Receiving an Inheritance

When you are ready, put a plan in place for your inheritance that empowers you to spend intentionally and invest wisely.

  1. Potential Direct Financial Impact

    • Potential lump sum windfall or investments from the inheritance distribution
    • Potential step up in cost-basis on inherited investments and properties if transferred at death.
    • State inheritance tax (depending on the state)
    • Any capital gains taxes on assets that did not receive a step up in basis and/or if transferred before death
  2. Potential Secondary Impacts

    • The need to consider any long-term maintenance costs (ie. insurance and property taxes) on your monthly cash flow if you make a major purchase like a car or property or keep inherited property or other ‘functional assets’.
    • Any changes to your net worth and/or balance sheet based on how you allocate your inheritance.
    • The potential need to consider how to create stable sources of income from your inheritance.
    • The need to put a comprehensive financial plan in place to put your inheritance to work to avoid spending it down in a few years.
  3. Self Completion/Execution Risks

    • Spending down your inheritance carelessly
    • Lost growth opportunity on dollars that could have otherwise been saved or invested
    • Making major purchases without considering the long-term costs associated with them (ie. registration fees, insurance, etc.)
    • Lending money to friends or family
    • Not optimizing your inheritance for tax-efficiencies
    • Not paying appropriate inheritance taxes.
    • Not safeguarding your new found wealth with estate planning documents.
  4. Situations where expertise adds the most value

    • Tax Adviser
      Working with a tax adviser to understand your new tax situation (including potential state inheritance taxes) and ways to minimize capital gains is highly recommended. Additionally, a tax adviser may be able to help you understand the cost basis of any inherited assets and work with you to put a strategy in place to create tax efficiencies for your inheritance.
    • Legal Adviser
      Consulting a trust and estate attorney can help protect and safeguard your wealth and if you plan to transfer a portion of the inheritance to your heirs.
    • Financial Adviser
      Working with a financial adviser may be particularly helpful to determine the role your inheritance may play in your overall financial plan as you balance your short, mid and long-term goals. Additionally, a financial adviser may be able to help you decide whether to continue holding any inherited assets that are invested or sell them.

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Working with us

We’ll start by working with you to create a personal balance sheet and current financial outlook. From there, we present a curated list of Financial Advisers, CPAs, and Trust & Estate Attorneys from which you can choose.

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