Inheritance- what to do with it?

[Lostintheforesttoday]

Hi all. Posting here for traffic. I’ve just inherited some money from my parents - around £190,000 after taxes/ expenses. Please don’t tell me I’m lucky as I’m still really traumatised and devastated by my Mums fairly recent death (suicide) and I’d swap any amount of money to have her back, in a heartbeat.

But I can’t, so here I am, someone who has never had a pot to piss in before with that money and no fucking clue what to do with it. I have a house already that I don’t want to move from or change. I have some student debt I want to pay off, ( my own and my two eldest children’s) - around £20,000 total, plus I want to put some away so my youngest 2 DC (11 and 12) can go to Uni if they want.

Other than that I have no clue what to do with it. I’m currently Re-training for an NHS career but on a year off due to health issues. When there I lived on an NHS bursary and wages from my part time jobs. During the year off Uni I was living on my wages topped up by tax credits (that have now stopped).

I’m 41 but have no pension so am aware I need to do something about that. I know I should get some financial advice but find it very difficult to trust people tbh. I also have quite a history of MH problems (BPD and PTSD) and can be quite impulsive and not always very rational, and I’m scared I’m somehow going to blow it all on sod all or lose it all by making bad decisions. That really scares me as my Parents worked hard for that money and I’d feel like I was letting them down.

Does anyone have any words of wisdom or advice to offer. I feel completely out of my depth, and also that I don’t deserve it as I haven’t worked for it. I’m also worried that my ex husband will make a claim for some of it - we’ve been separated since 2008 due to his violence but are still not officially divorced as I could never afford it. I know my Mum hated him for what he did to us, and that she wanted to change her will in case something happened to me and he got my share (though she never got around to it).

Apologies for any spelling/ grammar errors - I’m on a very small and very crap phone!

Investing in a portfolio of funds/shares/bonds via a platform such as Hargreaves Lansdown (although they are very costly in relative terms - look at AJ Bell or BestInvest - they are equally good and cheaper) is sensible it requires a degree of financial literacy. You need to be able to get your head around all the terms and what have you.

People will tell you to get an independent financial advisor as though it is a panacea but of course most independent financial advisors cost a lot of money and are not very financially literate at the bottom end IME. It's better at the top end but still the qualifications are not so great and they tend to be salesy types rather than types who will fairly and impartially tell you how to invest. IFAs are generally not as well regulated as they should be IME If you are going to invest in funds/bonds/shares please do this via an shares ISA wrapper. You can only put so much a year (I think around 20k) but do that a bit at a time. The income is then tax free.

If I were you OP, I'd buy a little property and rent it out. You will get the capital appreciation from the property and a reasonable income to help you out. Also the good thing about property investment is that you probably understand about properties more than you do about finance. You know how to look after a property and a decent lettings agency will vet your tenants and not take too much of a rake.

For a novice investor I do think property is easier than financial investments. FWIW I have both. Please ignore whoever told you to buy premium bonds - that's just daft.

The real questions is stocks and shares vs property. A financial advisor can do the sums to see which would give the best return short term and long term.

Don’t put your money in any internet company you’ve never heard of, and stocks and shares are ONLY a good idea, if you are prepared to lose money.
Find something safer.
There are too many scams these days.

Sorry for your loss.

For now, I would put as much as you can (looks like £20,000 from a quick google) in an ISA with a lock-in period, and then split most of the rest between two savings accounts with different banks (i.e. different banking groups, as the government cover bank bailouts up to £85,000), again in accounts with e.g 60 day access to overcome your fears about acting impulsively).

Keep maybe £10, 000 in an accessible account so that you feel you have a cushion for unexpected emergencies.

You really, really need some professional legal and financial advice about the situation with your husband, given that you are not yet divorced.

Shockingly Thesearepearls advice, might be right. Invest in a house to rent out, but find a management company who will take the stress out of it, for a small fee.

Dear OP,
I am so sorry that your mother died.
You are in shock at the moment. Please do not make any decisions for a few months. Put any money into a separate account and forget about it, until you have got over your initial shock and grief.

Definitely see an independent financial adviser. I’d only go down the Hargreaves lansdown route if you felt confident in making investment decisions and are familiar with your options.

These things can obviously be learned but I think for now given your distress you would be best off getting proper advice. As you have no pension and are in your 40s with no pension I would say even this sum isn’t a huge amount realistically long-term and so planning for retirement and making sure you get some inflation protection so that the sum does not diminish in the future needs to come first. A good IFA will help you. Best of luck.

Sorry for your loss. First thing I would do is get divorced now that you can afford it. As far as I’m aware he’s not entitled to an inheritance so many years after separating, I had to research this recently for a friend.

I would buy a house and let it out with the remainder of the money. If you can’t afford in your area buy elsewhere where it’s cheaper. You can get an agent to manage it. You would have a regular income from it. You would have to pay tax on it though if you exceed your allowance.

sorry for your loss.

I'd donate a chunk to a suicide charity.

And invest the rest in property, it will really help you when you retire.

You'll have better financial advice than I can offer, but I'm very sorry for your loss.

For me it would be divorce the ex and make sure he has no claim on this money.

Seek IFA with a view to sorting out your pension.

Even £200k is nothing much in a pension pot these days.

gratuitously bitchy and no good at reading.

