I Just Inherited Money: The First 7 Things to Do Before You Touch a Dollar

Last verified: April 28, 2026
Primary sources: IRS Rev. Proc. 2025-32; Treas. Reg. §1.401(a)(9)-5 (final regs, July 19, 2024); IRC §1014; IRC §2032.

Just inherited money? Don't spend, move, or invest a dollar of it for the first 60 to 90 days. The seven steps below are the difference between an inheritance that compounds for the next 30 years and one that's half-gone in five. I've seen both. The variable isn't how much you inherited. It's what you do in the first 90 days.

Quick context. We're at the front edge of the largest wealth transfer in U.S. history. Cerulli Associates pegs it at $84 trillion moving from Boomers to their heirs and charities through 2045. Most of the people now inheriting have never had a sum like this before. Almost nobody got taught how to receive it. The damage in those first 90 days is mostly self-inflicted, and almost all of it is preventable.

Step 1: How long should I wait before making any major financial decisions?

At least 60 to 90 days for anything reversible. A full 6 to 12 months for anything you can't take back. Selling Mom's house. Leaving your job. Paying off the mortgage. "Lending" to your brother. Buying a new car. Wait on all of it.

Here's why this matters, and it isn't what you think. It isn't financial. It's neurological. You're inside an acute grief response right now. The part of your brain that does cost-benefit analysis (the prefrontal cortex) is running impaired. Meanwhile, every salesperson in the orbit of the estate has a reason to make you move fast. Real estate agents. "Advisors" who suddenly know your phone number. The annuity guy who sold your dad his contract in 1998.

The most expensive thing you can do in month one is take an irreversible decision and execute it before you can think. There's no penalty in the tax code for waiting. Inherited assets don't decay because you took 90 days to think it through. The estate isn't going to vanish. Probate doesn't need an answer this week. The deadline pressure you're feeling is almost always coming from someone who needs you to move before you can think clearly.

Write this on a sticky note: "Decision-free zone until [date 90 days from now]." Then do nothing.

Step 2: How many certified death certificates do I actually need?

At least 10. Order them through the funeral home in the first week. Most heirs guess way low.

Every brokerage. Every bank. Every life insurance company. The retirement plan administrator. Social Security. The IRS. The county recorder for any titled real estate. The DMV for vehicles. Each one is going to want an original certified copy, not a photocopy. They will literally hand a photocopy back to you.

Ten is the floor for a moderately complicated estate. If your parent had multiple brokerage accounts, properties in more than one state, or a small business, order 15 to 20. They run $15 to $25 a copy. Running short and re-ordering them later from the state vital records office takes 4 to 8 weeks per request, and every transfer you're trying to complete will sit and wait.

While you're at it, get the original wet-ink will out of the safe deposit box. (You'll need court letters to access the box if you're not a co-signer, by the way. Find that out now, not later.) Find the trust binder. Pull every most-recent statement on every account. You can't inventory what you can't find.

Step 3: What documents do I need to pull together before I do anything else?

Build one binder, paper or digital, before you talk to a single advisor or attorney. Here's what goes in it:

• The original will and any codicils
• • The full trust document and any amendments
• • Beneficiary designation forms for every retirement account, IRA, life insurance policy, and annuity
• • The most recent statement for every brokerage, bank, IRA, 401(k), pension, and HSA
• • Deeds for every piece of real estate, plus the most recent property tax bill and any mortgage statement
• • The decedent's last two years of federal and state tax returns
• • A list of all life insurance policies, including any employer-paid group life
• • Titles to vehicles, boats, and any registered property
• • Business ownership documents (LLC operating agreement, S-corp shareholder agreement, partnership agreement)
• • A list of all known liabilities (mortgages, lines of credit, medical bills, credit cards)

The non-obvious one is the beneficiary designation forms. Here's what most people don't realize: the beneficiary form on file with the custodian controls the asset, not the will. A 401(k), an IRA, a life insurance policy. They go to whoever's named on the form, even if the will says someone else. So tracking these down early tells you which assets bypass probate entirely (most of them, if your parent's planning was decent) and which get stuck in court for 6 to 18 months.

Step 4: Should I use my parents' financial advisor or hire my own?

Hire your own. I know that's awkward. Your parents had a relationship with that person. They might've liked him. He might've sent a Christmas card every year. None of that matters here.

