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### Navigating the Great Wealth Transfer: What You Need 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 generational hands through 2048.
That said, not everyone will receive a staggering amount of money — or any inheritance at all, frankly. Much of this wealth is concentrated in a small segment of the population. But if you are inheriting wealth, you will have 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 losing 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 goals, understanding inheritance terms, and researching tax implications can put you in a better place to make smart choices, he explains.
In other words, laying the groundwork now prepares you for the challenging 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 arise—be it happiness, sadness, or general overwhelm—it’s probably normal. “I’ve seen stress, I’ve seen excitement,” Fardous shares. Many clients have never handled this kind of money before, and they don’t know what to do with it.
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### Avoid Common Inheritance Mistakes
Feelings of excitement or stress can make it hard to act thoughtfully on your newfound wealth, especially if it’s a life-changing amount.
One thing to avoid, Fardous advises, is mentally spending the cash before actually receiving it. “Whenever I see someone who’s received a windfall, they think of this wish list they’ve had,” she says. “And this money is getting spent in their head before it even hits their bank account.”
This mindset can derail your long-term financial security before the inheritance has even fully settled. “Don’t bank on an inheritance until you have it,” Kraus warns.
If you seek professional advice (which is good!), be cautious about financial pros who recommend high-commission products. Instead, consider working with a fiduciary — a professional legally bound to act in your best interest.
Understand the difference between:
– **Fee-based financial planners:** Receive commissions for recommending products
– **Fee-only planners:** Paid solely by clients, without commissions
Sometimes, pressure from friends and family can prompt impulsive decisions. Kraus recommends instituting a “90-day decision-free zone” — a period during which you avoid making any irreversible financial moves.
“It gives you a chance to reset, to think about what’s going on and how it’s happening, and that takes a lot of the pressure off,” Kraus says.
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### Have the Hard Conversations Early
Knowing what to expect in terms of taxation and asset distribution can help you prepare.
For example, if you’re inheriting an IRA, there are rules about when and how you must take distributions. Taxes may also be due on what you receive.
If you have a good relationship with your loved ones, consider discussing what you might be inheriting. “I can’t tell you how many families I see where the parents plan to leave a lot of money for their kids, but the kids are so worried about their parents’ wellbeing that they’re saving money in case their parents need help,” Kraus says. “Having those conversations ahead of time can help.”
Ask about the types of assets involved — whether money, property, or investments — and any restrictions tied to them.
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### Make a Plan for Your Inherited Wealth
After giving yourself time to digest the situation and your emotions, experts recommend considering a few key priorities.
– **Consult a professional about tax liabilities.** This should be among your first steps, Bishop advises.
– **Build an emergency fund and pay down debt.** “We don’t want to allocate anything toward other goals without you having an emergency fund of three to six months in a high-yield savings account, and making sure you don’t have any high-interest debt,” Fardous explains.
– **Define your goals.** Ask yourself: Do you want to fund your children’s college education, buy a house, or boost your retirement nest egg?
“The first thing you don’t want to do is go out and buy three Ferraris,” Bishop jokes. Instead, focus on what matters most to you and what this money means for your future.
Does this inheritance allow you to retire early? Would you want to retire early?
“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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**Related 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.broomfieldenterprise.com/2026/01/24/great-wealth-transfer/