Key Takeaways
- Inheriting millions of dollars is a significant and exciting milestone, but it’s crucial to have a clear plan for how you will manage this influx of wealth so that you can maximize the benefits.
- Key steps after inheriting considerable wealth include contacting a financial advisor, understanding tax implications, and conducting your own estate planning.
- It’s important to build a comprehensive financial plan that considers your financial position, plans for contingencies, and accounts for managing debts and philanthropy.
- Be sure to consult as many experienced professionals as possible, including a financial advisor, an estate planning attorney, and a probate and estate administration attorney.
Introduction
Inheriting millions of dollars or any large sum of money can be a life-changing experience, but it also raises many questions about how to manage this wealth responsibly. Taking responsible steps afterward will help you preserve this wealth for you and your heirs so you can enjoy the full fruits of your inheritance.
After inheriting millions of dollars, it’s advisable to create a comprehensive financial plan that accounts for ongoing spending, investments, contingency planning, and future goals. This guide explains in depth what steps you should take after you inherit millions of dollars so you can protect and preserve your wealth for yourself and your future heirs.
Initial Steps After Inheriting Wealth
After inheriting millions of dollars, the very next steps you take are important for setting a standard for how you manage and protect this money long term. Consider these initial steps after inheriting a considerable amount of wealth.
Contacting a Financial Advisor
A financial advisor can be an invaluable resource after you inherit a large sum of money, offering guidance on how to best manage this money. Your financial advisor will offer ideas and advice in areas such as budgeting your money, allocating your spending, making smart investments, and more.
Beneficial advisors may include:
- A certified public accountant (CPA) or tax advisor
- Investment brokers and advisors
- Real estate agents
- Insurance agents
A team of advisors will not tell you how to spend your money, but instead, they will work closely with you to help you understand all your options. Having a team of expert financial planners by your side will allow you to consider how you can use your money to maximize your long-term wealth and offer guidance along the way. You should contact these professionals as soon as possible after becoming aware of your inheritance.
Understanding Tax Implications
When you inherit substantial wealth, the tax implications of such an inheritance is often one of the first questions. In most states in the U.S., you will not have to pay an inheritance tax, no matter how much you inherit from your parents. The federal government does not impose an inheritance tax, and the vast majority of states do not collect inheritance taxes either. In fact, only six states (Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania) charge any inheritance taxes at all.
While inheritance taxes are imposed on the person who receives an inheritance, estate taxes are assessed on the estate itself before any of the assets are distributed. Estate taxes are more common than inheritance taxes, with the federal government, 12 states, and the District of Columbia all assessing estate taxes.
While you will not be required to personally pay estate taxes as the beneficiary of an estate, it’s important to understand how they work, as they can reduce the size of your inheritance. As of 2025, the federal estate tax applies to estates with values exceeding $13.99 million that are not being passed to the spouse of the deceased.
Legal Considerations and Estate Planning
A significant and unaccounted-for sum of money when someone passes away is a common cause of inheritance disputes. If you inherit a large amount of money and you have children or grandchildren to whom you can leave assets, then it’s important to create an estate plan that specifies how this money will be distributed to heirs in the future.
Failing to create an estate plan can lead to conflict in the future. If you plan on leaving assets to your heirs, a lack of an estate plan will create ambiguity around how these assets should be distributed and lead to potential disputes between your heirs. An estate plan ensures that you are able to leave assets to your heirs in line with your wishes.
Evaluating Your Financial Position
Once you bring in an inheritance, there is substantial value in understanding your current financial position to guide your next steps.
Assessing Current Assets and Liabilities
To determine your next steps for managing your new wealth, it’s a good idea to assess your current assets and liabilities. Your current asset portfolio will determine your financial flexibility. If you are in a place of financial need, then you will likely use your inheritance to address some priority needs.
Meanwhile, understanding your liabilities will play a key role in assessing where you can best direct your inherited assets. Liabilities such as a mortgage, credit card balances, student loans, and other debts may shift your financial priorities toward paying off these debts. It’s often worthwhile to use a financial windfall, such as a significant inheritance, to pay off debts and avoid having to pay future interest.
Having a complete and accurate picture of your full financial position will help you balance how to use your inheritance while also consulting a financial advisor.
Defining Short-Term and Long-Term Financial Goals
Understanding your short-term and long-term financial goals is also important for guiding you in how to use your inheritance most wisely. Consider both what your goals were prior to receiving your inheritance, as well as what you may be able to do now with more financial resources.
Common short-term financial goals may include saving for property, investing funds, growing a business, investing in a new hobby, paying down debt, or going back to school. Meanwhile, long-term goals might include sending a child to college, seeing considerable growth from investments, creating a substantial retirement account, or leaving an inheritance for your children. Defining these goals helps you build a financial plan and budget for your inherited finances.
