Planning on getting an inheritance? Be careful what you wish for in a will. Financial advisors know the danger of sudden money. Studies show that people spend "windfalls" twice as fast as earned money. Lottery winners go bankrupt at twice the rate of the overall population.
Inheritors are no exception. Studies have shown that 70% of wealth disappears in the second generation, 90% in the third. A recent survey by Interest.com says a sizeable portion will use it for luxury items, travel and housing upgrades -- and fewer than half (42%) plan it for long-term investing.
The recent recession has made people pessimistic that they'll even get an inheritance -- only one in four people expect one. That's too pessimistic says Boston College Center for Retirement Research, which says two-thirds of Americans will get some of the $6 trillion to $8 trillion expected to change hands the next two decades.
If you are lucky enough to inherit, give yourself a break. Hold off on any big spending plans, quitting your job, or other major moves. Think of how the legacy you've landed can become a gift that keeps giving. Handled wisely, it can help create the kind of financial well-being that lasts a lifetime.
Here are the five steps to take when you get that inheritance, or any kind of windfall: