Making it out big in a divorce isn’t the most common thing, but it does happen to a fair amount of people – especially ones who hire lawyers to fight on their behalf.Â Yet many of these people aren’t prepared to handle the family’s assets.Â Put simply, they’ve never had to deal with anywhere near as much money as they have now.
Granted, this would be a great problem for almost anyone to have: how best to handle a great deal of money.Â But, it is still something that people need to understand if they intend on keeping that amount of money, because as we have all seen, a few poor investments can wind up costing quite a bit of money.
A recent article in the Chicago Tribune gives some great advice for people who have suddenly come into a large amount of money; be it by the lottery, inheritance, or divorce.
A particularly good analogy in the article describes how most of us are used to gradual money coming in from annual salary.Â But when we come into sudden money, â€œ[i]tâ€™s like being on the ground floor of a 60-story building and rocketing to the penthouse suite in seconds.â€
If you truly have come into a substantial amount of money, it is probably worth your while to hire some people that are experts in financial planning.Â You can think of them as an investment.Â They can help you not only keep your money, but maybe even turn it into more.
One of the first things that youâ€™ll have to figure out is how much money you have in real dollars.
When people come into a large amount of money, the often forget to include the taxes they have to pay and their previous debt.Â If you receive five million dollars, but 2 million have to go to taxes and another $250,000 have to go to paying off a house, your actual number is half of what it initially sounded like.
Then determine what you would like to have. Make a list of the most important to least important things you would like to do with your money.
After you do this, you should consult with your financial planners and determine what is possible.Â It is very easy to think of thousands of things youâ€™d like to do with your money, but no matter how much you have, there is a limit to it. Nobody has unlimited funds.
Once you have you real number and your plans whittled down into what is reasonable, you can begin to do what you want with the money. The last caveat is that you will have to regularly monitor of your finances.
Just because something is reasonable for you to do today, doesnâ€™t mean that it will be in 5, 10 or 15 years.Â With simple monitoring of your financial situation, you can enjoy your money for a long time to come.
So if you are going through a divorce and expecting to receive a significant settlement, be certain to have to your expectations in line with reality.