Losing a loved one is never easy. On top of the emotional weight of grief, you may now find yourself faced with the responsibility of managing an inheritance. It can feel overwhelming—how do you honor the gift they left you while also making wise decisions for your future? If you’re unsure of where to start, take a deep breath. You don’t have to have all the answers right away. The guidance below can help you navigate this transition with care and thoughtfulness.

1-Allow Yourself Time to Grieve

It’s important to acknowledge that this is an emotional time. The weight of loss can cloud decision-making, and you may not be ready to take immediate action. If possible, give yourself time before making major financial decisions. There is no rush—most financial matters can wait while you process your loss. When you’re ready, take things one step at a time.

2-Keep Inherited Assets Separate

It may not be the first thing on your mind, but keeping inherited assets separate from marital or joint finances is a practical safeguard. While no one plans for a divorce, life is unpredictable. If you choose to use part of your inheritance for shared expenses, consider maintaining a separate account for the remainder. This allows you to preserve the financial gift your loved one left for you.

3-Take Care of Debts and Immediate Financial Needs

If you have debts weighing on you, an inheritance can be an opportunity to relieve financial stress. Paying off high-interest debt, like credit cards or personal loans, can create breathing room and long-term stability. However, be sure to balance debt repayment with maintaining an emergency fund so that you don’t find yourself in a difficult financial position later.

4-Reflect on Your Financial Goals and Needs

During a time of loss, thinking about the future can be difficult, but setting financial goals can bring clarity and direction. Take a moment to envision what financial security looks like for you.

Ask yourself:

• Do I have enough savings to cover unexpected expenses?
• Are there repairs or updates to my home or car that I’ve put off?
• Do I want to take time off work to grieve or transition to a new career?
• Are there meaningful causes or loved ones I’d like to support?
• What would bring me peace and stability?

Writing down your thoughts can help you prioritize and create a plan that aligns with your needs and values.

5-Take Care of Yourself First Before Helping Others

You may feel an urge to share your inheritance by helping family members or donating to causes your loved one cared about. While generosity is a beautiful way to honor their memory, it’s important to make sure your own financial well-being is secure first. Just like in an airplane, you must put on your own oxygen mask before assisting others. Ensuring your financial stability now may allow you to give more meaningfully in the future.

6-Be Mindful of Taxes

Certain inherited assets—like retirement accounts—may come with tax implications. For example, if you inherit an IRA, you may be required to take annual distributions, which could increase your taxable income. If you’re unsure how your inheritance will affect your taxes, consulting a financial advisor or tax professional can help you make informed decisions.

7-Understand the Difference Between Saving and Investing

You may wonder whether to keep your inheritance in a savings account or invest it. Understanding the difference is key:

• Saving is best for short-term needs and emergency funds. Savings accounts are secure and easily accessible, but they earn little interest.
• Investing is for long-term financial growth. Investing in stocks, bonds, or mutual funds carries risk, but it also offers the potential for higher returns over time. If you’re unfamiliar with investing, speaking with a financial professional can help you determine the best approach for your situation.

8-Be Cautious with Large Purchases

It’s natural to want to use part of your inheritance to improve your life—whether that means traveling, buying a new car, or making home improvements. While these can be worthwhile, it’s important to make decisions thoughtfully. Many people who come into sudden wealth end up spending it quickly and regret it later. Before making big purchases, consider how they fit into your long-term financial goals.

9-Seek Trusted Guidance

If you’re feeling uncertain, you don’t have to navigate this alone. A financial advisor who is a fiduciary (meaning they are legally required to act in your best interest) can help you understand your options and make informed choices. They can provide insight into budgeting, investing, and tax strategies that align with your goals.

Honoring Your Loved One’s Legacy

An inheritance is more than just money—it’s a final gift from someone who cared about you. Managing it wisely is a way to honor their memory and create a stable, fulfilling future for yourself. Take your time, seek guidance when needed, and trust yourself to make decisions that reflect both your needs and their love for you. Your future self will thank you.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party information and may become outdated or otherwise superseded without notice. Third-party information is deemed reliable, but its accuracy and completeness cannot be guaranteed.