Your loved one left you a legacy. Let's build a plan that fits your life and honors theirs.
Getting large amounts of money can be a surprisingly stressful situation. We can help.
You Have Options
There’s no single right answer for everyone. For some families, the best move is saving for retirement. For others, it’s using part of the inheritance toward a home, paying off debt, or creating a plan that provides steady monthly income. Your situation is unique — and we’ll help you explore every option.
Accountability
We believe a legacy isn’t just money — it’s responsibility. Our role is to help you steward it wisely. Whatever path you choose, we’ll help you build a plan that respects both the gift and your future.
First Option - Preserve It
This path focuses on protecting and growing the inheritance over time. It may involve contributing to an IRA, investing in a diversified portfolio, or creating a structured income stream that pays you on a schedule that fits your life. We can even design it to rise each year with estimated inflation.
Second Option - Use It
Depending on your goals, it may make more sense to use part of the inheritance today — paying down high‑interest debt, putting money toward a home, or improving your monthly cash flow. This approach can create immediate stability and reduce long‑term financial stress.
Inheritance Frequently Asked Questions
Here are some common questions we hear about financial planning for inheritances and other windfalls.
Do I have to pay inheritance tax on what I receive?
There is currently no federal inheritance tax in the United States. When someone passes away, their assets become part of their estate. During the estate administration process, debts, expenses, and any applicable taxes are addressed before the remaining assets are distributed to beneficiaries.
Most estates are not subject to federal estate tax because they fall below the applicable federal estate tax exemption amount (15 million dollars as of 2026). As a result, most beneficiaries do not owe federal tax simply because they inherit money or property.
Some states impose an inheritance tax, and the rules vary by state and by the beneficiary’s relationship to the deceased. As of 2026, states with an inheritance tax include Pennsylvania, New Jersey, Nebraska, Maryland, and Kentucky.
Even when inheritance tax does not apply, certain inherited assets—particularly retirement accounts—may create income tax consequences for beneficiaries.
What are the tax rules for inheriting a Traditional IRA, Roth IRA, or 401(k)?
When you inherit a retirement account, the tax treatment depends on the type of account, your relationship to the deceased, and other factors. Many non-spouse beneficiaries are subject to the 10-Year Rule, which generally requires the inherited account to be fully distributed by the end of the tenth year following the account owner’s death.
Traditional IRA or 401(k)
Distributions from inherited traditional IRAs and 401(k) accounts are generally taxable as ordinary income. Many non-spouse beneficiaries must fully distribute the account within 10 years. Depending on the circumstances, annual required minimum distributions (RMDs) may also apply during the 10-year period, particularly if the person was already required to draw RMDs.
Roth IRA
Qualified distributions from an inherited Roth IRA are generally income tax-free. Many non-spouse beneficiaries are still subject to the 10-Year Rule. To receive tax-free treatment, the Roth IRA generally must have satisfied the applicable five-year holding requirement.
Surviving Spouse
A surviving spouse typically has additional options that may not be available to other beneficiaries. Depending on the circumstances, a spouse may be able to roll the assets into their own IRA, treat the account as their own, or maintain the account as an inherited IRA.
Exceptions to the 10-Year Rule
Certain eligible designated beneficiaries may qualify for different distribution rules. These may include surviving spouses, minor children of the account owner, disabled or chronically ill individuals, and beneficiaries who are not more than 10 years younger than the deceased account owner.
Because inheritance and retirement account rules can be complex, beneficiaries should consult with a qualified tax professional regarding their specific circumstances.
What happens if I inherit a house with a mortgage?
If you inherit a house with a mortgage, the mortgage usually does not go away. The loan still has to be paid if you want to keep the home.
That does not always mean you personally owe the debt right away. In many cases, you may be able to keep making payments, sell the home and use the proceeds to pay off the mortgage, refinance the loan, or decide that keeping the property does not make sense.
The most important thing is to contact the mortgage company quickly, keep good records, and avoid missing payments while you decide what to do.
One big warning: reverse mortgages are different. If the home has a reverse mortgage, the balance may become due after the homeowner passes away, and the family may have a limited amount of time to sell the home or pay off the loan.
Before making a decision, it can help to have a financial advisor review the bigger picture with you — including cash flow, taxes, the mortgage, and whether keeping or selling the home fits your overall plan.
What should I do first after receiving an inheritance?
One of the first things to consider after receiving an inheritance is to slow down and avoid making major decisions right away.
A practical first step is to place cash in a separate, liquid account while you get organized. This could be a savings account, money market fund, or other low-risk place where the money is not mixed into everyday spending. The aim is not to make a perfect investment decision immediately — it is to protect the money while you understand your options.
Next, make a simple list of what you inherited. Cash, a house, investments, life insurance, and retirement accounts can all have different rules, taxes, and timelines. Also note whether there are any debts, mortgages, repairs, or required account distributions tied to the inheritance.
Before spending or investing the money, it may be helpful to compare a few possible uses:
- Paying off high-interest debt
- Building an emergency fund
- Saving for retirement
- Buying a home
- Funding education
- Investing for long-term growth
- Keeping part of the money available for taxes or expenses
An inheritance can be more complex than people realize. Depending on what you inherit, there may be tax consequences, time limits, or important decisions that should not be rushed. A well-structured plan can help make sure the inheritance supports your goals and helps support your financial goals over time.
Should I use an inheritance to pay off debt or invest?
It depends on the type of debt, your cash flow, and what you want the inheritance to accomplish.
High-interest debt, like credit cards or personal loans, is often a strong candidate to pay down first. Paying off expensive debt can create an immediate, guaranteed improvement in your financial situation.
Lower-interest debt, like a mortgage or student loan, may require a more balanced decision. In some cases, investing part of the inheritance may make more sense than rushing to pay off every loan. In other cases, reducing debt may provide peace of mind, lower monthly expenses, or make retirement easier.
In many situations, the answer is not simply “pay off everything” or “invest everything.” A good plan may split the inheritance between debt payoff, emergency savings, taxes, short-term needs, and long-term investing.
Before making a large payment or investment, it helps to compare the options side by side. The goal is to make sure the inheritance improves your life today while still supporting your future goals.
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