What should I do immediately after receiving a large inheritance?

Before making any investment or spending decisions, focus on three steps: Park liquid assets in a safe, FDIC-insured or government-backed account; gather documentation (account statements, will, trust documents, beneficiary designations); and identify an advisory team — a fiduciary wealth advisor, estate attorney, and tax professional — who can coordinate a comprehensive plan. The most important thing you can do in the first 30 days is avoid irreversible decisions.

Do I have to pay taxes on money I inherit?

In most cases, assets you inherit are not subject to federal income tax simply because you received them. However, income generated by inherited assets — such as distributions from an inherited traditional IRA or proceeds from selling inherited real estate at a gain — may be taxable. As of 2026 Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania impose a state-level inheritance tax on beneficiaries who are not immediate family members. Your CPA can model your specific obligations based on what you’ve inherited and where you live.

What is the step-up in basis, and why does it matter?

When you inherit an appreciated asset — such as stocks, real estate, or a business interest — the cost basis of that asset is generally reset to its fair market value on the date of the original owner’s death. If you sell the asset shortly after inheriting it, you may owe little or no capital gains tax, regardless of how much the original owner paid. This is one of the most significant tax benefits available to heirs, and it’s a one-time opportunity that cannot be recreated through future planning.

What are the rules for an inherited IRA?

If you inherit a traditional IRA from someone who was not your spouse, you are generally subject to the 10-year rule under the SECURE Act: The entire account must be distributed by Dec. 31 of the 10th year after the original owner’s death. If the original owner had already begun taking required minimum distributions (RMDs) before they passed, you must also take annual RMDs during years 1 through 9 — a requirement the IRS finalized in July 2024 and began enforcing fully in 2025. Surviving spouses have more flexibility and may treat an inherited IRA as their own. A wealth advisor and CPA should help you model a distribution schedule that seeks to minimize your income tax exposure across the full 10-year window.

Should I invest my inheritance all at once or gradually?

Deploying a significant inheritance as a lump sum carries real risks: market timing uncertainty, emotional regret if values decline shortly after investment, and the potential to disrupt your existing asset allocation. A phased deployment — often over six to 18 months — may help reduce those risks while still putting your capital to work. Your wealth advisor should evaluate any deployment strategy in the context of your full financial picture, including your existing portfolio, tax situation, time horizon, and goals.

How do I update my estate plan after receiving an inheritance?

Receiving a significant inheritance is a triggering event for estate plan review. Work with your estate planning attorney to revisit your will, revocable trust, powers of attorney, and beneficiary designations to ensure they reflect your updated financial picture and current intentions. Depending on your net worth, you may also want to explore trust structures — such as spousal lifetime access trusts or irrevocable life insurance trusts — that can help protect and transfer your expanded wealth efficiently. The OBBBA permanently increased the federal estate and gift tax exemption to $15 million per individual effective Jan. 1, 2026, providing meaningful planning runway for families at this wealth level.

What is sudden wealth syndrome, and how do I avoid it?

Sudden wealth syndrome describes the financial and emotional stress that can accompany an unexpected or significant windfall — including an inheritance. Research shows that inherited dollars are dissipated faster than other forms of wealth — often because heirs act quickly, without a plan, and without professional guidance. An effective protection is a structured planning process: Pause before acting, assemble a coordinated advisory team, and take the time to align your financial decisions with your values and long-term goals.

Do I need a financial advisor to manage an inheritance?

While working with a wealth advisor after receiving an inheritance is not a legal requirement, the complexity of the decisions involved — tax planning, investment deployment, retitling, estate plan coordination, inherited IRA distribution strategy — makes professional guidance highly valuable. Look for a fee-only fiduciary advisor who is legally obligated to act in your best interests and who has experience with inherited wealth, estate coordination, and tax-sensitive investment management. Mercer Advisors offers comprehensive financial planning that coordinates across investment management, tax planning, and estate strategy — contact us at merceradvisors.com to arrange a complimentary consultation.

Sudden Wealth Inheritance Playbook

Introduction: When Sudden Wealth Arrives

The generation known as Baby Boomers (born between 1946 and 1964) holds an estimated $93 trillion in assets, and the largest generational wealth transfer in American history is already underway.¹ Over the next two decades, that wealth will move through estates, trusts, and direct inheritances. The heirs who receive significant assets may have little experience managing a sum of this magnitude. If you’re one of them, or expect to be, you’re navigating a time that is simultaneously financial, legal, emotional, and deeply personal.

The top 1% of households receive average inheritances of nearly $719,000, while roughly 70%-80% of U.S. households will never receive any inheritance at all.²

Research also shows that inherited dollars are spent or dissipate faster than other forms of wealth³. It’s a pattern that underscores just how critical the first year after receipt is.

This playbook is designed for families who have accumulated meaningful wealth and are now navigating a large inheritance — whether from a parent, a spouse, or a family trust. It won’t tell you how to feel. It will offer advice on what to do, in what order to do it, and why so that the wealth you’ve received can work as hard for your future as the person who built it intended.

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The Inheritance and Sudden Wealth Playbook: First 90 Days + 12 Months

The top 1% of households receive average inheritances of nearly $719,000, while roughly 70%-80% of U.S. households will never receive any inheritance at all.²

About Mercer Advisors

Explore Our Solutions

Want to learn more about Mercer Advisors?

The Inheritance and Sudden Wealth Playbook: First 90 Days + 12 Months

Introduction: When Sudden Wealth Arrives

The top 1% of households receive average inheritances of nearly $719,000, while roughly 70%-80% of U.S. households will never receive any inheritance at all.2

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The top 1% of households receive average inheritances of nearly $719,000, while roughly 70%-80% of U.S. households will never receive any inheritance at all.²