You’ve just inherited a lump sum or a property. Maybe both. That wave of emotion hits, and then come the questions. Should you pay down your mortgage? Invest it? Save it for the kids? For many people, the hardest part is knowing what to do first.
Here’s a guide that cuts through the noise and helps you make sense of it.
Get a plan in place before you spend a cent
One of the biggest traps after receiving an inheritance is jumping in too quickly. Big decisions made fast can lead to regret.
A financial plan helps you pause and assess:
- Do you have any high-interest debts to clear?
- Are there gaps in your retirement plan?
- Do you want to help your children, or protect assets from them?
- What kind of lifestyle do you want now, and later?
Your answers will shape everything that follows. It doesn’t have to be perfect, just clear enough to keep you from reacting impulsively.
Watch for hidden tax consequences
You might think an inheritance is tax-free. That’s only partly true. While there’s no direct inheritance tax in Australia, the moment you sell certain inherited assets or shift money around, things like capital gains tax or super contribution caps can come into play.
Before you move money, talk to someone who knows how to:
- Check for CGT implications on inherited property or shares
- Make use of concessional super contributions (without breaching limits)
- Weigh up the pros and cons of family or testamentary trusts
A business financial advisor or tax accountant can show you what’s worth keeping, what’s worth selling, and when to do it.
Don’t leave it sitting idle
Leaving a lump sum in your everyday account might feel safe, but over time inflation eats into it. On the other hand, chasing high returns without understanding the risk can backfire fast.
That’s where a smart investment strategy comes in. You don’t need to become a stock picker overnight. But you should have a plan that covers:
- A mix of investments so you’re not exposed to just one market
- Enough liquidity to give you breathing room
- Income options if you want the inheritance to support your living costs
A Perth financial advisor can help you find that balance between growing your wealth and protecting it.
Structure matters more than you think
You might not need a complex setup, but the right structure can protect your inheritance from claims, legal risks, or family conflict down the track.
Depending on your situation, that could include:
- Using a family trust to hold investments
- Rolling assets into a self-managed super fund (SMSF)
- Setting up a corporate investment vehicle
Good structure means control, clarity, and fewer surprises later. It’s about long-term protection, not just short-term efficiency.
Keep it local, keep it relevant
Financial advice is only useful if it fits the context you live in. Working with a financial planner in Perth gives you insight into WA-specific rules, markets, and opportunities, especially around property, super, and tax.
Knight is built for that. We provide integrated accounting and private wealth management services to individuals and families across Western Australia. Whether you’ve just received an inheritance, are planning for retirement, or want to build long-term financial security, we’ll help you take the next step at your pace, with the right information in hand.
Every step of the way
At Knight, we offer clear, personalised guidance through financial planning and wealth management services tailored to your world. Whether you need help now or down the track, we’re here when it matters. Call us now or send a message, and we’ll take it from there.