The concept of sudden wealth isn’t a new phenomenon, but it has become more prevalent than ever before in recent years.
One important point to note about sudden wealth, is without careful consideration, a large portion of the new income can be dwindled through spending, taxes and gifting.
Our Wills, Trusts and Probate Solicitors provide guidance below on how to manage sudden wealth and the key steps to take to protect your assets.
What Is Sudden Wealth?
It is essentially what it says on the tin, when a person comes into a sudden fortune, whether this be anticipated or not.
There are ever-increasing ways to come into large sums of money. A ‘traditional’ way of achieving this is from an inheritance, the sale of a business after years of hard work, or even through a lottery win.
However, the last decade has introduced new ways to make money, both short term and long term. There are those who have a specialised skillset, and have the potential to earn a top-rate salary. Or a young professional sportsmen who shot to fame suddenly bringing in circa £500,000 per year. A spot on a prime-time reality TV could also earn an individual an instant influencer status which can generate multiple brand deals. But what happens next?
Steps To Handle Sudden Wealth
1. Take a moment
The initial step to take is vital. That is to take a moment to reflect on where you are, and how you have come to be there. The world of wealth can be overwhelming to anyone, whether you’ve had a glimpse of this or not.
2. Put together a team of experts
Assembling the right team is fundamental to helping you navigate this new world. These experts will have the relevant knowledge and capabilities to assist in managing your new wealth.
For entrepreneurs who have always worked solo, you may have the initial urge to continue with this strategy; however, sometimes it must be accepted that you don’t know what you don’t know, and this is where the experts will step in.
The experts will work collaboratively and the advice they provide will be intertwined with one another’s. They will give critical guidance to assist you in making informed decisions about your new wealth.
Your team should comprise of, at the very least, a legal advisor, a financial advisor and an accountant, all of which have key roles to play.
3. Think about your goals
This includes both short-term and long-term goals. Where do you see yourself in one, five, or even fifty years, What steps do you take to get there?
Key questions to ask yourself include:
- What lifestyle do you want to lead?
- How much of an annual income do you need to live off?
- What capital do you view as essential?
- Do you have any specific investments you wish to make?
- What charities do you wish to support?
- What kind of legacy do you want to leave?
4. Create a long-term plan
Once you have found the right people to assist you and assess your goals, it’s time to put your plans into place.
Think about what you'd wish to happen with your wealth if something were to suddenly happen to you. Consider if there is anyone you wish to provide for in life, or once you have gone.
Critical documents such as Wills and Lasting Powers of Attorney can help put the fundamentals in place.
Our expert team of Wills, Trusts and Probate lawyers can also discuss other aspects of succession planning, such as trusts, and our family lawyers can assist with any pre and post-nuptial agreements.
Contact our Wills, Trusts and Probate Solicitors
If you want to look at making a Will, putting a Trust into place, or preparing a Power of Attorney, you should start the process now, and you can get in touch with Myerson's Wills, Trusts, and Probate team below.
A joined-up approach between lawyers, accountants, and financial advisors gives the best outcome for clients and they are happy to work with your current advisors or suggest advisors for you to use if you don't have any in place already.
01619414000
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