You need a fee-only fiduciary registered investment advisor. Not your parents' commission-based broker. Not the "wealth manager" at their bank. And definitely not the insurance salesperson who sold them their annuity in 1998. The advisor your parents used was selected for your parents' situation. Often, he was selected for the products that paid him the highest commissions back then. That isn't your situation.

Your team is three people.

1. A fee-only fiduciary investment advisor. Verify any advisor's registration and disciplinary history at the SEC's Investment Adviser Public Disclosure database before the first meeting. "Fee-only" means they're paid by you, in dollars, transparently. They earn nothing from product sales. "Fiduciary" means they're legally required to put your interest first. If you can't get both words on the record, walk.

2. A CPA who handles estates. Not your parents' tax preparer. Estate tax returns (Form 706), the step-up in basis reset, and the income-in-respect-of-a-decedent rules on inherited retirement accounts are specialty work. The CPA also tells the executor whether to elect the alternate valuation date under IRC §2032, which lets the estate value assets six months after death instead of at the date of death. That election can save real money when the estate is near the federal exemption and asset values dropped.

3. An estate attorney in the state where probate's happening. They handle the court filings, manage creditor claims, and untangle anything weird in the will or trust.

Why not just keep your parents' advisor? I wrote a separate piece on that in Should I Keep My Parents' Financial Advisor After They Die? The short version: you're inheriting a portfolio that was designed for a 78-year-old in distribution mode. You're not 78. You're not in distribution mode. Build the team for your life, not theirs.

Step 5: How do I figure out the tax treatment of what I just inherited?

Sort everything into one of these buckets. The bucket determines the urgency, the strategy, and what the inheritance is actually worth after tax.

Here's the big idea most heirs miss. A $1 million taxable brokerage account and a $1 million Traditional IRA aren't worth the same to you. Not even close.

The brokerage account is roughly $1 million after tax thanks to the step-up. Sell it the day after the funeral and you'd owe almost nothing in capital gains. The Traditional IRA, drained over 10 years on top of your existing wage income? Easily $700,000 after federal and state tax. Sometimes less, if you're in a high-tax state and a high bracket. The composition of the inheritance matters more than the headline number.

Five states still tax inheritance in 2026: Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Iowa fully repealed its inheritance tax effective January 1, 2025. Maryland's the weird one. It's the only state with both an estate tax and an inheritance tax. Top marginal rates run from 10% in Maryland to 16% in Kentucky and New Jersey, per the Tax Foundation 2025 data. The heir owes the inheritance tax, not the estate. The rate often depends on how you were related to the decedent. Children typically pay the lowest rate. Unrelated heirs (a friend, a partner you weren't married to) pay the highest.

Federal estate tax only matters if the estate is over $15 million per person or $30 million per couple for 2026 deaths. That's under the One Big Beautiful Bill Act and Rev. Proc. 2025-32. Most of you reading this won't hit it. State estate taxes in roughly a dozen states have far lower thresholds, though, and that's where most of the planning leverage actually is.

Step 6: How does the inherited IRA 10-year rule actually work?

If you inherited a Traditional IRA, 401(k), or 403(b) from a non-spouse who died on or after January 1, 2020, and you're not what the IRS calls an "eligible designated beneficiary" (a minor child of the decedent, a disabled or chronically ill person, or someone less than 10 years younger than the decedent), the entire account has to be drained by December 31 of the tenth calendar year following the year of the decedent's death.

That's the SECURE Act / SECURE 2.0 10-year rule. The IRS finalized the regs on July 19, 2024.

Here's the trap most heirs miss. If your parent had already started taking RMDs in their lifetime (Required Beginning Date is age 73 under current law), then you have to take annual RMDs in years 1 through 9 based on your own single life expectancy AND drain the rest by year 10. Both. The IRS waived the missed-RMD penalty for tax years 2021 through 2024 while the regs were getting finalized, but enforcement is on for 2025 forward. If you missed an RMD for 2025, the excise tax under IRC §4974 is 25% of the missed amount, dropping to 10% if you fix it timely.

If your parent died before their Required Beginning Date, the 10-year drain still applies, but you don't owe annual RMDs in years 1 through 9. You can technically defer the entire distribution to year 10. Don't. Bunching ten years of distributions into one year almost always slingshots you into the top federal bracket.

