One of the first things that may come to mind if you receive a large sum of money from a relative or a friend is to treat yourself! You might spend big on a new car, book a luxurious holiday, or purchase that extravagant gift you have always dreamed about.
However, a more cost effective and forward-thinking way to deal with your inheritance is to assess your financial situation and use the money to put yourself into the best financial position possible.
It is wise to firstly pay-off your debts. You could use the remainder in property or shares to produce a steady stream of income for yourself. Alternatively, you could make voluntary contributions to your superannuation to set yourself up for retirement. This means personally contributing a certain sum of money from your income to your superannuation account, in addition to employer contributions. Voluntary contributions to superannuation can also be a tax effective way of saving for retirement. The rules and policies of different superannuation funds govern how voluntary contributions work, so it is important to understand what your policy is an what your fund has to offer.
At Frank Law we are forward thinking and promote order for the future and therefore seek to inform and equip you with information to boost your future.
If you have any questions about inheritances, contact Frank Law's Wills and Estate team at www.franklaw.com.au/contact-us