Inheritance and Financial Advice: What to Do When You Receive a Windfall
Receiving an inheritance is rarely just a financial event.
It’s emotional. Personal. Often unexpected.
And while it can create opportunity, it can also create uncertainty.
What should you do with it?
Pay off the mortgage? Invest it? Help the kids? Sit on it for now?
The truth is, an inheritance handled without a plan can disappear faster than people expect. But handled thoughtfully, it can create long-term security and flexibility for your family.
First: Slow Down
One of the most common mistakes after receiving an inheritance is making immediate decisions.
There is usually no need to rush.
Grief, family dynamics, and sudden responsibility can cloud judgement. A short period of reflection — even 3–6 months — can help ensure decisions are deliberate rather than reactive.
Unless there are urgent tax, debt, or estate issues, time is your ally.
Step One: Clarify What the Money Means
Before deciding where it should go, ask:
What stage of life am I in?
What does this money need to achieve?
What would honour the intent of the person who left it?
Does this change my retirement plans?
An inheritance isn’t just extra cash — it often shifts your entire financial trajectory.
Common Options (And When They Make Sense)
1. Paying Off Debt
2. Investing for Growth
3. Supporting Children or Family
4. Boosting Retirement Security
The Tax Question (NZ Context)
In New Zealand, there is currently no inheritance tax.
However, there may be tax considerations depending on:
The structure of inherited investments
Overseas assets
Trust distributions
Property with income implications
Good advice from a from professionals such as a tax specialist, ensures you understand what you’ve inherited — not just its value.
Why Financial Advice Matters After an Inheritance
Professional advice helps you:
Integrate the inheritance into your overall plan
Align decisions with long-term goals
Manage tax efficiency
Avoid emotional missteps
Create a structured strategy instead of a series of one-off decisions
It shifts the focus from “What should I do with this money?”
to
“What do I want this money to do for me?”
A Final Thought
An inheritance is often someone’s lifetime of work, sacrifice, and intention.
Handled thoughtfully, it can:
Strengthen your family’s future
Reduce stress
Create opportunity
Honour their legacy
Handled casually, it can quietly disappear.
The difference isn’t luck.
It’s planning.
Legaseed NZ Ltd (FSP1005404) holds a licence issued by the Financial Markets Authority and provides financial advice in relation to financial & retirement planning, investments, KiwiSaver and personal risk insurance. Our disclosure information can be found on our website www.legaseed.co.nz, or is available on request and free of charge.
