According to estimates given by MetLife, two-thirds of baby boomer households will receive some inheritance over their lifetimes, with a median amount of $64,000. For many families, this is a substantial amount of wealth and families struggle with knowing how to view this money. Here is a 10,000 foot perspective to keep in mind with regard to an inheritance.

An inheritance should ideally create a financial safety net. If an individual inherits money from his or her parents, the money is generally expected to benefit that individual and the grandchildren.

Oftentimes, when a married individual inherits money, the money is placed into a joint account shared with a spouse. This has the effect of turning the inheritance into a marital asset, which may be split equally if the couple divorces. Also, if the money is placed into a joint account, the money will likely be spent on household expenses or to pay off debt belonging to either spouse. Again, this is not ideal because the inheritance is not being saved and invested.

Instead, the money should be placed into a separate account titled in the name of the individual inheriting the money so that the inheritance will continue to belong to that individual, rather than becoming marital property. Caution should be used in placing the money in an already existing retirement account because a spouse may have some claim to those assets if the couple divorces. Please seek appropriate legal advice regarding your specific situation prior to putting an inheritance in a retirement account if you are married.

An inheritance should ideally be used to invest in future generations. Consider setting aside money for education of children or grandchild but be sure to research how it may impact potential financial aid resources, either from the federal government or from the educational institution.

An inheritance may impact your estate plan. In Oregon, there is a death tax that comes into play if an individual passes away and has more than $1,000,000 in assets. If an individual receives an inheritance that pushes him or her over the $1,000,000 threshold, additional estate planning may need to be done to minimize exposure to this tax liability.

Hire appropriate advisors to help with your particular situation. Even if you are not the type of person to buy a boat or fly to Vegas on a whim, you could likely benefit from the advice of a qualified accountant, attorney and investment advisor if you receive an inheritance. Once word gets out, you may receive solicitations from people offering you “investment opportunities” or other ways to spend your inheritance. Also, having a financial advisor may help you decide whether the money should be spent on paying off debt or should be spent on investments. Receiving advice tailored to your specific circumstances is highly recommended.