I Just Inherited Money. What Should I Do? A Step-by-Step Guide for the First 90 Days

Researchers at Ohio State University found that one in three Americans who receive an inheritance end up with negative savings within two years of receiving it. A more recent study from Texas Tech University and the University of Alabama found that 42% of heirs had their net worth fall back to or below their pre-inheritance level within approximately 12 months. For inheritances under $10,000, the spend-through rate climbs even higher.

This is not a judgment. It is a warning about something well-documented and entirely preventable. The people who keep and grow their inheritances almost always follow one principle: they slow down first.

Do not invest, spend, give, or loan a single dollar for at least 60 to 90 days. Move the inheritance into a high-yield savings account (HYSA) earning 4-5%, or purchase short-term U.S. Treasury bills if the amount exceeds FDIC insurance limits ($250,000 per institution). The money needs to be safe, liquid, and not going anywhere while you think clearly.

The estate settlement can take up to a year. This gives you time to think about how to make the most of your inheritance and meet with your advisor to build an investment plan. It is important to take your time throughout the grieving process and avoid making an impulsive decision with your inheritance.

A 90-day financial planning guide developed by PYA Waltman Capital recommends using this period to gather documents, understand exactly what you have inherited, and identify any asset-specific rules that apply, especially for inherited retirement accounts, which carry strict distribution timelines under the SECURE Act 2.0.

Different types of inherited assets carry different tax treatments, and the differences are significant. Knowing what you have before you move it is not optional: it is how you avoid handing a large portion of your inheritance to the IRS unnecessarily.

Cash / Bank Accounts: Generally not subject to federal income tax. May be subject to state inheritance tax in 6 states (PA, NJ, MD, NE, KY, IA). No federal inheritance tax exists.

Inherited IRA or 401(k): Non-spouse beneficiaries must empty the account within 10 years (SECURE Act 2.0). Every dollar withdrawn is ordinary income: a $300k inherited IRA creates a significant tax event spread across 10 years.

Inherited stocks / brokerage accounts: Receive a 'stepped-up' cost basis: the value on the date of death becomes your new cost basis, eliminating all capital gains that accrued during the original owner's lifetime. Selling shortly after inheriting often generates minimal or zero capital gains.

Inherited real estate: Also receives stepped-up basis. If the home was worth $400k when the owner died and you sell it for $410k, you owe capital gains tax only on the $10k difference. The decades of appreciation before death are not taxed to you.

Inherited annuities: Gains inside the annuity are fully taxable as ordinary income to the beneficiary, often the least tax-efficient asset to inherit. Consult a CPA before making any distributions.

Life insurance death benefit: Generally income-tax-free to the named beneficiary. No action required, just collect the claim from the insurer.

Before you invest, donate, loan, or spend any portion of your inheritance, hire a CPA who works with inheritance and estate situations. Your goal in this first meeting is simple: understand your total tax liability for the current year and the next, and identify whether any tax elections or deadlines apply to your specific assets.

For inherited IRAs, the 10-year distribution window means you have strategic choices about when to take withdrawals, and the wrong timing can push you into a higher tax bracket every single year. A CPA can map out the most tax-efficient drawdown schedule based on your total income picture.

Once your tax picture is clear, build a three-person professional team:

A fee-only fiduciary financial advisor: search NAPFA (napfa.org/find-an-advisor) to find advisors who are paid directly by you, not by commissions from product sales. Ask: 'Are you a fiduciary at all times? Are you fee-only?'

A CPA specializing in high-net-worth or estate situations: for ongoing tax strategy, not just the one-time receipt

An estate planning attorney: to update your own will, trusts, and beneficiary designations to reflect your new financial reality. An inheritance you receive this year could become part of your own estate tomorrow.

With your team in place, deploy the inheritance in this order:

High-interest debt first: any credit card or personal loan above 8-10% interest rate. Eliminating 20%+ interest is the safest guaranteed return available.

Emergency fund: three to six months of living expenses in liquid savings. If you are self-employed or have variable income, target six to twelve months. This protects your long-term investments from being interrupted by life.

Max retirement accounts: use the inheritance to replace the living expenses your income normally covers while you maximize your 401(k), IRA, or Roth IRA contributions for the year.

Review and update your own estate plan: including life insurance coverage, beneficiary designations, and powers of attorney.

Here is a perspective that often gets lost in the practical guidance: this money is a legacy. Someone worked for it, protected it, and chose to leave it to you. The most meaningful thing you can do with it is let it change the trajectory of your life, not just fund a brief upgrade in lifestyle.

For a growing number of inheritance recipients, that means considering entrepreneurship as a long-term destination. 66.3% of entrepreneurs fund their startups with personal capital. An inheritance (even a modest one) can represent the difference between a business that never got started and one that fundamentally changes your financial future.

That conversation does not have to happen in the first 90 days. It should not happen in the first 90 days. But it is worth putting on the table as a question worth answering when you are ready: what would I build if capital were not the limiting factor? If you want a structured framework for exploring that question, UnleashYourIdeas.com was designed for exactly that moment.

The inheritance is not going anywhere while you think. What destroys inheritances is speed and emotion, not time and clarity. Give yourself the gift of a real plan, and let this money become a turning point rather than a footnote.