What would you do if you suddenly received a financial windfall and the unexpected responsibilities that come with it? Evaluating your newfound financial position will likely bring questions and the potential need for professional advice as you navigate how it will affect your financial goals.

Evaluate your new financial position

Your first impulse may be to go out and buy things, but that may not be in your best interest. Even if you're used to handling your own finances, now is the time to think carefully about the future and consider a comprehensive strategy.

Answering these questions may help you evaluate your short- and long-term needs and goals:

• Do you have outstanding debt?
• Do you need more income?
• Do you plan to pay for your children's education?
• Do you need to bolster your retirement savings?
• Are you planning to buy a home?
• Are there ways to minimize any upcoming income and estate taxes?

The answers to these questions may help you begin to formulate a plan. Remember, there's no need to rush. You can put your funds in an accessible interest-bearing account until you have time to plan and think things through.

Tax and financial planning advisors can help guide you through this new experience.

Keep the Investments or Make Your Own

If you inherit investments, you may wonder whether to keep them or sell them and make your own. One of the advantages under current law is the step up in basis many assets receive upon someone’s passing.

The benefit of this to you is the tax basis of what you inherit will likely be close to the current fair market value. This could minimize the potential income taxes owed if you sell the assets. The key is not the tax consequences of making changes, but rather understanding how the assets fit into your overall plan. Also understanding your tolerance for the types of risk involved with each asset is critical to building the best strategy.

Impact on estate planning

Conserving your money and putting it to work so that it best fulfills as many of your goals as possible is important. This also means minimizing your taxes and creating financial security for your family.

For example, are your will and trust up to date? These essential documents will spell out how your worldly possessions will be distributed after your death, so you’ll want to make sure that they accurately reflects your wishes. If your newfound wealth is significant, you should meet with your attorney. You may want to make a new will and trust and void the old ones instead of simply making changes by adding a codicil.

Carefully consider whether the beneficiaries of your estate are capable of managing the inheritance on their own. For instance, if you have minor children, you should consider setting up a trust to protect their interests and control the age at which they receive their funds.

It's also a good idea to consult a tax or financial professional. Evaluating the amount of federal estate tax and state death taxes that your estate may have to pay upon your death, is an important consideration.

Gifting

Is gift giving part of your overall plan? You may want to give gifts of cash or property to your loved ones or to your favorite charities. It's a good idea to wait until you've come up with a financial plan before giving or lending money to anyone, even family members. If you decide to give or lend any money, put everything in writing. This will protect your rights and avoid hurt feelings down the road. In particular, keep in mind that:

• If you forgive a debt owed by a family member, you may owe gift tax on the transaction.
• You can make individual gifts of up to $19,000 (2025 limit) per donee per donor each calendar year without incurring any gift tax liability ($38,000 for 2025 if you are married, and you and your spouse can split the gift).
• If you pay tuition directly to a school, you can give an unlimited amount to pay for someone's education without having to pay gift tax (you can do the same with medical bills).
• If you make a gift to charity during your lifetime, you may be able to deduct the amount of the gift on your income tax return, within certain limits.

Because the tax implications are complex, you should consult a tax professional for more information before making sizable gifts.

The experienced team at Busey Wealth Management can help you navigate the future with a solid financial roadmap. To learn more, visit busey.com/wealth-management.

This is not intended to provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients should obtain their own independent tax advice based on their particular circumstances.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

This presentation is for general information purposes only. It does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client.