Traditionally in the Middle East, a number of people count on family inheritances while envisioning their financial future. Unique as it is, when compared to other cultures such as Europe, residents here still remain confused about how to manage the inheritance that they are likely to receive. The lack of a clear financial strategy or plan to deal with an inheritance could mean that the money is misspent and squandered away much sooner than expected, leaving the inheritor high and dry.

In order to safeguard yourself from a less secure future, here are a few things you could keep in mind that will enable you to handle your inheritance well and also help you make the most of it.

But before you can receive your inheritance, be aware that generally in the UAE the Sharia Law is applied to resolve any inheritance matters for both UAE nationals and Expatriates. Therefore, as an asset owner make sure you manage the residence of your wealth to ensure they get distributed as per your wish.

Take a step back

Before you move forward with your inheritance, it is wise to take a few steps back to evaluate your current financial position. Answer a few questions to get a clear roadmap. Do you have enough saved up for a comfortable retirement? Is there an emergency fund that will take care of your routine expenses for at least a year? Do you have a robust investment portfolio that will supplement this inheritance?  Are there any high loans or debts that you need to pay off? These questions will help you take stock of your situation and help build a strong foundation for a stable future.

Clear off debts

Do you have high credit card bills that you have no idea how to pay off? Is there a personal, car or home loan that you would like to strike off at the earliest? Do you owe anyone any money? If you answered yes to any of these questions, use a part of that inheritance to clear off all the debts that you have. Rid yourself of all the bad debts so that you can start on a clean slate to achieve your financial goals.

Hire an expert

Once you have a fair idea of where you stand in terms of financial planning and having cleared all previous debts, it’s time to look ahead to the future. Get on board with a good financial expert – If you do not have a financial plan, get his/her help to design one. In case you do have a plan, get the expert advice on how to best exploit and get an objective opinion on investments and financial portfolio planning based on your goals. For example, if you have inherited, say a family business or a property that you have co-inherited with other family members, an expert’s opinion can probably help you manage your options better.

Do not give into temptation

It is but natural to want to start spending the money you have received on things you like – a fancy car, a big boat or gazillions of gadgets. Be careful of squandering away your precious inheritance on fancy toys. They will give you temporary inheritance, yes, but you will end up consuming your inheritance faster than you thought. A lot of experts reckon that typical beneficiaries go through all of the money they inherit within a matter of 3-10 years, because of callous spending and lack of restraint. While it is important to reward yourself, do spend on things that will give you better returns such as buying a house.

Master the art of saying no

It may sound funny, but once you have inherited money a number of people will come up to you to present business ideas, investment plans, or even ask for financial help – it is important to exercise caution here. You may feel like helping them all but you must be aware that many times the money you lent to a friend in need is never coming back, hence you need to be careful and say no. The same holds true for a business you invested in – it could sink or float – it’s high risk and you must take your financial adviser’s advice in such situation.

Once you have taken care of the most important things you need to keep in mind vis-à-vis an inheritance, feel free to indulge yourself a little – maybe go for the long pending vacation, or buy that designer outfit you have been swooning over.  Whatever be your indulgence, limit your spends to under 10 percent of the inheritance. Indulgences can quickly escalate into becoming a habit.

Whether you get an inheritance that you were prepared for, or it is a windfall you receive-  an inheritance is a sizeable amount of money and can go to people’s head. Be aware of this, so that money does not change the person that you are and affect your relationships adversely.