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!

I would concentrate on your own position re: divorce, debts and pension. Forget about your kids' students debts, the best present you can give them is not to be a financial burden on them when you can no longer work.

Why the heck is these are pearls getting a hard time!

She has every right to point this out.
It's nothing dissimilar too my own research findings. I'm sure there are millions of brilliant people out there. But OP can do it herreelf.

OP you could invest mostly in low tracker and then have some higher gambles with quarter.

Another tip I picked up is to drip feed into stock and shares.

So don't whack in the full 20 though allowance every years.

Maybe do that with first 20. But after that have say 100 or 200 transferred over every month. This helps too iron out dips in market

Also definitely get kids going for the younger kids.

Agree that you need to see an independent Chartered Financial Planner. While the entry level qualifications for IFAs are a low bar, Chartered status is not, and only a (growing) minority of advisers have this.
It is worth the fees, the most important thing is that they will do a very comprehensive fact find that will likely raise consiserations you haven’t even though of. There will be a risk profile, and their advice will be tailored to your own very specific needs, goals and concerns. It’s not just about the best performing platforms.

I have learned the hard way, too arm oneself with some information before you Go near a professional.

OP has done the right thing posting here.
She has got some information and will have some ideas of various issue's too raise.

Never go in blind too anyone.
OP money saving expert has good tips as well.

Please please ignore Thesearepearls. With £190k only a property would be a shocker. Expensive to buy, maintain and sell, second stamp duty, tenant risk, income taxable, CGT liable upon selling, and terribly illiquid (takes months to sell, and you can't sell part, only the whole thing). Its ok if you are a property professional, and/or have plenty of other assets but a terrible shout for most people.

The stuff Thesearepearls is saying about advisers is utter tosh. Entry level is QCF 4, equivalent to a foundation degree, with many now being QCF 6, equivalent to a full degree. Fees are disclosed at outset and are generally outweighed by tax advantages in the first year (especially if misguided enough to go BTL).

Do some research and find a good adviser.

Do your own research avoid financial advisers like the plague. Good for helping themselves but little else

Suewiang that’s utterly irresponsible advice. You might as well tell the OP to hide the cash under her bed! Financial advisers are qualified and knowledgeable about financial products. Unless anyone here is qualified to the FCA’s requirements, they shouldn’t be giving any advice to the OP about what to do with the money.
Lost when dealing with any financial institution or adviser, please please mention that you are a vulnerable customer (use those exact words) because of your MH. This puts an additional burden on them to provide you with the right kind of help.

Lightdrizzle entry qualifications for being an IFA are NOT low. As a PP has mentioned, they are required to be qualified to Level 4 - the equivalent of first year UG. They are tough and they do weed out potential IFAs who aren’t up to it.

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.

However, if they may inherit or save a deposit anyway, clearing the student loan will increase the size of the mortgage they can borrow. Also, the interest on a mortgage could well be less than the interest on a student loan, especially if they end up being high earners.

For DSS and for my friend's daughter, paying off the student loan worked out better financially.

I'm so sorry for your loss OP. What an awful time you are going through. My thoughts and prayers are with you and your mum and your family. Would it help to go see your GP and get some bereavement counselling? There are obviously emotional issues as well as financial and practical issues to get sorted.

With regards the other issues:

1. Put the inheritance money into an account for a few months where it is safe and earning some interest until you see a financial advisor. The Martin Lewis financial advice website is good regarding what accounts to invest in plus other advice.

2. Now relax for a few months and concentrate on yourself and getting over your loss. Take out a couple of thousand pounds from the inheritance and have a holiday somewhere with the family preferably.

3. Take some time to think about your future. Do not feel rushed into making decisions about anything. Also , do not feel rushed into spending the inheritance. You need to save it for your future especially as you do not have a pension. Do not do anything about paying off student loans until you've had advice from the financial advisor. As well as saving for your future, you can use some of the money to help your career. Do not feel you need to spend the money though. It should be there to help you for the rest of your life. Supporting your kids at uni is also a great use of the money. Property too is also a good investment in life. Check everything with the advisor though!

4. See an independent financial advisor. My wife and I used one recently and he was really good. He is based in Devon though. I'll try and find his details and pm them to you. You can then check him out. I think the fca website gives details about financial advisor credentials.

5. the financial advisor may be able to give you advice about the financial implications of divorce including on the inheritance, but also see a solicitor about the divorce. Keep quiet about the inheritance as best you can as you don't want your ex husband to know about it. I don't think he would have any entitlement as you've been separated a long time, but I'm not sure as am not an expert. The divorce itself should be straightforward as you've been separated a long time . You don't need to give any reason for divorce and he can't contest it as you've been separated such a long time.

6. A couple of things that have been on my mind for a while. One is the affects of Brexit on my investments and secondly only a certain amount of money in a bank account is safe and guaranteed if the bank goes down the pan. So you are better to have your money in 3 or 4 different banks. I know this is unlikely to happen but we never thought it would happen to RBS!

