Consider these actions when you come into sudden wealth.

Coming into sudden wealth can be exciting and overwhelming — whether it’s from the sale of a business or a large inheritance. You’re thrilled that you’ve reached financial independence, but you may be nervous about making mistakes with your money. William Scofield, Senior Vice President and Director of Wealth Planning at Regions Private Wealth Management in Memphis, Tennessee, recommends considering these seven financial tips before spending your new wealth.

1. Assemble the Right Team of Advisors

Meet with a wealth advisor, attorney, tax advisor, insurance professional, and portfolio manager to find out how they may be able to help you make important decisions with your wealth, such as what are your short-term and long-term goals and objectives, where to invest your money and whether to purchase additional insurance.

2. Determine Where You Want to Keep Your Money in the Short-term

Park your wealth in an account that offers minimal risk and high liquidity until you decide how you want to use it. Get used to having your wealth before making major decisions of what to do with it.

3. Update Your Will and Overall Estate Plan

When you come into a lot of money, it’s time to review your will and make any necessary changes. Updating this and other legal documents will ensure the right people and organizations will inherit your wealth, and that your wishes will be honored.

4. Consider Setting Up a Trust

If you want to set specific parameters on how your heirs can use the money, think about setting up trusts for your beneficiaries. Some trusts also can help reduce estate taxes.

5. Weigh Tax Consequences

No matter how you acquired your wealth, you are responsible for paying the appropriate taxes on it. For instance, if you sold your business, you may owe capital gains tax. If you inherited your money, some of the assets, such as retirement plan funds, might come with an income tax yet to be paid. Estimate the taxes you may owe, and determine the best way to tackle them.

6. Create a Long-term Wealth and Investment Plan

Before you invest your money, define your long-term financial goals and objectives and create a written wealth plan to achieve them. As you consider your investment plan to achieve your goals, determine how much risk you can tolerate. Ask yourself how comfortable you are with the fluctuations in the stock and bond markets, and invest accordingly.

7. Your Insurance Policies

Re-examine your existing insurance policies and determine whether you require additional coverage. For instance, you may want to purchase an umbrella liability policy to protect yourself from lawsuits or buy additional life insurance to replace assets for your beneficiaries used to pay estate taxes.

Learn more about investing your sudden wealth.