Large Sum of Money KEY STEPS (won lotto, inheritance, business sale)
WoW! You've won lotto, received a large inheritance or sold a business and received a large sum of money... Check out this step-by-step guide on what to do with your millions of dollars.
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The steps are the same for if the large windfall was because you won lotto, sold a business, received a large amount of inheritance. In fact, even if you didn't have a windfall, but you still have a large amount of money, you too should consider these steps.
Firstly, there is a range of things you shouldn't do when you get a large sum of money. This includes: quitting your job after winning lotto, telling a lot of people about your large inheritance, taking a terms payout, buying silly stuff or spending the lump sum you get from selling a business.
You should meet some key advisors which include a lawyer for estate planning, accountant for tax structuring and financial planner about your overall personal financial plan.
Don't let a day's interest go to waste, make sure you deposit the large lump sum into a high-interest savings account. This can be in your name, but it's only a temporary holding place.
Find an accountant and get them to step the correct tax structure from day one. This structure may change if the windfall is from the lotto, inheritance, business sale or other reason.
For large lump sums of money, estate planning becomes an important area. You need to consider a waterfall of the assets (if multiple people / generations disappear) because the large windfall is now a motivation for people to challenge your affairs.
Then you should look into term deposits and high-interest savings accounts. Make sure that you split the large lump sum of money / large windfall between a couple of different banks and staggered accounts types.
Compile a list of your previous year's spending, the assets you have and liabilities. Find out with your debts, which ones can be paid off without any early repayment charges AND the interest accrual stops on repayment of debt.
Once you have all these keys steps finalised, you're now in a position to consider what you should do to invest your large lump sum of money.