnybranch can help you build a plan to manage, grow, and protect your inherited investments.