Alison Griffiths

I'm almost finished settling my late father's modest estate, which was divided among my brother, sister and me, with small amounts given to the grandchildren. None of us likes to think ourselves as a statistic, but it occurs to me that that I am one of the 9.4 million Canadian baby boomers who will be sharing in a trillion-dollar Canadian inheritance pie over the next 15 years.

I also went through the estate process with my husband's parents and many readers have written about their own experiences. Based on all of that, here are five suggestions about handling an inheritance — before, during and after the event.

1. Don't hold your breath!
One of the most self-defeating things in life is to count on coming into money. A 2006 Decima Research Study revealed that 1.5 million Canadians are certain that they will receive an inheritance that will be sufficient to pay for their retirement. On average they expected more than $300,000.

However, the actual average inheritance that year was only $56,000. Expectations can ruin or stunt lives.

I have an acquaintance in his late 50s whose father was extremely wealthy. It was an article of faith that he, an only child, would inherit his father's money. Firm in this belief, he lived his life accordingly, never saving a dime. When his father fell terminally ill last year, he quit his job and waited. You can't imagine his devastation after learning that his money had all gone to charity.

2. Inheritances aren't free.
There is an unpleasant yin and yang to an inheritance. To get it someone has to die, and that person is usually important to you. We all mourn differently but don't underestimate the impact. This is particularly true for offspring who have unresolved differences with their parents.

Don't hesitate to speak with someone you trust about your feelings.

3. Take your time
The only people who gain when you rush are those who want to sell you something.

In 2008, for example, an old friend and investment neophyte received an inheritance of over $200,000 following the death of her mother. Shortly after the will was probated she told me she intended to "play around" in the stock market.

I told her the stock market is no place to play any more than a viper's nest is a good location for a picnic, but she was confident. Six months later I called to find out how she was managing. She didn't want to talk about it.

As the calendar advances you almost certainly will change your mind about what to do with your windfall. Meanwhile, park it in short-term GICs or a high-interest savings account while you consider your options.

However, one thing you should do fairly rapidly is to update your will in light of the changed circumstances.

4. Seek professional advice
Contact a fee-only or fee-for-service financial planner who doesn't sell anything other than advice.

The initial meeting, during which you should sketch out your situation, is usually free. The planner should then provide you a price for a full review. Interview more than one if you aren't sure who to choose. Be candid about all your debts and income but also about your dreams and fears. Financial planners, like hair stylists, have heard it all. The good ones will probe you to ferret out concerns and issues you might never have considered.

Among the topics the planner should address are: tax implications, the impact of the windfall on other areas of your financial life and your goals, estate planning and investment options. The latter should include best and worst case projections for a range of potential investments from the most conservative to higher risk.

My experience, having worked with a number of financial planners, is they can easily save you the cost of their advice.

5. Don't expect an inheritance to fix your life.
An inheritance can reduce your stress by paying off debt but if you have a chronic over-spending problem it won't solve that. Similarly it won't automatically make you happy.

In fact, the opposite can happen. An RBC-commissioned study found that just "less than half (49 per cent) of Canada's millionaires feel they've grown happier as they have accumulated more wealth."

If an inheritance comes your way, expect emotion, plan to go slowly and the bequest will serve the purpose intended by the departed.

Alison Griffiths' latest book isCount on Yourself: Take Charge of Your Money. You can reach her at www.alisongriffiths.ca, and on Twitter at @alisononmoney.