In this video, we will walk you through how to account for an inheritance entering your client's plan.
Transcript
Today I’m going to show you how to account for an inheritance entering your client’s plan.
In this scenario, my client Jenny has an expected inheritance coming into her plan next year. If you’re not certain when or if the inheritance will occur, you can always use a What-If scenario to model it without affecting the base plan. In this case, our client is certain it will be received.
I’ll start by going to the plus button in the bottom-right and selecting Impact → Windfall. Here, we have options like Inheritance, Gift, Gambling, or Other, depending on the type of one-off inflow we want to model.
Jenny’s inheritance is $750,000. We’ll enter it into the plan for next year by double-clicking on the gray bar in the chart. I’ll give it an icon and a name so we can track it on the Timeline. We’ll set this as the Start Event and click Done.
Now you can see a large inflow appear in the cash flow for the next year. If we turn on Details, it’s listed as Other Income.
Next, we need to tell the software where to allocate this inheritance. Jenny wants $20,000 to go into an Emergency Fund Account and the remainder into her Non-Registered Investment Account.
To do this, I’ll go to the plus button → Transfers:
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Transfer from All Surplus → Emergency Fund Savings Account
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Amount: $20,000
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Recurring: No, this is a one-time transfer
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Timing: Use the inheritance event we created as the start event
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Click Save and Add Another
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Transfer from All Surplus → Non-Registered Account
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Amount: Remaining portion of the inheritance ($730,000)
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Timing: Use the inheritance event again
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Once this is set up, we can check the results.
In Your View, scroll to the year of the inheritance using the slider bar. You’ll see the inheritance coming into the plan. In the Investments section, you should see the $20,000 contribution into the emergency fund and the remainder going into the non-registered account.
You can also check the Assets Chart to hover over each account and see the expected end-of-year balances and how they grow throughout the plan.
I hope this was helpful. If you have any questions, click on the name of your client in the top-right, select Request Support, enter your question, and share client access.