An inheritance can feel like both a gift and a burden.

Maybe it came from a parent who never talked much about their finances. Or an aunt who passed unexpectedly and left behind more questions than instructions. Either way, a windfall – whether $10,000 or $1 million – can stir up gratitude, guilt, pressure, and confusion all at once.

That’s why the smartest move you can make right now is simple: Pause.
Before you start moving money around, it’s worth taking a deep breath and asking a few essential questions that can turn a temporary financial boost into a lasting foundation for your future. Because, no matter how you received the funds, that’s what your loved one would most likely want you to do with the money – build long-lasting wealth.

Here’s where to start.

Hit Pause Before Making Big Financial Decisions

It’s tempting to take action the moment money lands in your account. Pay off debt. Upgrade your home. Fund a new venture. The options can overwhelm you – and so will the opinions.

But this is a moment to slow down, not speed up.

Most inheritances follow loss. And grief has a way of clouding judgment. Even if the emotions feel manageable, decision fatigue is real. You’re probably juggling logistics, paperwork, and family dynamics. Trying to map out a financial strategy on top of that can lead to poor choices.

The best first step? Do nothing big.

Park the funds somewhere safe – a high-yield savings account or a short-term Treasury bill or ladder. This gives you space to process and plan. You’re not missing out. You’re creating a buffer between the emotion and the execution.

Understand What You’ve Actually Inherited

Not all inheritances are created equal.

Some come as a check. Others arrive as property, brokerage accounts, retirement funds, or even part-ownership in a family business. Each has different rules, timelines, and tax implications.

For example:

• Investment accounts may benefit from a step-up in cost basis, reducing capital gains taxes if sold shortly after death.
• Inherited IRAs now follow different distribution rules under the SECURE Act – non-spouse heirs generally need to withdraw the full balance within 10 years, although the rules vary dramatically depending on your connection with the deceased. These do not receive step-up basis, resulting in significant tax implications.
• Real estate could come with property taxes, maintenance costs, or tricky family dynamics if multiple heirs are involved. They also often receive that same step-up in basis investment accounts earns, which can give you interesting options.

So before you do anything, take inventory. What exactly did you inherit? What’s it worth today? What are the tax or legal considerations?

A financial planner can help decode your new assets, but the big takeaway: knowing what you’ve inherited is almost as important as receiving it.

Align the Inheritance With Your Bigger Financial Picture

Once you’ve taken that pause and mapped out what you actually received, the next move is to think strategically – not just tactically.

Ask yourself:

• What are my current financial goals?
• Do I have high-interest debt that’s been holding me back?
• Am I fully funding retirement or saving for a child’s education?
• Do I want to invest in a business or take time off from work?

The goal here isn’t to “do something smart” with the money. It’s to make sure this inheritance supports the life you’re already building – or the one you want to build next.

In some cases, that might mean paying off a chunk of mortgage or student loans. In others, it might mean using part of the inheritance to build an emergency fund, invest in a diversified portfolio, or max out your retirement contributions for the next few years.

Whatever path you take, the key is alignment. Don’t let this money pull you off course – use it to deepen your foundation.

At the same time, allotting some of the funds for something fun, exciting or dream-fulfilling is important in this process too. After all, your loved one almost certainly wanted you to have some fun while building that foundation.

Build a Team to Help You Move Forward Thoughtfully

If you’ve never worked with a financial planner before, this might be the moment to start.

An inheritance is often a turning point. It changes your financial picture. It might bump you into a new tax bracket, bring up new estate planning needs, or offer the first opportunity you’ve had to invest meaningfully for the future.

This is where a good team can make the difference between peace of mind and guesswork. Such a team typically involves:

• A planner, who helps you build a strategy tailored to your goals.
• A CPA or EA, who ensures you understand the tax implications of each account.
• An attorney, who can help revise your own estate documents in light of this new wealth.

You don’t need to assemble this team overnight. But starting the conversations now – during the initial pause and after a time to grieve – can help you build clarity and confidence before the decisions start stacking up.

If you do want to have an initial chat because you’re managing such a situation, feel free to connect with me.