What should I do first when I inherit money?

Slow down. Most financial decisions that feel urgent are not. Before making any investment decisions, map what you have actually inherited — what accounts exist, how they are titled, what the tax implications are, and what decisions need to happen now versus what can wait. The most expensive mistakes with inherited wealth almost always come from rushing.

What is stepped-up basis and why does it matter?

Under IRC Section 1014, when you inherit an asset, the cost basis is typically reset to fair market value at the date of the original owner's death. If you sell shortly after inheriting, capital gains exposure may be minimal or zero — even on assets that had appreciated significantly over decades. This is one of the most valuable and least understood tax provisions available to heirs. The window to use it does not last indefinitely.

What is an inherited IRA and how does it work?

An inherited IRA is a retirement account you receive after the original owner passes away. The rules around distributions — when you must take money out and how much — changed significantly under the SECURE Act. Decisions made in the first year or two can have meaningful tax consequences for years to come. Coordinating with a CPA before taking any distributions is essential.

Should I use my parent's financial advisor after they pass?

Not automatically. Your parent's advisor was managing money for someone at a different life stage with different goals and a different tax picture. Evaluate the relationship on your own terms — is this person a fiduciary, how are they compensated, and will they communicate proactively? Loyalty to a history you were not part of is not a reason to stay.

How do I avoid making rushed financial decisions after losing a parent?

Give yourself permission to slow down and find someone who will help you identify what actually needs to happen now versus what can wait. The investment portfolio can sit in a conservative position while you get oriented. The family home is not going anywhere. A few decisions are genuinely time-sensitive. Most are not. Knowing the difference is the first job.

How should I invest an inheritance?

A phased approach works best — invest a portion immediately into a diversified portfolio, and hold the remainder in short-duration fixed income while your full plan takes shape. This protects you from making a large irreversible allocation decision before you are ready, while ensuring the money is working rather than sitting idle in cash.

What do I do with an inherited family home?

Get the full financial picture first — stepped-up basis, carrying costs, rental option, net proceeds from a sale. Then give yourself the time you actually need to decide. The home is not going anywhere, and a decision made under pressure or grief is rarely the right one. The goal is clear information and a real deadline — not a rushed sale, and not indefinite deferral.

What should I do with my RSUs when they vest?

The most common mistake is doing nothing — letting shares accumulate without a plan. The decision of whether to sell, hold, or diversify should be made before vesting, not after. For most people with significant equity compensation, having a systematic sell strategy that reduces concentration over time is the right starting point.

How much company stock is too much?

There is no universal rule, but when a single stock represents more than 10 to 15 percent of your investable net worth, concentration risk becomes real. At 40 percent, a bad earnings quarter or a sector downturn can meaningfully set back years of careful saving. The goal is not to own zero — it is to own an intentional amount, not an accidental one.

Is the life insurance through my employer enough?

For most high earners with a spouse, a mortgage, or kids — no. Employer group coverage is typically one to two times your salary, which covers months of income, not years. It is also not portable — if you leave the company, you lose it. A private term policy locked in while you are young and healthy is usually the right foundation.

What is an HSA and why does it matter for high earners?

A Health Savings Account is the only account that is triple tax-advantaged — contributions reduce your taxable income, growth is tax-free, and withdrawals for medical expenses are tax-free. Most people spend it on current medical costs. Invested and left to grow, it becomes a significant tax-free reserve for healthcare costs in retirement — one of the most underestimated expenses people face later in life.

What does a fee-only financial planner actually do differently?

A fee-only financial planner is paid only by you — no commissions, no product revenue, no incentive to recommend anything except what is best for your situation. The practical difference is coordination: tax planning, investment strategy, insurance, and cash flow all connected rather than managed in isolation. That coordination is what most high earners are missing, and what most commission-based models do not provide.

When is the right time to start financial planning?

Earlier than feels necessary. The decisions that matter most compound over time in both directions. Starting in your mid-30s when income is growing and life is getting more complex is exactly the right time. The cost of waiting is not obvious today — it shows up later.

How do I handle RSU tax withholding gaps?

