From Rags To Riches – Now What?

COLORADO SPRINGS, CO. - Financial blessings can be disastrous for families that are not prepared for it. People known to have millions are found filing for bankruptcy every day. Lottery winners are no exception, nor are sports stars, celebrities, or even simply recipients of inheritance. The key is knowing how to manage the new money in a way that doesn’t spell disaster later down the road.  Local Enrolled Agent, Kathy Bylkas, offers some guidelines on how to handle a sudden windfall.

“Well first, assess your tax strategy. Unexpected financial gifts have a way of affecting taxes. Most good tax professionals can suggest moves to protect you and your new wealth,” Bylkas said.

Some other strategies include:

1. Philanthropy – Give some of your new fortune away. This will help prevent that sudden wealth from affecting your character.  
2. Refocus on Goals - How will this new wealth help you realize your pre-existing life goals? Often upon receiving large sums of money, people tend to move away from old goals and start to make new ones. Instead, re-focus on what’s always been important to you.
3. Get a Financial Advisor - Find someone immediately to help you organize and manage your new funds. Work with someone with experienced handling the finances for people with wealth.
4. Slow Down – With the sudden influx of large amounts of cash, most bad decisions happen in the first few months. So, instead of succumbing to the temptation to start spending, put it into a low-yield savings account for three months.

Contact Information

Kathy Bylkas, EA

Business Owner

Your Taxlady

(1) (719) 548-4924

taxladyco@usa.net