The DUFF TORNEY Team
Financial Planning with a Sudden Wealth Event
Common Life Events That Create Sudden Wealth
Sudden wealth can be both exhilarating and overwhelming. We can help you take control. We have helped clients who have experienced these situations and many others:
Large Inheritance
Inheriting wealth can bring mixed emotions, from grief to excitement. We help you honor your loved one’s legacy by creating a thoughtful financial plan that aligns with your goals and values.
Divorce
Splitting one life into two often brings financial uncertainty along with emotional stress. We provide clarity and stability for your own future by helping you navigate asset division during a time that can otherwise be both personally and financially disorienting.
Legal Settlement
Gaining sudden wealth this way can be a relief but also a challenge to manage wisely. We guide you through investment strategies and long-term planning to ensure your settlement supports your future needs.
Lottery Winnings
A thrilling and lucrative stroke of luck can quickly become overwhelming. We help you take control by creating a comprehensive plan to manage your newfound wealth responsibly and sustainably.
Services for Those Experiencing Sudden Wealth
Our advisors help with the specific planning considerations unique to someone experiencing sudden wealth, in addition to the general financial planning that applies to all clients:
Financial Planning
- Education on being a good steward of new wealth by understanding your needs versus wants, legacy goals, the power of financial independence, and more
- Understanding the lifestyle you can afford with the increase in wealth
- Financial planning for gifting to kids/family members
- Learning how to address requests for “help” from family and friends
- Maintaining privacy and security of your wealth
- Behavioral coaching for emotional concerns, such as anxiety, guilt, isolation, fear of running out, indecision of spending, spendthrift issues, etc.
- Assembling a coordinated team of professionals to address all financial planning topics throughout your lifetime, such as a financial planner, CPA, estate attorney, money psychologist, etc.
Cash Flow
- Understanding how the increase in wealth impacts expenses and qualifying programs tied to your income, such as student loans, Medicare, financial aid, etc.
- Planning for the tax implications surrounding your sudden increase in wealth and proactive planning for future tax savings and cash flow optimization
- Optimizing your cash flow and liquidity for significant purchases and maintaining an emergency fund
- Determining the expenses necessary versus expenses that can be delayed – determining which expenses are on your wish list and planning accordingly
- Performing an analysis to understand your spending today versus your desired spending in the future, routine check-ins to ensure spending is within your lifestyle goals, and reviewing credit cards if necessary
Debt Planning
- Debt management to categorize your obligations and create a plan to efficiently pay off bad debt and maintain good debt
- Analyzing your student loans to determine any necessary payoff plan, consolidation, refinancing, etc.
- Analyzing your existing mortgage to understanding if it is financially beneficial to retain
Insurance Planning
- Understanding if your need for insurance has changed with the sudden increase in wealth
- Analyzing your life, disability, property, and casualty insurances for adequate coverage and cost effectiveness
Estate Planning
- Understanding if your sudden increase in wealth creates a taxable estate and implementing estate minimization strategies for tax reduction
- Understanding your charitable giving goals and create a plan to gift efficiently using various vehicles, such as foundations, charitable trusts, donor advised funds, etc.
- Creating strategies for asset protection of your newly acquired assets from future credits and judgements
- Designing a plan to keep wealth in the family for the next generation(s) and educating the next generation to become good stewards of wealth
Tax Planning
- Understanding the control and timing of your wealth event and devising a plan to maintain liquidity for any tax consequences
- Proactive tax planning for future income and tax savings following your wealth event
Investment Planning
- Developing an investment plan for your sudden increase in wealth and understanding the categories of investment to include in the portfolio
- Maintaining tax efficiency with investments and distribution strategies
- Understanding needs for income and growth from your portfolio to maintain your desired lifestyle
Resources for Those Experiencing Sudden Wealth
First Steps After a Sudden Wealth Event
Stepping into sudden wealth can be both exciting and overwhelming. It brings so many possibilities along with so many questions to ask and decisions to make. You want to enjoy your new wealth, but you also want to sustain it and steward it well.
Handling Friends and Family after Sudden Wealth
Sudden wealth can change relationships. Navigating the financial, legal, and tax nuances is easy by comparison. There’s often a clear path forward – or at least a few objectively good options.
The Good and Bad About Sudden Wealth
Sudden wealth can lead families to feel overwhelmed by the decisions in front of them. What immediate financial actions do I need to take? Should I help family and friends – and, if so, how much? What legal structures do I need?
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