Supplemental income from RSUs is typically withheld at a flat federal rate of 22 percent, which is often lower than the actual marginal rate for high earners. The gap shows up as an unexpected tax bill in April. The right approach is to model your estimated tax liability before shares vest, make quarterly estimated payments to cover the gap, and build a repeatable process so the tax bill is scheduled, not a surprise.

Case Study / Inheritance

"I don't want to mess this up."

A significant inheritance, grief still fresh, and pressure to make the right decisions immediately. How slowing down — and getting the order right — made all the difference.

$1.5M

Inherited across three separate asset types

8 mo.

To sell family home — on her timeline, not under pressure

Zero

Unplanned tax surprises on inherited accounts

THE SITUATION

Grief and financial pressure arrived at the same time.

Rachel is 48. Married, a career, a full life, a household that runs because she runs it. Her father had gone three years before. Now her mother. She is the last generation standing — no parents left, no one above her in the family line. That feeling is its own kind of grief, separate from the loss itself.

Arriving before she was ready: an inheritance. Retirement accounts. A taxable investment portfolio. And the family home — paid off, full of decades of memories, and suddenly hers to decide what to do with. The questions started almost immediately. What do I do with the retirement accounts? Do I invest now or wait? What are the tax implications? Should I sell the house or keep it?

She already had an investment manager involved — her mother's advisor, from a relationship her father had established years ago. Well-intentioned. But every conversation kept circling back to portfolio allocation and investment strategy. Reasonable questions. Just not the right ones to be answering first. And the AUM fee kept coming out. He hadn't called

"I don't want to mess this up." Not for herself. For her mother. This was money her mother had spent a lifetime building.

She also thought about her own kids — what she wanted to pass on someday, what kind of steward she wanted to be of what had been left to her. That's a different kind of pressure than a financial decision. It's a family one.

WHAT WE MEASURED · WHAT WE COULDN'T

DO NOW

SET A DEADLINE

TAKE THE TIME

IMMEDIATE

THE INVESTMENT STRATEGY

THE FAMILY HOME

GETTING THE ORDER RIGHT

Most things that felt urgent weren't. A few things that didn't feel urgent were.

The first thing that happened was slowing everything down. Rachel came in feeling like everything needed a decision immediately. Knowing which decisions were actually time-sensitive — and which ones could wait — immediately reduced the pressure.

WHAT WE MEASURED

—AUM fee: stopped immediately on transition to an advisor who called.

—Stepped-up basis: taxable portfolio sold shortly after inheritance — capital gains exposure minimized significantly.

—$1.5M: invested deliberately across a phased approach — not rushed into the market at a single emotional moment.

—Inherited IRA distributions: CPA-coordinated, built around her bracket — zero unplanned tax bills.

—Portfolio restructured for Rachel at 48 — not her mother's allocation at 75.

—Family home: sold at month 8, proceeds integrated cleanly into the plan already in place.

DO NOW

WHAT WE COULDN’T MEASURE

—Eight months to sell the family home — on her timeline, with no one rushing her toward a decision she wasn't ready to make.

—Her husband understanding the plan for the first time — not just the outcome, but where they actually stand.

—The moment she stopped being afraid of getting it wrong.

—Starting to think about what she wants to leave her own kids someday — that shift doesn't show up anywhere in a financial statement.

—Honoring what her mother built. Not by getting everything perfect. By being intentional.

Inherited IRA distribution Strategy

Rules around how and when distributions must be taken from an inherited retirement account have real consequences for years. Her CPA was brought into the conversation immediately and a distribution approach was built around her income and tax bracket — so nothing arrived as a surprise on a tax return.

Stepped-up basis — act before it costs you

The taxable portfolio had a reset cost basis at date of death. Selling shortly after inheriting meant minimal or zero capital gains exposure on those positions. This window was identified and used before it passed unnoticed.

Phased investment approach

A portion of the proceeds was invested immediately into a diversified portfolio. The remainder moved into short-duration fixed income — working, not sitting idle, but not at equity risk while the full plan took shape. Not rushed. Not reactive.

The family home

Paid off. Carrying costs ongoing. Emotional weight significant. The full financial picture was laid out clearly — stepped-up basis, carrying costs, rental option, net proceeds. Then Rachel was told to take the time she needed. She wasn't ready to sell in the first six months. That was okay.

