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### Navigating the Great Wealth Transfer: What to Know About Inheriting Wealth
We are in the midst of the Great Wealth Transfer — a predicted titanic pass-down of assets from older generations to Gen X, Millennials, and Gen Z. According to financial research firm Cerulli Associates, $124 trillion will change hands through 2048.
That said, not everyone is going to receive a staggering amount of money or any inheritance at all. Much of this wealth is concentrated within a small segment of the population. But if you’re among those inheriting wealth, you’ll have important choices to make. Planning ahead can help you avoid costly mistakes.
“This is something that’s really powerful, that could really propel your financial security,” says Fahmin Fardous, a certified financial planner with Zenith Wealth Partners in Morristown, New Jersey. “Let’s look at where you are, and let’s look at what your goals are in life.”
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### Prepare Before the Inheritance
Receiving large sums of money and experiencing the loss of a loved one can both throw you for a loop, emotionally and practically.
“Grief can lead to rushed decisions,” says Scott Bishop, a CFP and co-founder of Presidio Wealth Partners in Houston. Establishing clear goals, understanding the terms of your inheritance, and researching tax implications can put you in a better position to make smart choices. In other words, laying the groundwork now prepares you for the hard work later.
“Emotionally, I often see people swing to extremes — either refusing to spend any money because it feels like ‘blood money,’ or spending too quickly because they don’t feel deserving of it,” says Mitchell Kraus, a CFP with Capital Intelligence Associates in Santa Monica, California.
No matter what emotions you feel at the time — whether happiness, sadness, or general overwhelm — it’s probably a normal response.
“I’ve seen stress, I’ve seen excitement,” Fardous adds. Many clients have never managed this kind of money before and don’t know what to do with it.
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### Avoid Common Inheritance Mistakes
All those feelings can make it hard to act thoughtfully on your newfound wealth — especially when it’s a life-changing amount.
One mistake to avoid, Fardous says, is mentally spending the inheritance before it arrives. “Whenever I see someone who’s received a windfall, they think of this wish list they’ve had,” she explains. “And this money is getting spent in their head before it’s even hitting their bank account.” This can derail long-term security before the inheritance has even settled.
“Don’t bank on an inheritance until you have it,” Kraus cautions.
While seeking professional advice is a smart move, be wary of financial professionals who may push high-commission products. If you consult with an advisor, consider working with a fiduciary — someone legally bound to act in your best interest.
Understand the difference between:
– **Fee-based financial planners:** who may receive commissions for recommending products
– **Fee-only planners:** who are paid solely by their clients
Friends and family pressure can also lead to hasty decisions. Kraus recommends taking a “90-day decision-free zone,” a period where you avoid making irreversible financial moves.
“It gives you a chance to reset and think about what’s going on without pressure,” he says.
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### Have the Hard Conversations Early
Knowing what you might inherit helps you prepare for taxation and distribution.
For example, if you’re inheriting an IRA, there are specific rules about when and how you must take distributions, and certain taxes may be due.
If you have a close relationship with your loved ones, try to discuss what you might inherit. “I can’t tell you how many families I see where the parents plan to leave a lot of money, but their kids are worried about the parents’ financial needs — so they save money in case their parents need help,” Kraus says.
Having these conversations ahead of time can help clarify expectations and ease concerns.
Consider asking about the types of assets you might inherit — cash, property, investments — and whether there are any restrictions on the assets.
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### Make a Plan for Your Inherited Wealth
After giving yourself time to absorb the emotional and practical aspects of the inheritance, consider these priorities:
1. **Consult a professional about tax liabilities.** Understanding the tax implications early is crucial.
2. **Build an emergency fund and pay down debt.** “We don’t want to allocate anything else without you having an emergency fund of three to six months in a high-yield savings account and ensuring you have no high-interest debt,” advises Fardous.
3. **Define your goals.** Do you want to contribute to your children’s education, purchase a home, or boost your retirement savings?
“The first thing you don’t want to do is go out and buy three Ferraris,” Bishop quips. Instead, think about what’s important to you and what this money means.
Where do you want to go? Does this inheritance mean you can retire early? Would you want to?
“Think of it as an opportunity to reset your life,” Bishop says. “Big checks invite big mistakes. It’s important to slow down, have a plan, and then execute.”
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**Further Reading:**
– 4 Ways to Relaunch Your Finances in 2026
– 6 Clever Ways I’ve Saved Money (That Weren’t as Scary as I Thought)
– Will U.S. Intervention in Venezuela Change Prices at the Pump?
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*Kate Ashford, WMS™ writes for NerdWallet.*
Email: [email protected]
Twitter: [@kateashford](https://twitter.com/kateashford)
https://www.chicoer.com/2026/01/24/great-wealth-transfer/
