I received an inheritance. What should I do?

David TalleyUpdated December 15, 2025

Quick Answer

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.

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