Managing and Growing Your Inheritance
After receiving an inheritance, an important priority should be determining how to preserve these funds and foster financial growth for long-term gain.
Investment Strategies for Inherited Wealth
Take some time to consider the best options for investing your inheritance for long-term financial gain. Using your inheritance for strategic investment could bring financial growth that only increases your financial flexibility in the future, giving you more opportunity to build savings, boost your retirement accounts, and provide for your future heirs.
Investment strategies might include investing in stocks, bonds, or shares in a private business. Your investment strategy will depend on factors like the strength of the market at the time of investment, your preferred level of risk, and your financial goals. Consider consulting an investment advisor as soon as possible after receiving your inheritance so that you can start early and maximize compound growth.
Deciding Which Assets to Retain or Liquidate
If you inherit millions of dollars in assets, you may have to decide which assets to retain in their current form and which to liquidate, depending on the types of assets you inherit. Some assets you may decide to hold onto, while others you may prefer to liquidate if you can experience more financial gain.
For example, if you inherit millions of dollars worth of real estate property, you may prefer to sell these properties and invest the funds in the stock market for a larger potential long-term return. However, if you will get more personal value out of retaining the family home than selling it, you may find the potential financial gain insignificant.
Some assets, like real estate, may be more difficult to sell, while stocks or bonds may be easier to liquidate. While weighing your decision, you should consider the current fair market value of the assets, the likelihood of these assets to appreciate or depreciate in value, your current financial needs, and your long-term goals.
Building a Comprehensive Financial Plan
Although millions of dollars is a significant amount of money, one of the most common pitfalls for people who inherit significant wealth is poor planning and mismanagement of this money. The following steps are crucial to maintaining sustainable wealth.
Contingency Planning and Risk Management
Millions of dollars seems like plenty for managing risk and addressing contingencies, but without building risk management into your financial plan, you may find yourself in a situation where you have drained a considerable amount of your funds. In the excitement of inheriting millions of dollars, it can be easy to lose track of the bigger picture before it’s too late.
Failing to set aside money in an emergency fund can put you in a position of regret in the future, so it’s important to prepare for contingencies such as a market crash, a loss of employment, or unforeseen expenses. Setting money aside separately from your spending and investment accounts will allow you to ensure you have enough on hand to account for contingency expenses without jeopardizing the funds you use to sustain your lifestyle.
Debt Management Strategies
Although many people think of the expanded ability to buy new things and spend money once receiving a substantial inheritance, one of the smartest ways to use your inherited funds is to pay off any outstanding debts upfront. By paying off your debts with your inheritance before spending or investing it, you can save long-term.
Common debts worth paying include:
- Mortgage
- Credit card debt
- Student loans
- Outstanding car payments
Although it would likely be a big expense upfront, depending on the amount of debt you currently have, this initial. Paying off your debt as soon as possible means that you are able to avoid monthly or annual interest payments that would be otherwise required, saving you money long term and opening up a new door of financial freedom.
Incorporating Philanthropic Goals
After inheriting significant wealth, philanthropic contributions can be used to leave a lasting personal legacy, have a positive impact on the world, and even offer tax benefits. Including charitable giving in your budget and as part of your estate planning can allow you to spread the wealth of your inheritance.
Some beneficial estate planning tools for incorporating philanthropic goals include:
- Charitable remainder trust (CRT) – A charitable remainder trust can be created to invest assets and strategically gift the remaining assets to a designated charity.
- Lifetime giving – An individual may use portions of their financial wealth to gift to charitable organizations throughout their lifetime within their taxable estate.
- Beneficiary designations – You may designate a charitable organization as a beneficiary of a will or trust to provide a percentage of your inheritance to a valuable cause.
Consulting a skilled financial advisor can help you understand your options for charitable giving that can allow you to balance your personal goals with your philanthropic goals. An estate planning attorney may also be able to provide additional guidance on which estate planning tools can empower you to maximize your giving while minimizing your tax liabilities.
Emotional Considerations and Personal Values
A substantial inheritance is in many ways very exciting, but there are several emotional and personal impacts that one might not expect, so it’s important to prepare for these as well.
Navigating the Emotional Impact of Wealth
The idea of inheriting millions of dollars would likely be a dream for most people. However, a sudden influx of wealth can also come with significant and unexpected emotional impacts, especially at a deeply emotional time following the loss of a loved one.
Firstly, a sudden inheritance can be overwhelming, as it can be stressful to decide what to do with the money and ensure that you use the finances responsibly. Between considering how to invest your money, how to spend it, and how to budget, there is a lot to consider, especially for someone who has not had to manage significant sums of money in the past. Fortunately, a financial advisor can help simplify this process by offering their expert guidance on how you can manage the money in consideration with your financial goals.
