Step one: do nothing hasty. Park inherited funds in a safe account for 3-6 months while you grieve and plan. Then work with a financial advisor and CPA to understand tax implications (inherited IRAs require 10-year distribution, PA inheritance tax ranges from 0-15%), update your financial plan, and invest strategically. The biggest mistake is making irreversible decisions during an emotional period.
Park inherited funds in a money market or savings account for 3-6 months while you grieve and plan. There is no rush. Making major financial decisions during emotional stress almost always leads to regret.
Different inherited assets have different tax rules. Inherited IRAs now require distribution within 10 years (SECURE Act). Inherited Roth IRAs also require 10-year distribution but withdrawals are tax-free. Inherited real estate receives a stepped-up cost basis. PA inheritance tax applies at 0-15% depending on your relationship to the deceased.
Work with a financial advisor, CPA, and estate attorney to coordinate decisions. The tax implications of inherited retirement accounts alone can be complex enough to require professional guidance — and mistakes are often irreversible.
An inheritance changes your financial picture. Update your retirement projections, insurance needs, estate plan, and tax strategy. You may be able to accelerate retirement, fund education goals, or reduce debt — but only if you plan before you spend.
Once the dust settles, develop a long-term investment strategy for the inherited assets that aligns with your updated financial plan. Consider your existing portfolio, tax situation, time horizon, and risk tolerance. Avoid the temptation to treat inherited money differently than earned money.
Many people find meaning in using a portion of inherited wealth for something the deceased valued — a charitable donation, a family experience, or an investment in the next generation's education. This is personal, but it can help the inheritance feel purposeful rather than merely transactional.
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There is no rush — but having a plan matters. Schedule a free, confidential consultation to understand your options.
