Wealth Management for Inheritance: Steps to Help Support Your Goals

Inheriting money or property is often a bittersweet experience. It typically arrives with an emotional whirlwind, bringing with it both significant opportunity and deep personal meaning. In moments of grief or pressure, many people make hasty financial decisions without the guidance that can come from an experienced wealth manager. This guide strives to provide practical, thoughtful steps for effective wealth management for inheritance, helping you honor its source while securing your financial future.

Our aim is to bridge the gap between emotional decision-making and sound financial strategy and enable you to approach this new chapter with confidence. We focus on long-term wealth growth, from building a diversified investment strategy to minimizing tax burdens and working to cultivate generational wealth. By offering clear, actionable advice, we hope to help you make informed choices that respect the legacy of your loved ones.

Contents

• Step One: Pause and Take Inventory
• Step Two: Understand What You’ve Inherited
• Step Three: Build a Financial Foundation
• Step Four: Create a Long-Term Investment Strategy
• Step Five: Give With Intention
• Step Six: Update Your Own Estate Plan

Step One: Pause and Take Inventory

Don’t Make Big Moves Right Away

We feel that it is often wise to delay major financial decisions for at least three to six months after receiving an inheritance. This period allows you to process the psychological impact of sudden wealth, which can include grief, guilt, or pressure from others. Family dynamics may also introduce unexpected expectations or conflict. This pause can create space for clarity and more strategic decisions, helping you to recognize when you’re reacting emotionally rather than rationally.

Step Two: Understand What You’ve Inherited

Every Asset Comes with Its Own Rules

Each asset type carries unique considerations, and we believe that understanding them is a critical step in effective wealth management for inheritance. Below, we outline commonly-inherited asset types and key considerations for each.

• Cash: Simple to access, but deciding where to place it takes planning.
• Brokerage accounts: May include stocks, bonds, mutual funds, or ETFs. Understanding the stepped-up cost basis is key to minimizing capital gains taxes.
• Retirement accounts (IRAs, 401(k)s): Often come with specific rules around required minimum distributions (RMDs), which can impact your tax planning.
• Real estate: Inherited property can be sold, kept, or rented. Each option has different tax, maintenance, and management implications.
• Business interests: Inheriting part of a business often requires professional valuation and an understanding of its financial health.

Before committing to any decisions, we recommend considering the liquidity, tax impact, and timing for each asset. For complex holdings, obtaining a professional valuation is often necessary. Working with a qualified wealth advisor or estate attorney can help ensure each asset is handled appropriately.

Step Three: Build a Financial Foundation

Use the Inheritance to Strengthen Your Day-to-Day Stability First

Before focusing on long-term investing, we suggest using your inheritance to reinforce your financial base. This approach can help provide peace of mind and may reduce immediate financial strain.

Some examples of key steps may include:

• Pay off high-interest debt: Eliminating credit cards or personal loans frees up cash flow and lowers financial pressure.
• Build or strengthen your emergency fund: Aim for three to six months of living expenses in a liquid, accessible account. This provides a safety net for unexpected events.
• Reevaluate insurance coverage: A shift in your financial position may require adjustments to life, health, or property insurance to ensure appropriate protection.

Step Four: Create a Long-Term Investment Strategy

Align the Inheritance with Your Personal Financial Goals

Wealth management for inheritance involves aligning the assets you’ve received with your broader financial priorities. Begin by defining your goals, such as planning for retirement, homeownership, higher education, or a business investment. Your investment strategy should reflect your risk tolerance and time horizon, and diversification helps manage risk across various asset classes. Common investment vehicles include:

• Stocks, bonds, mutual funds, ETFs: Core components of most portfolios.
• Real estate: Whether you sell, keep, or rent inherited property depends on your financial goals and appetite for management.
• Private equity or emerging assets: These may appeal to investors with higher risk tolerance but require careful analysis and guidance.

The goal is to tailor your strategy to your specific needs. Rather than forming the general objective of growing wealth, we believe that the most meaningful strategy is to do so in a way that aligns with your values and comfort level.

Step Five: Give With Intention

Philanthropy, Family Support, and Legacy

High-net-worth individuals are among the most consistent charitable donors. According to a 2022 Bank of America study, 85% of affluent households gave to charity. An inheritance can be an opportunity to give back or support others.

While strategic giving is emotionally fulfilling, it can also offer tax advantages.

• Charitable giving: Consider donor-advised funds, charitable trusts, or direct donations to organizations you care about.
• Supporting family: Helping loved ones is common, but it’s important to gift responsibly and stay within IRS guidelines to avoid unintended tax consequences.
• Legacy planning: Giving in a way that reflects the values of the person who left you the inheritance adds meaning to your decisions.

Whether through philanthropy or family support, intentional generosity can be part of a well-rounded financial plan.

Step Six: Update Your Own Estate Plan

Sudden Wealth Means You Need a New Plan Too

Receiving an inheritance should prompt a full review of your own estate plan. Your current wills, trusts, and beneficiary designations may no longer reflect your financial reality or future goals. Updating your documents ensures your assets are passed on according to your wishes and protects your heirs from future confusion or conflict. This is also the time to explore asset protection strategies and work with an estate planner if needed.

Taking Control at Your Own Pace

Investing an inheritance is both a responsibility and an opportunity. There’s no need to rush. At Morgan Rosel Wealth Management, we believe that intentional decisions provide the best path toward long-term security and help you preserve the memory of your loved one in a meaningful way. With the right strategy and support, you can turn inherited wealth into a foundation for your future and possibly for generations to come.

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Disclosures

Investment advisory services are offered through Morgan Rosel Wealth Management, a registered investment adviser. Registration with any regulatory body does not imply any particular level of skill. This material is provided for informational purposes only and should not be construed as investment, tax, or legal advice. All investments involve risk, including the possible loss of principal. Past performance does not guarantee future results. The scenarios presented are hypothetical and are intended for illustrative purposes only. They do not reflect actual client results and are not guarantees of future outcomes. Individual results will vary. Certain financial strategies may offer tax advantages, but outcomes depend on individual circumstances and are subject to change due to tax laws and other external factors. Consult a tax professional. Certain statements herein may reflect the firm’s current views, expectations, or beliefs, which are subject to change without notice.

For additional information about our services, fees, and disclosures, please refer to our Form ADV Part 2A, available at https://morganrosel.com or upon request at no cost.