Meanwhile, newfound wealth may cause strain in friendships and family relationships. People close to you may have their own expectations for how you should use that money. Setting boundaries, having difficult conversations, and potentially straining relationships can all be emotionally taxing as well.
Navigating these emotions carefully is crucial for being able to maintain a clear head while managing your inheritance. Seeking an abundance of professional support through financial advisors, estate planning attorneys, and even counselors can help lift some of the weight off your shoulders in the process.
Aligning Wealth with Personal Values and Legacy
For many, the adoption of wealth raises questions about how to use this money while still upholding their own personal values. The sudden acquisition of wealth does not mean that you have to jeopardize your values. You may consider donating some of your inheritance money to a charity you are passionate about, investing in a business idea you support, or leaving the money to family members or friends in need.
It’s also important to consider the wishes of the loved one who left you the money and how they would want the inheritance to be used. Think about the legacy your loved one would have wanted to leave and how your management of that inheritance will align with that. Keeping this in mind may allow you to enjoy your money while also feeling confident in your lifestyle decisions.
Lifestyle Considerations and Responsible Enjoyment
You should consider how to balance the funds you inherit with the responsible enjoyment of these funds.
Planning for Indulgences and Personal Enjoyment
It’s okay to plan for indulgences and personal enjoyment after receiving your inheritance. The money you inherit is yours to spend, and you have a right to enjoy how you spend it. However, the key is to plan to ensure that you are able to indulge without sacrificing your wealth.
Having a clear understanding of what excess funds you have available and how you can use them is vital to maintaining a sustainable lifestyle with your inherited money. It’s advisable to create a budget that considers excess spending as a category so that you have clear boundaries that align with your necessary expenses..
Balancing Expenditures with Long-term Goals
How your expenditures balance with your long-term goals should be an ongoing consideration. If you find at any point that your expenses outweigh your ability to pay for long-term needs, you might need to rein in your spending or consider other financial options.
Some questions you should consider along the way include:
- Are you debt-free?
- Do you have or want children?
- Are you planning on supporting your child through college?
- Do you have a business to invest in?
- What do you envision for your retirement plan?
- What inheritance will you want to leave for your heirs?
Budgeting is the best practice for spreading out your financial potential as far and wide as possible. Having an open discussion about your goals with your team of financial advisors can help you determine how to move forward responsibly.
Sustaining and Reviewing Your Wealth Strategy
To sustain your wealth long-term, it will be necessary to conduct periodic reviews and adjustments of your financial plans. It’s advisable to create a yearly budget each year to account for factors like current income, lifestyle circumstances, market changes, and inflation.
As you move forward with your inheritance, consider how your finances have changed over time. Are you on budget? Are your expenses outpacing your current access to finances? How does your income compare to your expenses?
Consider reviewing your wealth strategy, budget, and financial plans with your financial advisors to incorporate any advice they may have to offer and adjust as you go. It’s often a good idea to maintain a healthy balance of liquid assets, property, investments, and savings. Keeping a close eye on your financial circumstances will allow you to make the most of your inheritance and preserve your financial health well into the future.
What If Someone Contests My Inheritance?
If someone contests your inheritance, it is essential that you contact an experienced probate litigation attorney immediately. These types of cases are complex and should be handled by a knowledgeable professional who is experienced in handling inheritance disputes, in particular, rather than an estate lawyer who typically drafts wills and trusts. If you want to protect your inheritance, it’s vital to partner with a lawyer who has proven experience winning probate litigation cases in your area.
Protect Your Inheritance and Your Rights With RMO Lawyers
Significant inheritances can bring opportunity, but they can also spark conflict. Questions about a will or trust’s validity, allegations of undue influence or financial elder abuse, or disputes over how assets are managed or distributed can quickly put your inheritance and family relationships at risk.
At RMO Lawyers, we represent beneficiaries, heirs, trustees, and executors in all types of inheritance and trust disputes. Our experienced probate and trust litigation team works to protect your interests, resolve conflicts efficiently, and, when necessary, fight for you in court. Whether you are defending an estate or pursuing your rightful share, we focus on practical solutions that preserve both assets and peace of mind.
If you are facing or anticipating a dispute over an inheritance, do not wait. Schedule a consultation with the probate and trust litigation attorneys at RMO Lawyers to discuss your case and explore your best path forward.
Glossary
Decedent – An individual who has died, leaving behind estate assets, like a life insurance policy or real estate, to be distributed to beneficiaries, according to his/her wishes.
Trust – A legal arrangement in which assets are transferred to a trust during a person’s lifetime to avoid probate and manage their estate.