I wish you all the best OP and hope you are soon in a better place and that your inheritance helps to give you and your kids a better life. Take care x

I too am not convinced that property is a good bet for £190K: it is a relatively quite a small sum to buy outright and getting a buy-to-let mortgage is quite complex and not as lucrative with the staggered changes to the mortgage interest relief over the next few years which eats into the rental. Not to mention the immense hassle of dealing with tenants or the relatively high cost of paying a professional agency to deal with it. Property prices may also come down with Brexit and hence OP may be stuck in negative equity.

I personally think a Stocks and Shares ISA is better for capital growth and gives no hassle. With the uncertainty over Brexit, 2 strategies the OP can consider is drip feeding her investments monthly and buying a low cost passive global fund which leaves it to the expert fund managers to do the thinking for her.

I avoid IFAs but if the OP is financially not very savvy, it may be a necessary evil at first, so long as she gets a good recommendation for one. I would never use an IFA sight unseen - there are far too many mediocre ones out there. Even if I use an IFA, I still have to use my brain to do the final selection anyway. DIY investment is not that hard but I appreciate not everyone has the time or inclination to do it so IFA it is.

The highest priority for the OP is to do a simple will for her dcs and to get officially divorced.

TheDogAteMyPants - but 1st year undergraduate level is not that demeaning in my opinion. When it comes to health, wealth or legal affairs, I think a higher level of competence and experience is desirable when advising people on matters that will materially affect the rest of their lives. In our company, our future advisors gain the lower levels of IFA qualifications while working in paraplanning or support roles, they only move to advising clients after more exams and all have to commit to working towards Cha

TheDogAteMyPants - but I wouldn’t entrust my own health or wealth to someone at 1st year undergraduate level in their discipline. Most of our prospective advisors find the early units easy, many of our support staff in admin or other roles with no financial background or aspiration to be advisors also choose to take some, just to improve their knowledge of our field. Some of these staff in support roles join us without qualifications above GSCE.
In our company, future advisors work in paraplanning whilst taking IFA exams and only progress to shadowing an experienced advisors and ultimately advising themselves, after a lot of exams and exposure to the business. They also commit to working towards Chartered status.
Giving financial advice is a huge responsibility with such far-reaching consequences that I think the bar should be set high. As with Law, medicine and accountancy. I don’t think it needs to be a graduate profession (although all our advisors under 50 are) but the exams need to be tough and comprehensive.

Sorry for the nearly double post!

LightDrizzle IFA exams aren’t at all easy, the attrition rate is high, the pass rate alone proves out that they’re tough. Please stop giving people the impression that the exams are lightweight, they aren’t at all. Before the current regulatory regime was introduced, I’d have agreed with you, but it’s much tougher now, and IFA standards have improved immensely. It’s far more reckless for people to make huge financial decisions without seeking appropriate advice, or even worse, take advice from strangers on web forums.
Please can people stop giving the OP financial advice - unless you are qualified to give it, just STOP.

lightdrizzle

Whilst it is important that advisers are as knowledgeable as possible - and the advanced qualifications can certainly help with this, some of the best advisers I have come across in my 20-years in the industry are not necessarily the best qualified or most technically able.

Experience and a high level of integrity are equally if not more important. And it is relatively easy to obtain further technical information when required.

Which is why the testimonials of longstanding clients can be the very best guide.

As others have said though, any "advice" on this forum is both useless and irresponsible, especially given the OP mentioning previous MH difficulties.

Wouldn't it be dull if every post asking for financial advice is answered by "speak to an IFA".

Of course it would be better for the OP to get tailored advice from a paid for professional - that is almost always the case - but it is not unhelpful to give general views on investment to build up some financial literacy.

I am a lawyer and people give legal advice all the time on threads, some of which is wrong, some right, some partially. I am not so precious as to shut down conversation just because the posters are not legally qualified.

I am sure the OP is sensible enough to give appropriate weight to strangers on an internet forum (who clearly don't all agree) and seek appropriate advice when she is ready.

Couldn't agree more blueshoes

OP has been given lots of advice on here!!

We should all arm ourselves with as much knowledge as possible even before speaking to professional and... after I engaged a solicitor last year... I had to come on here to be guided through a new difficult situation, thanks too the poster's on here not my solicitor who fucked me over.

The irony is it's already subject people won't agree on.

There is no crystal Ball, no one can predict anything. General advice is spread assets, and be sensible. Don't put all egg's into one basket and that's what people mean re financial advice.

RayneDance, sorry to hear about your experience with your solicitor. There are bad eggs around.

I use mn as a rough sense-check against professional advice too. If anything, it arms me with knowledge to ask the right questions.

For example, an IFA may only be comfortable to advise on pensions, ISAs and deposits but completely neglect property. The OP now knows to ask about property investments as well.

blueshoes the OP is a vulnerable customer. As such, that puts in her in position whereby she may be swayed by posters on here. She needs professional advice, financial and legal. Beyond that, it’s all pointless and liable to confuse.

To all those dismissing cheaper property, there are loads of places that you can buy lovely houses in lovely areas for under 190k. That's exactly what I've been researching for 18 months to move.

Property may not be good for the op' situation but please stop saying that you can't buy decent houses in decent areas for that price. Just consult rightmove if you are in doubt.

Sorry if you aren’t happy Dog but I’d never trust one as far I see one it’s simple.
And you can do far far better yourself than any advisor will do for you