What works for almost every non-spouse heir is mapping a 10-year distribution schedule that fills in the brackets you'd otherwise leave unused. Distribute more in low-income years. Distribute less in high-income years. A sabbatical year, a year between jobs, the early years of starting a business. Those are the years to take more. This is where a competent CPA and a fiduciary advisor pay for themselves several times over. The full walk-through is in The Tax Bomb Hidden in Inherited Pre-Tax Retirement Accounts.

Surviving spouse? Your situation is different. You have four options nobody else has. Roll the IRA into your own. Treat the inherited IRA as your own. Stay a beneficiary on the inherited IRA and take stretch RMDs on your single life expectancy. Or (this one's new under SECURE 2.0) elect to be treated as if you were the decedent for RMD purposes. The spousal rollover is usually right if you're under age 59½ and don't need the money. But watch the "hypothetical RMD" trap. If you start with the 10-year rule and switch to a spousal rollover later, you have to retroactively make up any RMDs you would've taken.

Step 7: Should I tell people I inherited money?

Almost no one. The list of people who actually need to know is short: your spouse, your CPA, your attorney, and your fee-only advisor. That's it. Not your siblings (especially not your siblings). Not your friends. Not your social network.

Sudden wealth attracts predictable problems. Family members surface with "loans" that aren't loans. Old friends pitch business ideas. Charities you've never donated to find your name. Your social-media posture starts to read differently, even if you're not trying to. The people in your life adjust their expectations of what you'll cover.

You've probably heard the stat that 70% of lottery winners go bankrupt within a few years. That number isn't actually backed by research. It traces back to a 2001 think-tank discussion at the National Endowment for Financial Education, and NEFE has publicly disavowed the claim. Skip the urban legend. Use the real data instead.

A peer-reviewed study in the Review of Economics and Statistics tracked roughly 35,000 Florida lottery winners who won between $50,000 and $150,000. About 1,900 of them (5.4%) filed for bankruptcy within five years. That's almost twice the rate of non-winning Florida residents matched on income. Bigger jackpot winners file at meaningfully higher rates than small-prize winners.

The pattern's the same every time. Windfall arrives. Lifestyle expands to absorb it. Lifestyle doesn't shrink back when the principal runs low. Household ends up with debt-funded expenses on a base that can't support them. The only reliable way to stop this is to keep the inheritance invisible. Invisible to other people, and invisible to your own day-to-day spending. Until you have a plan. The longer-form on this is in The "Sudden Wealth Effect" and How to Avoid Going Broke Anyway.

What do I do with the cash in the meantime?

Park it. While you're working through steps 1 through 7, the inherited cash, the proceeds of any sold securities, and any life insurance death benefit go in one of two places. A high-yield savings account at an FDIC-insured bank (yields are around 4% in early 2026) or a Treasury money-market fund. You earn a market interest rate. The principal doesn't move. You keep every option open.

Don't let any advisor pressure you into "putting it to work" in month one. Your job in the first 90 days isn't to optimize. It's to not lose ground. When you're ready (typically 60 to 90 days in, with the team hired, the documents inventoried, the tax buckets sorted, and the 10-year clock projected), then you build the actual investment plan. That's a different article. This one ends here, with the cash safely parked, the decisions deferred, and the irreversible mistakes avoided.

About the author

Kurt Altrichter, CRPS, is the founder and Chief Investment Officer of Ivory Hill, LLC, a fee-only fiduciary registered investment advisory firm based in Edina, Minnesota. He specializes in wealth management for business owners and high-net-worth individuals navigating major financial transitions including inheritance, business sales, and retirement plan design. Kurt is an Investment Adviser Representative under Life Inc. Retirement Services.

To discuss your inheritance or wealth planning situation, contact Kurt at kurt@ivoryhill.com or visit ivoryhill.com.

Apply to work with Kurt https://calendly.com/ivoryhill/discovery

Disclosure

The information provided in this article is for educational purposes only and should not be construed as personalized investment, tax, or legal advice. Tax laws and inheritance rules are complex and depend on individual circumstances. Consult with a qualified financial advisor, CPA, and estate attorney before making decisions involving inherited assets. Ivory Hill, LLC is a registered investment adviser. Investment Adviser Representative services offered through Life Inc. Retirement Services.