"My mother's estate is soon to be dispersed and I am being asked if I would like my proportion in shares or cash. Given the current state of the stock market, what should I choose?"
- Question from Kim, Box Hill South, VIC
Top answer provided by:
Robert Greig
Hi Kim
Great question, a big decision for you to make!
The first step in answering your question is to consider how the inheritance will impact you and your personal position. There is a variety of secondary options available to you which you should explore with a financial adviser who has a holistic approach to financial planning.
At time of writing, the sharemarket is showing signs of resilience, particularly small-caps as the recent rally broadens into other sectors and segments of the equity markets. There are however, pocked of overvaluation suggesting limited upside in the short-term unless earnings continue to beat expectations.
If you’re comfortable with market volatility and have a long-term investment horizon, taking your inheritance in shares could offer meaningful upside. Shares can also provide dividend income and potential capital gains over time. There are also some additional tax considerations with inheriting or selling the shares.
On the other hand, cash offers certainty and flexibility. If you’re facing short-term financial needs—such as repaying high-interest or non-deductible debt, covering medical or education expenses, or building an emergency fund—cash may be the more prudent choice. Eliminating debt can deliver a guaranteed financial return. Cash also allows you to make strategic decisions at your own pace, whether that’s investing gradually or simply gaining peace of mind.
A blended approach may be ideal: This is where a financial adviser will provide value to you. Working out what is in your best interest, building a financial plan personalised to you and your needs, and assisting in the implementation of the specific recommendations.
Key Lessons to consider when receiving an inheritance;
Avoid Rash or Risky Decisions
Inheritances often arrive during emotionally charged times, which can cloud judgment. Jumping into high-risk investments or spending impulsively—like buying luxury items or chasing speculative returns—can erode your wealth quickly.
Don’t Delay Decisions
On the flip side, doing nothing with your inheritance can be just as damaging. Letting cash sit idle without a plan means missing out on growth opportunities or failing to address pressing financial needs.
Understand Tax Implications
Shares and property can trigger significant capital gains tax if not managed properly. Choosing shares without understanding the tax consequences could reduce your net benefit. Expert advice is crucial here.
I’ve included an article you may find helpful, The Importance of Financial Advice on Inheritance along with some Financial Planning Videos & Podcasts from our team here at APT Wealth.
Ultimately, the right choice depends on your personal circumstances, financial goals, and comfort with risk. Consider speaking with an adviser who can tailor a plan to your needs.
While the Adviser Ratings Website facilitates the question and answer functionality, all such communications are between users and authorised financial advisers, of which Adviser Ratings has no affiliation. Adviser Ratings is not the advice provider and does not provide financial product advice and only provides information that is general in nature.
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