Receiving an inheritance can be a strange thing. While you are still in mourning, you realize that someone close to you has entrusted you with their money or assets. And these are now your responsibility. Many people feel a complex mix of emotions—grateful, heartbroken, and overwhelmed all at once. Fortunately, working with a wealth planner can help you navigate this responsibility.

How To Optimize an Inheritance?

It’s quite common to not know what to do with inherited money. As a result, beneficiaries often freeze and do nothing with this sudden windfall of cash, electing to simply put it in a bank or an investment account and leave it alone. However, a lack of planning here could mean you’re missing out on major opportunities.

Before you decide to stash the cash and forget about it, consider these five tips to enhance an inheritance and potentially improve your quality of life.

1. Revise your financial plan with the help of a wealth planner

You built your financial life based on your pre-inheritance view of the world. This means you need to revisit that plan and see if it still makes sense. If you receive an inheritance, it’s possible that you can now retire earlier, take less risk, enhance your investments, and more.

If you haven’t already, it would be a prudent decision to speak with a financial advisor to see how this sudden influx could impact your overall financial plan.

2. Pay down debt with a smart strategy

One action people are typically comfortable taking is paying down debt—and for good reason. Debt is stressful and expensive (in the case of credit card debt), and paying it off can provide a sense of accomplishment. If it relieves stress and frees up cash flow, it could be the right decision for you.

As with all financial decisions, it’s important to discuss your choices with your partner and family members. Effective communication is important for weighing the opportunity costs of using the inheritance for one thing over another. When you’re ready, comprehensive financial planning services can help you identify the most efficient way to pay down debt, while accounting for taxes, timing, and more.

3. Strategically renovate your home

Compared to the past couple of decades, mortgage rates are relatively high right now. As a result, countless people have reconsidered moving. Instead, they’re thinking about how to add more equity to their home.

Using an inheritance to renovate your home can make a lot of financial sense. Your home could end up being your biggest retirement asset, so any improvements you make can make you feel more comfortable or provide more equity—or both.

Before committing to any big projects, you may want to consult with your real estate agent and discuss what would be the most productive projects to consider. After that, ask a financial advisor how to leverage this project as a smart component of your overall financial plan.

4. Improve your health

Witnessing a loved one pass can often lead to an inspirational phase in our lives of improving our own health. Maybe there were steps they could have taken that would’ve extended their life, and you’re now looking to take those steps yourself.

Your inheritance can help fund lifestyle changes, like exercise equipment, nutritionists, personal trainers, running coaches, physical therapists, and more. Perhaps you didn’t previously have the means to pay for these things before, but now you can.

5. Honor the deceased

Think about how the deceased would have wanted you to use the inheritance, or how they would have used it themselves. If there was a place they loved like a local park, a memorial plaque can honor your loved one while providing you with a space to remember them.

If there was a cause they championed, you can now support in their memory. In fact, charitable giving is a core part of retirement income planning, and there are a plethora of financial tools you can use to give to charitable causes while providing for yourself and your family down the road.

Make the Most of What’s Been Given to You

While it might not feel “right” to use the money you received from an inheritance, it was left to you for a reason. Take comfort in knowing the deceased thought enough of you to leave you something you would use and enjoy.

If you have any questions regarding how you can enhance your inheritance with the help of a wealth planner, consult an experienced financial advisor today.