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Smart Steps to Manage Inherited Wealth Effectively
- Todd Pouliot
- 4 days ago
- 4 min read
Inheriting money can feel like a sudden windfall, a blessing wrapped in opportunity. But it can also bring a mix of emotions and questions. What do you do next? How do you make sure this gift lasts and grows? If you’ve ever found yourself wondering, " I just inherited money, what should I do?, you’re not alone. Managing inherited wealth effectively is about more than just spending or saving—it’s about creating a plan that respects your goals, your family’s future, and the tax implications that come with it.
Let’s walk through some smart steps to help you take control of your inheritance with confidence and clarity.
How to Manage Inherited Wealth Effectively
The first thing to remember is that inherited money is a resource, not a windfall to be rushed. Managing it effectively means taking a thoughtful, measured approach. Here’s how to start:
1. Take a Breath and Assess
Before making any decisions, pause. Gather all the information about what you’ve inherited. Is it cash, stocks, real estate, or a mix? Are there any debts or taxes owed on the inheritance? Understanding the full picture is crucial.
2. Get Professional Advice
This is where a fiduciary financial planner, CPA, and estate attorney can be your best friends. They work together to create a holistic plan that aligns your investments, tax strategy, and estate planning. This team approach ensures you don't miss anything important.
3. Create a Financial Plan
With your advisors, develop a plan that fits your life goals. Do you want to grow the money, preserve it, or use it for specific purposes, such as education or buying a home? A clear plan helps you avoid impulsive decisions.
4. Understand Tax Implications
Inherited money can come with tax responsibilities. Some assets may be subject to estate, capital gains, or income tax. Knowing what you owe and when helps you avoid surprises.
5. Protect Your Inheritance
Consider insurance, trusts, or other legal tools to protect your inheritance from creditors, lawsuits, or even future family disputes. There are some very inexpensive routes to take, such as proper beneficiary designation and account titling.
6. Keep Emotions in Check
It’s natural to feel emotional about inherited money. But try to separate feelings from financial decisions. This helps you make choices that serve your long-term security.
What Not to Do When Inheriting Money?
It’s just as important to know what to avoid as it is to know what to do. Here are some common pitfalls:
1. Don’t Rush to Spend
It’s tempting to splurge or make big purchases right away. But impulsive spending can quickly erode your inheritance. Give yourself time to plan.
2. Avoid Ignoring Taxes
Failing to understand or plan for taxes can lead to costly penalties. Don’t assume the money is “tax-free.” Get clear guidance.
3. Don’t Mix Inheritance with Everyday Money
Keep your inherited funds separate from your regular checking or savings accounts. This helps you track and manage it properly.
4. Don’t Go It Alone
Trying to manage a large inheritance without professional help can lead to mistakes. A coordinated plan with experts ensures your money works for you.
5. Avoid High-Risk Investments Without Guidance
Chasing quick returns can be tempting, but it’s risky. Stick to a diversified, well-thought-out investment strategy.
Building a Tax Plan in Plain English
Taxes can feel like a maze, but they don’t have to be confusing. Here’s a simple way to think about it:
Estate Taxes: These are taxes on the total value of the estate before it’s distributed. Depending on where you live and the size of the estate, this might apply.
Inheritance Taxes: Some states charge taxes on what you receive. Know your state’s rules.
Capital Gains Taxes: If you sell inherited assets like stocks or property, you might owe taxes on the gains.
Income Taxes: Certain inherited assets, like retirement accounts, may have income tax implications when you withdraw money.
A flat-fee fiduciary financial planner with in-house CPA and attorney expertise can explain these in plain English. They’ll help you create a tax plan that fits your situation, so you keep more of what you’ve inherited.
Creating a Family-Office Experience Without the $10M Minimum
You might think that a family office - a dedicated team managing wealth, taxes, and estate planning - is only for ultra-high-net-worth families. But it doesn’t have to be that way.
A coordinated, fee-only fiduciary team can provide a family-office experience tailored to your needs, even if your inheritance is below the typical $10 million threshold. This means:
Integrated Planning: Investments, taxes, and estate strategies all aligned.
Full Transparency: Flat fees with no hidden costs.
Personalized Service: A team that understands your goals and values.
Long-Term Security: Planning that looks beyond today to protect your family’s future.
This approach helps you avoid fragmented advice and conflicting strategies. Instead, you get a clear, unified plan.
Taking the Next Step with Confidence
If you’re asking yourself, "I just inherited money, what should I do?", the best answer is to start with a plan. Don’t let uncertainty or emotion drive your decisions. Instead, take these smart steps:
Pause and gather information.
Seek trusted, professional advice.
Understand your tax responsibilities.
Create a clear financial plan.
Protect your inheritance for the long term.
Remember, managing inherited wealth effectively is about building a foundation for your future and your family’s future. With the right guidance and a steady approach, you can turn this inheritance into lasting security and opportunity.
Your next step? Reach out to a fiduciary financial planner who can help you get started on a coordinated plan that fits your life and goals. You don’t have to navigate this alone. A firm like Gateway Financial, where you can learn more about them here, MyGatewayMoney.com, or book a time on their calendar.
Smart, simple, and steady - that’s how you turn inherited money into a lasting legacy.
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