12 days of… sudden wealth

A windfall can be life-changing, and financial advice is as much about providing emotional support as managing the numbers. If you’re coming into some money this Christmas – or any other time of year – here’s where advice makes a difference.

1. A big inheritance

Inheriting money doesn’t always feel like good news. You might be coming to terms with the death of someone close. You may have lost a partner who previously made all the financial decisions and you’re now feeling anxious about financial security. You may even feel duty-bound to spend your inheritance in a way “they would have wanted”.

Grief complicates financial decisions, making them seem overwhelming. A good financial planner has empathy and gives you time to breathe as you adjust to your new financial circumstances. We’ll help you set out a financial plan for your newfound wealth, including using cashflow modelling to show how it affects future spending plans and tax arrangements. And we’ll help you find the balance between defining your own financial path and honouring a legacy.

2. A divorce settlement

Divorce often means an unexpected shift in your financial circumstances. It might involve a significant settlement from your former partner, the proceeds from dividing up ownership of a property or other assets, or an agreement for financial support.

But money is only one part of what’s often a difficult and emotional process. We frequently speak to clients who have gained sudden responsibility for managing assets alone, and we help them adjust to their new independent financial identity. We look at the best options for newly acquired assets, talking you through how the change in circumstances might affect tax arrangements, and how unwinding a joint financial plan will impact future wealth.

3. Selling a business

You’ve built a business from scratch, pouring heart and soul into making it a success. Now it’s time to sell and move on to the next chapter. For entrepreneurs selling their companies, there’s often a dramatic transition as they move from most of their wealth being tied up in the business to an abundance of liquid assets. This can bring a sense of accomplishment or relief, but also be combined with a loss of purpose or the comfort of a routine.

As financial planners, we help manage that lump sum to support whatever you plan to do next – whether that’s retirement or starting another project. And we’ll help you to redefine your goals.

4. Stock options or equity compensation

You were in at the ground floor of a young, growing business. Now the company has gone public with a bumper payout in share options for you and your colleagues.

Sudden wealth when your stock in a company vests, it’s floated on the stock market or the company is acquired, can be challenging. Equity wealth fluctuates dramatically, and navigating the wealth transition means dealing with taxes, liquidity events, and big decisions about lifestyle changes – often while you’re still working under demanding conditions. Should you sell some or all of your shares? And if you do, how should you reinvest the money? Our role as financial planners is to help clients stay calm and avoid knee-jerk reactions. We can help map out your future income with cashflow modelling to demonstrate the best options for your future.

5. A professional sports contract

Kieran Tierney, whose wonder goal against Denmark helped take Scotland to next year’s World Cup, bought his parents a house when he signed his first big professional contract. Barcelona star Lamine Yamal bought three when he was just 16 – for his Mum, Dad and Grandmother.

Athletes who hit the big time can go from very modest means to a significant income in a very short space of time. But careers are short and unpredictable. Depending on your sport, you may be ‘retired’ by your early 30s and looking for a second career. The public nature of your wealth can add to the pressure, and managing this new-found income responsibly is as much a personal transition as a financial one.

The advice we give often includes some financial education, helping clients feel comfortable with terms and concepts that can seem overwhelming, especially when you’re very early in your career.

6. Winning the lottery

Seven new millionaires are made every week playing the National Lottery.[1] Not everyone who gambles dreams of winning big, but when it happens, it’s one of the most extreme forms of sudden wealth. With any large gambling payout, whether it’s the lottery, casino or sports betting, there’s no gradual adjustment. The wealth appears overnight, potentially leading to impulsive decisions, big lifestyle changes and dealing with unexpected requests for financial help from friends or family.

Financial advice centres on helping the client take time to reflect and understand their win, consider if their current goals are still relevant to them and identify areas that might need recalibrating if there are new priorities (for example, passing money onto your family or buying a new property). At AAB Wealth, we were delighted to be selected by Allwyn, the operator of the National Lottery and have helped winners through this transition.

