How to Manage a Windfall

By Solon Vlasto, CFP®

Wealth Manager, Principal

February 12, 2023

Have you suddenly found yourself with a large sum of cash? Perhaps your windfall was expected, such as from a business sale or inheritance. Maybe it is a pleasant surprise from a large bonus or lottery win. Regardless of how it came to be, there are some critical steps you need to take to protect the windfall now that it is here. It starts with gathering the right team of advisors, working together to ensure that for you, more money does not mean more problems.


  1. Hire an attorney. Obtain counsel from an attorney who has expertise in estate planning, preferably one who has experience working with large estates. This attorney will work with you to complete standard documents such as a health proxy, power of attorney and a will. They will evaluate and advise on the need for other more complex documents such as trusts or prenuptial agreements for you or your heirs. The attorney will also review the potential receipt of the funds and work with your other professionals to protect your assets from future taxes or creditors’ claims.


  1. Hire a CPA. An accountant is a key professional to enlist, since income, inheritance and estate taxes will be of particular concern. While many states no longer have an estate tax, as of 2023, the federal government’s share of an estate is currently 40 percent of all assets above the $12.92 million threshold (individual). If you are receiving assets from an estate and estate taxes are paid, the assets in your name will be taxable when you pass away as well. An accountant, collaborating with your attorney, can assist you in postponing future estate taxes or possibly eliminating them by creating entities that will be out of your estate but still provide you with income. In addition to estate taxes, inheritance taxes, determined on a state-by-state basis, are also a consideration. Finally, income taxes are very important to evaluate and mitigate. The highest marginal tax rate is close to 40 percent; combined with state income taxes and the possible Medicare surtax, the total income tax rate could be close to 50 percent. An accountant can certainly assist with planning strategies in order to minimize the “tax bite.”


  1. Work with a financial advisor. A financial advisor can assist you with coordinating your full financial picture. They can help you determine your risk tolerance and how your newly acquired funds should be invested, as well as what growth, income, gains, or tax issues should be considered relative to the investment of the assets. Regarding heirs, a financial advisor can guide you in opening and managing other optional accounts. For example, Uniform Transfers to Minors Act (UTMA) accounts, 529 education plans, or other types of investment vehicles could be established in multiple names to minimize or defer taxes for future generations.


  1. Hire an insurance professional. For any newly or otherwise wealthy individual, adequate insurance is also important and various types of insurance should be considered. All liability coverage for cars, homes, boats, etc., should be reviewed to potentially increase the limits of liability. Liability coverage is not usually a significant expense but should be a priority. An umbrella policy that provides excess coverage in the event of insufficient liability coverage on other policies may also be in order. Life insurance and long-term care insurance should be evaluated as it’s important to determine what your needs will be if you pass away suddenly or become disabled. You don’t want to have a large portion of your inherited wealth spent on estate taxes or long-term care expenses without a plan to replenish those assets.


  1. Review all major outlays carefully. Before paying off the mortgage, buying a second home, leasing a car, etc., all of your major decisions should be reviewed by your team of advisors, with your financial advisor taking the lead. Your team will help review what your intentions and goals are; you may want to make “green investments,” retire early, volunteer for various charities, go back to school or change careers. While these goals are not necessarily financial decisions, they certainly influence the larger financial picture, since they may create a need for additional income.


At Modera Wealth Management, our advisors help our clients face both expected and unexpected changes to their overall financial picture, especially when it comes to sudden wealth. We invite you to get in touch with us to learn more about how we can work with you to help safeguard your finances today and for years to come.



Modera Wealth Management, LLC (“Modera”) is an SEC registered investment adviser. SEC registration does not imply any level of skill or training. Modera may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. For information pertaining to Modera’s registration status, its fees and services please contact Modera or refer to the Investment Adviser Public Disclosure Web site ( for a copy of our Disclosure Brochure which appears as Part 2A of Form ADV. Please read the Disclosure Brochure carefully before you invest or send money.

This article is limited to the dissemination of general information about Modera’s investment advisory and financial planning services that is not suitable for everyone. Nothing herein should be interpreted or construed as investment advice nor as legal, tax or accounting advice nor as personalized financial planning, tax planning or wealth management advice. For legal, tax and accounting-related matters, we recommend you seek the advice of a qualified attorney or accountant. This article is not a substitute for personalized investment or financial planning from Modera. There is no guarantee that the views and opinions expressed herein will come to pass, and the information herein should not be considered a solicitation to engage in a particular investment or financial planning strategy. The statements and opinions expressed in this article are subject to change without notice based on changes in the law and other conditions.

Investing in the markets involves gains and losses and may not be suitable for all investors. Information herein is subject to change without notice and should not be considered a solicitation to buy or sell any security or to engage in a particular investment or financial planning strategy. Individual client asset allocations and investment strategies differ based on varying degrees of diversification and other factors. Diversification does not guarantee a profit or guarantee against a loss.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.