The advisor relationship

Rachel didn't owe the existing advisor anything. She evaluated the relationship on her own terms — fiduciary, communication, fees — and made a change. For the first time, she had an advisor who actually called.

WHAT THE FIRST 90 DAYS LOOKED LIKE

Questions people in this situation ask

Slow down. Most financial decisions that feel urgent aren't. Before making any investment decisions, map what you've actually inherited — what accounts exist, how they're titled, what the tax implications are, and what decisions need to happen now versus what can wait. The most expensive mistakes with inherited wealth almost always come from rushing.
Under IRC Section 1014, when you inherit an asset, the cost basis is typically reset to fair market value at the date of the original owner's death. If you sell shortly after inheriting, capital gains exposure may be minimal or zero — even on assets that had appreciated significantly over decades. This is one of the most valuable and least understood tax provisions available to heirs. The window to use it doesn't last indefinitely.
An inherited IRA is a retirement account you receive after the original owner passes away. The rules around distributions — when you must take money out and how much — changed significantly under the SECURE Act. Decisions made in the first year or two can have meaningful tax consequences for years to come. Coordinating with a CPA before taking any distributions is essential.
Not automatically. Your parent's advisor was managing money for someone at a different life stage with different goals and a different tax picture. Evaluate the relationship on your own terms: is this person a fiduciary, how are they compensated, and will they communicate proactively? Loyalty to a history you weren't part of isn't a reason to stay.
Give yourself permission to slow down — and find someone who will help you identify what actually needs to happen now versus what can wait. The investment portfolio can sit in a conservative position while you get oriented. The family home isn't going anywhere. A few decisions are genuinely time-sensitive. Most aren't. Knowing the difference is the first job.

Not her mother's portfolio. Hers — built for her life stage, her goals, her timeline.

The taxable portfolio had been managed for someone at 75 — conservative allocation, income-focused, structured around her mother's needs in retirement. Rachel is 48. Her time horizon, risk profile, and goals are fundamentally different. The portfolio was restructured to reflect her situation, not inherited alongside the money.

Deployed immediately

Core diversified portfolio

A portion invested right away into a low-cost, diversified portfolio appropriate for her age and goals. Not waiting for the perfect moment — time in the market started immediately.

"I was so afraid of getting it wrong. By the end, I felt like I understood every decision I made — and I made them for the right reasons."

Short-term hold

Short-duration fixed income

The remainder held in short-duration bonds while the home sale decision was pending. Working at a real return, not sitting in cash, but not at equity risk during the decision window.

After home sale

Proceeds integrated

When the home sold at month eight, proceeds were integrated into the plan that had already taken shape — allocated intentionally with the full tax picture known.

Eight months. Her timeline. The right decision for the right reasons.

The house was the hardest one — not financially but emotionally. Thirty years of holidays, the kitchen where her mother made Sunday dinners, the backyard where her own kids had played during visits. Selling it felt like closing a door. Keeping it felt like holding on to something that might not make financial sense.

The full analysis was laid out: stepped-up basis, carrying costs, rental option, net proceeds. What the numbers said. What the alternatives looked like. And then the most important part: Rachel was given the time she needed. No one rushed her. Her husband was part of every conversation — this was Rachel's inheritance, but it was their financial life. He needed to understand the plan, not just the outcome.

She sold it at month eight. On her timeline. With clear information and the emotional permission to make the decision that felt right. The proceeds were integrated into the plan. The carrying costs stopped. The chapter closed with intention, not pressure.

IF THIS SOUNDS FAMILIAR

If you've recently lost a parent, the financial questions can wait a little longer than they feel like they can.

We help people navigate inherited wealth deliberately — getting the order right, coordinating the tax decisions, and making sure every choice is made for the right reasons. No rush, no product to sell.

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For Illustrative Purposes Only. This case study is a composite illustration created for educational and marketing purposes. It does not represent the experience of any specific client. Names, demographics, and outcomes have been constructed to reflect realistic planning scenarios and do not correspond to any actual individual or household.

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Fictional Client Disclosure. Any quotes or statements attributed to clients are fictional and included for illustrative purposes only.