applesLump sum distributions from an inheritance or a divorce settlement come with some complexities.

There are timing issues. For example, you may need to make certain decisions in a timely manner if you are planning on reinvesting the assets. And if you are planning on reinvesting the assets, you should consider the short term and the long term along with your lifestyle and other assets.

There are tax issues. You may be able to minimize or eliminate taxes depending on the circumstances.

There are valuation issues. You may need to ascertain the value of the assets as of a certain date in time for tax purposes.

There are “roll over” issues. If you receive an IRA or 401(k) plan, you have choices to make, including receiving the assets as cash, or rolling the assets over into another qualified retirement plan.

Consulting with your financial professional is the first step towards making wise, informed decisions when receiving a lump sum distribution.

Conveniently located in Central New York state, Ann Wolfson Associates is a financial planning and consulting firm dedicated to helping individuals, families and organizations reach their financial goals. If you have questions about this article or if you would like to become a client of Ann Wolfson Associates, please call (315)449-4730.