7. A legal settlement or insurance payout

Receiving a large settlement after an accident, medical negligence or personal injury case can bring a complex set of emotions. On the one hand, you might feel a sense of victory, especially if that money has come after a lengthy wait. But the money can also feel connected to trauma and loss. It can be the same when you receive a sudden financial shift from a large insurance payout.

For us, the focus is on ensuring the payout supports long-term care or compensates for lost earning abilities that require careful planning. But the transition is rarely purely financial; it can include adjusting to changes in health, capacity, or family structure, leaving people with complex feelings about money arriving during hardship.

8. A big entertainment contract

Musicians or entertainment stars frequently struggle before their big break, even if it seems like they’ve had an ‘overnight success.’ Lewis Capaldi, now one of Scotland’s most successful musicians, famously said that even when his debut album had topped the charts, he still had “less than £200 in his bank account”.

When that big moment comes – a platinum-selling album, or an Eras world tour – it can come with a life-changing transition. But even so, this income can be uneven and unpredictable. Good financial advice will help balance long-term security with enjoying your moments of success.

9. Corporate success

In 2010, PopMart was a small store selling hip novelty toys in Beijing. It’s now worth more than US$30 billion, all thanks to the sensational rise of its Labubu dolls. A viral product success like this, or an unexpected contract win, can mean significant new income for the business owners.

This is all reason to celebrate – but there’s also a huge challenge to distinguish between temporary success and sustainable long-term wealth. Financial advice can help protect against overcommitting resources too quickly, ensuring you’re better prepared for the future.

10. Profits from property

In property, timing is everything. A neighbourhood suddenly becomes fashionable, leading to a dramatic lift in house prices. Mole Valley in Surrey, for example, has seen the number of million-pound homes leap from one in 10 to more than one in five in the last five years.

Selling property is a very common reason for sudden wealth. We often speak to clients who go from being asset-rich but cash-poor, to having substantial liquidity. Our focus as planners is on investing this newly acquired wealth, safeguarding it, and managing the proceeds.

11. A redundancy or retirement package

If you’re an executive or have been at your business for a long time, the retirement or redundancy package when you leave can be a significant sum. A substantial golden handshake or pay-off can leave you suddenly wealthy.

Even when this wealth has been known about for some time and is part of your financial plan, the actual moment it arrives can feel abrupt, especially when coupled with the shift in identity that comes with leaving a long-held role. Good financial planners will help explore the different options freed up by a change in income source and help you set goals for the future to make this major life adjustment.

12. Young and suddenly wealthy

Sudden wealth at any point in your life is often overwhelming. But it’s even more so when you’re young.

We often speak to clients who are passing wealth on to their children, who are concerned about the impact this will have after they are gone. Whether inheriting money in a will or accessing a trust fund for the first time, without the knowledge or experience of saving and investing, the big windfall can leave a young person feeling vulnerable. Young people coming into wealth are at risk of financial mismanagement so need a financial planner who can deal with them empathically. We can help clients think about managing their legacy, and we encourage conversations between generations to minimise the impact.

Handling any large sum is challenging

Sudden wealth is receiving an amount of money that’s larger than you’re accustomed to, rather than falling into a specific income bracket. It can leave you feeling overwhelmed and even vulnerable.

At AAB Wealth, we support clients who have come into sudden wealth through inheritance, legal settlements, or from selling businesses, shares or properties. We’re there for financial (and emotional) support to help them maintain their grip on issues such as expenses, investment risk, and long-term goals. Financial planning, including cashflow modelling and asset protection, can help give you clarity during any transitional period when everything else may feel uncertain.

Please get in touch if you’d like to find out more.

With Christmas being the season of giving, we look at some ways you can gift of the most important things to remember about financial gifts. Sudden wealth can feel exciting, emotional, and overwhelming. Discover how we can support you with practical guidance and steady advice.