A caller to “The Ramsey Show” had his life turned upside down when his mom showed up at his door with the staggering news: they’d just inherited a fortune. But the surprise came with an unexpected twist that left him reeling.
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“My mom called me and let me know a family friend, someone she had known for a very long time, had died,” the caller said to co-hosts George Kamel and John Delony. “The estate lawyer contacted us and let us know this person had left my mom and me in his will, and the estate is worth anywhere from $10 million to $14 million.”
But it didn't stop there. The caller said, “In the will, he’s appointed me as his son; I've never seen this man in my entire life.” Of course, the revelation brought sudden wealth and an emotional shock because of the hidden family secret.
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Receiving such a considerable inheritance is overwhelming, especially if it's unexpected. Delony said the first step was to understand the mechanics of what happened. The caller stated that this wasn’t a cash lump sum inheritance. “We won’t necessarily be able to collect the liquid cash,” he explained. “The money is being held in trust, and we’ll be splitting the dividends, interest and whatever income the trust brings in.”
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The caller indicated that the trustee, the deceased man’s lawyer, had estimated the trust would produce approximately $500,000 yearly to be split between himself and his mother.
Given his complicated circumstances, Delony promptly advised the caller to seek the advice of an attorney. Trusts manage large sums of money and other wealth and are often accompanied by instructions on how those assets will be distributed or dealt with. While a trustee is legally obliged to act in the interests of the beneficiaries, the presence of an attorney will protect the caller’s interests and ensure that his rights and options are known to him.
Kamel also reiterated that it was time to build an excellent professional team to manage the new wealth. When so much money is inherited, taxes can't be avoided. “Talk with a tax professional to help limit the tax hit,” he said. "Get an umbrella insurance policy — a cover that offers excess liability protection — something essential for a person suddenly holding substantial assets in his name."
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Besides taxation and insurance, Kamel recommended that the caller consult an investment advisor. Even though he'll not get the total amount in cash, the annual income from the trust is substantial enough to require thoughtful handling of the fortune. A smart investment can help preserve and grow the fortune and achieve long-term security.
Moreover, Kamel warned against making impulsive lifestyle changes. “Receiving a large inheritance is life-changing, and it’s easy to make regrettable decisions if you act too quickly,” he said. In this relatively rare case, the caller isn't only dealing with encountering sudden wealth, but also the emotional effect of a secret kept hidden for decades.
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Kamel further suggests that the caller should consult a therapist who could help him better understand this new reality. He must be prepared for this inheritance’s financial and personal consequences so they can make reasoned decisions, not impulsive ones.
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