I beg your pardon?

What could possibly more bitchy and screwed up than your post?

I'm not particularly good at typing hence the missing zero.

HL are very expensive and they may well have a minimum investment sum. At OP's level the fees may not be cost-effective.

That needs to be considered.

So sorry for your loss. My DH's father committed suicide and so I know just how difficult that kind of bereavement can be.

I'm an IFA - getting your marital status sorted should be first priority.

Then find an IFA who can provide you with some good testimonials (preferably ones where you can actually speak to the clients who have provided the testimonials!) via Unbiased or Vouched For websites.

Anyone good will not be cheap, but will be worthwhile. Also a good IFA would recommend that you have a friend or relative that you trust with you at any meetings. You are recently bereaved and with your previous MH difficulties, you should feel under no pressure to do ANYTHING with the money just yet, apart from the divorce.

Also, accountants can advise you on tax, solicitors on the legal side of things but they're NOT (with a few exceptions, who have dual authorisation) financial advisers.

I wish you all the very best OP. It can be surprisingly disconcerting to have to deal with funds which have appeared as a result of such a tragic loss. It can be really tough. I hope you find a way of dealing with your finances which honours your mother and goes some way, in time, to help you come to terms with your loss.

Also, most importantly, please make a will ASAP to leave to your DC, please get legal advice on this, but if anything happens to you before you do, the money would go to your STBXH until the divorce happens.

I'm so sorry about your Mum OP x

OP. May your beautiful mum rest in peace.

I agree with those saying do nothing for a few months. Put the money in an account you can't access easily and focus on processing the kiss of your mum.

Advice would be a good idea when you are ready. I would focus on setting up a pension and put all the money in that other than a rainy day fund but that's based on the info you have provided.

And yes you need to get divorced, but in the meantime write a will that excludes your ex and leaves everything to your children.

DO NOT tell anyone about the money, not even your kids or it will get back to your ex somehow and he will want it.

Ask him to sign divorce papers, say you can do a diy one, 10 years is quite long enough.

So sorry for your loss OP.

Does your husband know about this? You need to ensure he does not find out and divorce him as quickly as you can. Depending on his personal circumstances, it isn't impossible he could make a claim on the inheritance as a marital asset.

So I would keep very quiet about it and take your time making a decision until after the divorce is finalised.

thesearepearls
So glad to see that you have such extensive experience of IFAs that you - with no qualifications or authorisation - feel entitled to give a complete stranger, whose circumstances you have almost no knowledge of, detailed financial advice.
How irresponsible.

I think because you have been separated for ten years you can divorce the ex without giving cause. I don't think he is entitled to anything but I would check with your solicitor first. But definitely sort out your marital status out as a priority. Where to put the money can be a decision you can make later.

Shambu - I dont understand your comment on HL?

DH and I have been investing with them for many years, we started ISAs for the kids a few years ago, putting less than the Junior ISA max in until they got a recent inheritance. DD has only just turned 18, and her allowance increased, thus she 'only' has about 25k in her ISA.

HL accept payments into their ISAs from £50/month, so not sure why they 'wouldn't bother' with 200k!

Op, as others have said, get divorced, dont pay off your kids debt (even yours is debatable - my DS is taking on student loan despite having an inheritence) and then think about what you want.

A Stocks and shares ISA would give you similar benefits to a pension, you wouldn't get the govt 25% tax advantage, but you can access an ISA any time.

HL are good, but not cheap, there are other online stock brokers that I think are cheaper, others maybe can advise.

In terms of an IFA, well we have never bothered, after some crap advise re my pension years ago. We have found that if you drip feed money into a S&S ISA monthly (so 20k/12 per month) and into a mix of funds (eg a Uk fund, a European, a worldwide or maybe US fund), then you will generally 'smooth out' the ups and downs of the stock market over time and over different markets.

Don't pay your childen's student loan debt - if you want them to benefit, paying an equivalent amount that they can use as a house deposit may be a better use of the money. As to your own debt, whether to pay that off depends on when you incurred it and what regime it was under. Repayments are based on earned income, not inheritances (although it would include rental income if you followed the buying property idea) - consider how near you are to the write-off date, and how much of the debt would be written off if you were not to make any extra payments.

One thing I did mean to say, is don't make any decisions hastily. You are still grieving and somewhat in shock. Take your time. Leave yourself space to make the financial decisions calmly and quietly. Don't make a quick and easy decision now.

Please do take care if you consult an IFA. I said this downthread but having consulted around 5 in my time I found their advice to be unimpressive and largely uninformed. The qualifications needed to become an IFA are not difficult. If you do go down the route of taking advice from an IFA be very clear about whether or not they are going to get a commission from the products they are selling you. They need to disclose this but do be aware that some of them (largely the ones offering free advice) are operating on commission. As I say the top end is very good - wealth managers can be very good - but these are dealing with very significant portfolios. At the bottom end you need to take very great care.

Use National Savings to avoid the £85k compensation limit, get legal advice re ex. Don’t consider trusts at this moment as they be irreversible. Also your children may access any trust money at 18 and would they give to ex? Get the ex sorted first.
Both vouchedfor and unbiased websites are not as ethical as they seem as advisers pay for enhanced listings. Look arbour adviserbook.co.uk or the pfs website.