It can be an exciting time to come into a large amount of wealth. Perhaps you’ve won a competition. Maybe a long-lost grandparent you never knew about has passed away, and you’ve been left a large fortune. You may have an antique possession you never knew was worth so much, or maybe you’ve just inherited it from a wealthy friend.
Whatever the reason, while the initial thoughts are of excitement, having a large amount of wealth transferred to you doesn’t come without its pitfalls. With this in mind, today we’re going to explore four of the most common pitfalls with receiving wealth, as well as detailing how to overcome them.
1 – No Will or Legal Agreement
If someone close to you passes away, you may believe that you’ve got a sum of wealth heading in your direction. However, things can get complicated if it turns out someone didn’t have a will or legal agreement written up to state what they were planning to do with their remaining assets.
In many cases, these situations will need to be handled by the courts, and the assets will be distributed by someone in the legal system, which of course needs to be paid for.
2 – Debts to Be Paid
Even though you may be inheriting wealth, it’s entirely possible that you can also inherit debt. Sometimes, you may inherit more debt than wealth, which means you need to pay out to clear the debts.
In most cases, the debts will be paid for first, and then you’ll receive any wealth left over. However, this is not always the case; you’ll need to be mindful of what’s going on and how the money is being spent.
You don’t want to spend all your inheritance early just to find out you now owe a lot of money to creditors.
3 – Greed and Lack of Communication
One of the most common problems we notice during the transfer of wealth is the fact that many family members may start getting greedy and want more money, especially in the case where a family member has died.
However, not only does this cause problems within itself but it also generally creates a lack of communication. Over time, this can cause substantial legal issues, and the process to get the money claimed can take many years to resolve. Legal advice is essential in this situation.
4 – A Lack of Preparation
Similar to the points above, but worth in its own right, you need to make sure you’re as prepared as possible. Of course, this is case specific, but some paperwork may have deadlines in which it needs to be filed. You need to be prepared to meet these deadlines.
This also means you know where important documents are held and how to access them. You also know what kind of actions need to be taken according the person’s wishes. Even if you’re receiving wealth from someone who is still alive, it’s important to be legally prepared to accept it.
Summary
As you can see, there are lots of things to think about when it comes to receiving wealth. Most of the problems to come up will be individual to that case, but it’s important to make sure you’re mindful and as organized as possible to have the smoothest experience.
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