Ross Lacey, director and Independent Financial Adviser at Essex-based Fairview Financial Management, has offered simple advice for anyone inheriting money: you don't necessarily need to do anything immediately.
Speaking after the loss of his mother when he was 18 and his father later at the age of 60, Mr Lacey said bereavement had influenced how he dealt with clients in similar situations. A death in the family can leave people suddenly responsible for financial decisions at the moment they are least equipped to make them, with an estate to administer, investments to understand, pensions to trace and potentially a substantial inheritance arriving in a bank account.
Giving breathing space
Mr Lacey said people often feel a burden when they inherit money through sad circumstances. "They just want to do something with it and that's dangerous because they can make a decision that's going to be really bad in the future. Part of it is almost giving them breathing space to say, 'you're going to be okay. You've got time. Let's just park it here for now. Don't make any rash decisions'."
He believes people could feel under pressure to make an inheritance productive immediately, particularly if the money represents years of saving by a parent or other loved one. Instead, giving yourself time can allow the initial period of grief to pass before making decisions that could have consequences lasting decades.
Organising what is left behind
For some families, Mr Lacey said an adviser's role was therefore less about immediately recommending investments and more about helping organise what has been left behind. "It's quite common that the surviving spouse has no idea what the other one has got. They've got pensions here, investments there, bank accounts over there. We can almost act as that central point to help them understand what they've got, what needs doing and what doesn't need doing straight away."
Once somebody is ready to make longer-term decisions, Mr Lacey believes the starting point should not simply be asking where to invest an inheritance. Instead, families should consider what they want the money to achieve, which could mean improving retirement security, paying off borrowing, helping children, providing a financial safety net or allowing someone to enjoy experiences they had previously postponed.
Learning from personal loss
Mr Lacey's own family history has made the last point particularly important to him. His mother died aged 45, while his father died at 60 without experiencing the retirement he had spent years anticipating. Mr Lacey remembers hearing his parents discussing the things they would do "one day", only for that day never to arrive. "I grew up listening to my mum and dad talk about, 'one day we're going to do this. One day we're going to do that' and neither of them got to do that stuff. Part of our job, if we can show people as soon as possible what's available to them, is that they don't need to delay this. They can start doing things sooner rather than later."
His experience has also taught him the value of getting family finances organised before a death occurs. His parents had received financial advice and put appropriate insurance in place before his mother's illness, meaning she could stop working and his father could take time away from work, allowing the family to concentrate on her health. For families dealing with a death now, his central message is not to allow grief to create an artificial financial deadline. Mr Lacey added: "You have got time."
