I received an inheritance. What should I do?
First, take time—there's no rush to make major decisions. Park the money somewhere safe (savings account, money market) while you process both emotionally and logistically. Understand the tax implications, then develop a plan that honors both the gift and your long-term goals. Avoid lifestyle inflation and impulsive decisions.
Receiving an inheritance is both a blessing and a responsibility. Here's how to approach it thoughtfully.
The most important advice: Slow down. There's no decision that needs to be made this week. Most financial mistakes after an inheritance come from acting too quickly.
Immediate steps:
1. Park the money safely Put it in a savings account or money market. You'll earn modest interest while you plan. Don't invest or make major purchases yet.
2. Understand the tax situation
- Cash inheritance: Generally not taxable to you
- Inherited IRA: Special distribution rules apply (usually 10-year rule)
- Inherited property: You get a "stepped-up" basis (reset to value at death)
- Estate taxes: Only applies to very large estates ($13.6M+)
3. Assemble your team
- Financial advisor (for the plan)
- CPA (for tax implications)
- Estate attorney (if there's complexity or ongoing trust involvement)
What NOT to do:
- Don't quit your job
- Don't buy a new house or car immediately
- Don't loan or give money to family under pressure
- Don't invest in anything you don't understand
Building a plan:
Consider your existing goals:
- Does this accelerate retirement?
- Does it pay off debt?
- Does it fund children's education?
- Does it provide a cushion for emergencies?
Honor the gift: Many people find meaning in using inheritance for things the deceased would have valued—education, family experiences, charitable giving.
The emotional side: Inheritance often comes with complicated feelings—grief, guilt, responsibility. These are real. Take time to process before making financial decisions.
Our role: We help clients navigate inheritance with both technical expertise and emotional awareness. The goal is making choices you'll be proud of years later.