Introduction
Inheriting wealth can be a life-changing event, but it also brings a mix of emotions that many of us might not expect. More than just a financial windfall, inheritance arrives hand-in-hand with loss, often stirring feelings of responsibility, guilt, and even fear.
For individuals navigating midlife transitions, inheritance can amplify questions around identity, self-worth, and long-term goals.
In this article, we explore these complexities and provide evidence-based strategies to help navigate them, combining insights from positive psychology with practical financial guidance.
The Emotional Shockwaves of Inheritance
Inheritance often arrives during a period of grief, intensifying the emotional journey. Studies have shown that grief can impair decision-making and lead to impulsive or overly cautious financial behaviour (Folkman, 2001). As with dying, or what has now been dubbed “the 5 stages of grief” (inspired by Kübler-Ross, 1969), the emotional journey that accompanies bereavement is not necessarily linear and is likely to be mixed.
Midlife women are particularly susceptible to these effects, often facing additional life transitions, such as career changes or family dynamics, alongside inheritance. Positive psychology, which encourages resilience through self-reflection and mindfulness, offers valuable tools to help manage these emotions, allowing women to approach their newfound wealth with clarity and purpose.
Financial Mindset and Positive Psychology
Positive psychology’s principles, particularly the focus on resilience and emotional intelligence, can guide us through the complex emotions associated with inheritance.
Research in financial behaviour highlights the importance of mindset in managing wealth effectively; those who feel empowered are more likely to make aligned and mindful financial decisions (Shu & Peck, 2011).
Using self-compassion and mindfulness e.g. we can engage with these complex emotions without letting them drive impulsive actions. Understanding and naming our emotions also—whether guilt, fear, or responsibility—allows us to address these feelings before making significant decisions.
Identity Crisis and Inherited Wealth
For many women, midlife brings self-reflection and reevaluation, often intensifying with inheritance.
Studies show that a financial windfall can create what’s termed a “psychological ownership” of inherited assets, connecting them emotionally to the deceased’s memory (Archer, 1999). This sense of ownership can bring both comfort and pressure to make “perfect” financial choices that honour the loved one’s legacy.
In practice, however, the healthiest decisions are those that balance personal values with practicality. For example, aligning financial choices with long-term goals and values, rather than societal expectations, can help establish a sense of autonomy and emotional clarity.
Common Emotional Challenges: Guilt, Responsibility, and Fear
Many inheritors experience guilt, particularly when they feel unworthy of the wealth or perceive the money as a “burden” rather than a gift. This emotional weight can lead to behaviours such as reckless spending or financial paralysis, where the recipient hoards money out of a fear of losing it (Stroebe, Schut, & Boerner, 2017).
Positive psychology encourages us to examine these limiting beliefs and reframe them with self-compassion.
For example, rather than viewing inherited wealth as “undeserved,” consider it a resource to be used in a way that aligns with your values and supports your well-being. You can try to see it as a way to continue the relationship with the deceased, both in continuation and / or on new terms, and choose which stance is most helpful to support you & your values.
Practical Steps for Managing Inheritance Emotionally and Financially
Managing inheritance effectively requires a balanced approach that integrates financial planning with emotional awareness. Here are practical strategies to consider:
1. Pause and Reflect: You can consider placing your inheritance in a high-yield savings account as a holding measure, allowing time to process emotions before making large financial decisions.
2. Build a Support Team: You may want to assemble a financial advisor, accountant, and, if needed, a financial therapist who can help balance practical planning with emotional well-being.
3. Set Clear Financial Goals Aligned with Personal Values: Identifying your top three values can create a framework for how you wish to use the inheritance, ensuring it honours both your goals and legacy.
4. Embrace Self-Reflection and Mindfulness: Regular self-check-ins help identify emotional triggers and avoid impulsive decisions. Mindfulness practices, such as journaling, can build the emotional intelligence needed for balanced financial decision-making.
5. Make Incremental Decisions: Once you feel prepared, work with your financial team to create an actionable plan that includes setting up an emergency fund, paying down debt, or supporting causes you care about.
Conclusion: Embracing Empowered Financial Decisions
Understanding the emotional side of inheritance can transform this complex experience into one of empowerment and legacy. By integrating positive psychology principles, you can manage your financial choices in alignment with your values and emotional well-being.
Join us on 31 October at 12:00 PM CET for “Money & Death: The Emotions of Inheritance & Other Scares,” where we’ll discuss these topics in depth and provide actionable tools to flourish both financially and emotionally. As far stretched as it sounds, it is possible to turn challenging financial transitions into opportunities for personal growth and resilience.
Sincerely yours,
Dr. Sophie
PS: And if you’re ready to strengthen your financial resilience and align your financial goals with your personal values, our “Flourish Financially” programme could be just what you need to guide you through this journey. Explore more about how you can thrive financially by visiting our website https://flourishfinancially.org/ or scheduling a consultation with me.
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Inspired by:
Archer, J. (1999). The nature of grief: The evolution and psychology of reactions to loss. Routledge.
Folkman, S. (2001). Revised coping theory and the process of bereavement. In M. S. Stroebe, R. O. Hansson, W. Stroebe, & H. Schut (Eds.), Handbook of bereavement research: Consequences, coping, and care (pp. 563-584). American Psychological Association. https://doi.org/10.1037/10436-024
Kübler-Ross, E. (1969). On death and dying. Macmillan.
Shu, S. B., & Peck, J. (2011). Psychological ownership and affective reaction: Emotional attachment process variables and the endowment effect. Journal of Consumer Psychology, 21(4), 439–452. https://doi.org/10.1016/j.jcps.2011.01.002
Stroebe, M., Schut, H., & Boerner, K. (2017). Cautioning health-care professionals: Bereaved persons are misguided through the stages of grief. Omega – Journal of Death and Dying, 74(4), 455-473. https://doi.org/10.1177/0030222817691870
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