What's the right thing to do with my inheritance?
<div class="user-question">I just got my inheritance. What do I do??</div>
I’m so sorry for your loss. Receiving an inheritance can be very emotional, and on top of that, it can feel overwhelming to suddenly be responsible for money you didn’t plan for or ask for.
The most important thing to know right away is this: you don’t have to figure everything out all at once. In fact, it’s best if you don’t tackle everything in the moment.
A practical way to approach an inheritance is to separate decisions into two categories: decisions you may need to make right away, and decisions that require your full attention that you’re better off not making in a rush. This alone can take a lot of pressure off.
Some steps are time-sensitive, not because you need to invest or make big choices, but because you want to avoid surprises or mistakes.
Things to do relatively soon
1️⃣ Park the money safely. If you’ve received cash, move it to a high-yield savings account or money market fund so it’s secure, liquid, and earning some interest while you take your time to decide what to do next.
<div class="frich-tip">Frich tip: Here are our team's favorite HYSAs!</div>
2️⃣ Take inventory. Make a simple list of what you’ve inherited - cash, brokerage accounts, retirement accounts like inherited IRAs or 401(k)s, real estate, or other assets. Gather statements, beneficiary forms, and estate documents so you understand the full picture.
3️⃣ Learn whether any deadlines apply. Inherited retirement accounts often come with required withdrawal rules and timelines that depend on your relationship to the person who passed away. Missing these can lead to unnecessary taxes or penalties.
4️⃣ Get early tax clarity. Income taxes may apply to certain assets or withdrawals, and some states have inheritance or estate taxes. A conversation with a CPA or tax professional now can help you avoid surprises later.
5️⃣ You might need to use some of the money for an emergency fund or to pay off high-interest debt, or cover a known upcoming expense. Tapping your funds for those reasons is completely reasonable.
Just as important are the decisions you do not want to rush.
Things to take your time to decide
1️⃣ Don’t feel pressure to invest the money immediately. There’s no prize for acting fast. Get as much education as you need in order to feel confident about any conversations you may get into regarding your money. Avoid at all costs anyone who makes commissions from something you might invest in, and/or any high pressure annuity or insurance pitches.
2️⃣ Don’t commit to a long-term investment strategy before you’ve had time to process both the financial and emotional impact. For those discussions, enlist help from a fee-only registered investment advisor who is legally obligated to put your best interests first 100% of the time.
3️⃣ Avoid major lifestyle changes right away, such as quitting a job, buying property, or making large gifts.
You might benefit by giving yourself several months to adjust - sometimes up to a year, to let the dust settle depending how big the windfall is.
Once you’ve handled the immediate items and given yourself some breathing room, that’s when thoughtful planning becomes valuable.
This is also the point where proactively looking for the right fee-only fiduciary financial advisor can make a meaningful difference. A good advisor won’t rush you or sell you anything. They help you see how this inheritance fits into your full financial life, protects your future, coordinates with tax and planning decisions, and can help you avoid really expensive mistakes that aren’t always obvious at first.
There is no one “right” way to handle an inheritance. The goal is to be thoughtful, well-informed, and unhurried - especially before making decisions that can’t easily be undone.
If you do nothing else at first, focus on these three things:
- Protect the money
- Understand the rules
- Give yourself time
Found this valuable? Here are some more deep dives from the Frich team 🤝
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That alone puts you on solid ground. When and if you’re ready, I can help you connect with vetted, fee-only fiduciary advisors who work this way via my Wealthramp network. You can speak with more than one, take your time, and decide what feels right for you.
Pam Krueger, Founder & CEO of Wealthramp
