• COVID-19
  • Insights
  • Who We Help
    •   Industrial Automation
    •   Manufacturing & Distribution
    •   A&E Professional Services
    •   International Businesses
      • ◦   Expanding Outside the U.S.
      • ◦   Expanding to the U.S.
  • Services
    •   COVID-19
      • ◦   Cash Flow Confidence Assessment
      • ◦   Maximize Your Loan Forgiveness
      • ◦   5 Key Focus Areas
      • ◦   COVID-19 Resource Center
    •   Client Accounting
      • ◦   Software Solutions
      • ◦   Accounting Support
      • ◦   Reporting
    •   Tax
      • ◦   R&D Tax Credit
      • ◦   Tax Credits & Incentives
      • ◦   Tax Structure
      • ◦   Federal Tax
      • ◦   State & Local Tax
      • ◦   Personal Tax
      • ◦   Other Tax Filings
    •   Advisory & Assurance
      • ◦   Audit & Attest
      • ◦   Financial Statements
      • ◦   Employee Benefit Plan Audits
      • ◦   Technical Accounting & Reporting
    •   Consulting
      • ◦   Data Analytics
      • ◦   Transaction Services
      • ◦   Business Planning
      • ◦   Succession & Exit Strategies
    •   International
      • ◦   International Tax
      • ◦   Foreign Direct Investment
      • ◦   Global Expansion
      • ◦   International Accounting
  • Events
  • Careers
    •   Why C&M
    •   Students
      • ◦   Campus Events
      • ◦   Internships
      • ◦   Reach Beyond Program
    •   Experienced Professionals
      • ◦   Team member profile videos
    •   Opportunities
    •   Employee Journals
    •   Office Tour
  • About Us
    •   How We Help
      • ◦   Service Approach
      • ◦   Affiliations
      • ◦   Communications & Technology
    •   Meet Our Team
    •   Testimonials
    •   Our Videos
    •   Our Story
  • Contact Us
  • Subscribe
CHANGE COUNTRY:
  • United States
  • 中国
  • Client Login
Clayton & McKervey Logo
  • COVID-19
  • Insights
  • Who We Help
  • Services
  • Events
  • Careers
  • About Us
  • Contact Us
  • Subscribe
    • Most Recent Insights
  1. Home
  2. Insights
  3. 4 Tips for Managing a Large Inheritance

4 Tips for Managing a Large Inheritance

Posted by Casey Haggerty on December 28, 2020

Casey Haggerty Casey Haggerty

Receiving a large inheritance may sound appealing to most, especially in an era where many have gone through two large financial depressions. However, there are many things that need to be considered. It is critical that the beneficiaries understand what an inheritance entails, how to protect assets, and how to navigate any resulting liabilities. From assembling a team of experienced professionals to help them maximize the inheritance to handling tax-related responsibilities, beneficiaries must be diligent and proactive to get the most out of their newfound wealth. Here are some important tips to consider when receiving a large inheritance.

1. Be Wary of the Taxes

Upon receiving a large inheritance, it is instinctive for many to automatically start thinking about all the things it could be used for, such as paying off a mortgage or spending on a lavish vacation. However, depending on the amount and type of assets inherited, there are also taxes to consider. Specifically, inheriting property can have different consequences than inheriting other assets such as retirement accounts. Estate taxes and inheritance taxes need to be paid before assets are distributed to the beneficiaries. Where beneficiaries reside as well as where the decedent lived can also have an impact on what types of taxes need to be considered.

2. Develop a Plan

While dreaming up what to do with a large inheritance can be exciting, establishing a plan is a good place to start. Since beneficiaries can be at various stages of life, the best use of the inheritance could be to pay down debt, establish an emergency fund, cover education costs, or invest for the future. Some may also choose to protect the assets so they can pass them along to future generations. It is important to remember not to spend money that has not been received yet. Even after finding out what each beneficiary’s share will include, it may take months or even years for those assets to get transferred into the beneficiary’s own name. As such, it is not wise to spend a single dollar until you know when the transfers will be completed.

3. Build a Team of Trusted Professionals

Regardless of how to use the inheritance, building a team of financial professionals, including a CPA, investment advisor, and attorney, can help make sure that every detail is thought through in an unemotional way. A CPA can help you navigate the tax implications of the inheritance, avoid any unnecessary penalties, and understand the income tax consequences that will result from how the inheritance will be held and invested or utilized. A trustworthy financial planner and attorney are key to ensure you don’t miss any steps in protecting assets. These professionals can help with anything from how assets should be titled to the best investment strategy to accomplish a beneficiary’s financial goals. If creditor protection is a key factor, asset protection trusts and LLCs could be useful tools that a qualified attorney can recommend. Often, contacting the right professionals prior to receiving an inheritance is important to make sure you have a plan in place as some things cannot be undone after the inheritance is received. For example, if disclaiming certain assets is the right move, a discussion should be had prior to receipt of the asset in question to avoid the unintended consequences of transferring the asset after the fact.

4. Take it Slow

Regardless of the form of an inheritance, whether it be real estate, marketable securities, cash, or other valuables, it is essential to take the planning process slowly. Building a team in advance to help make the proper plans is typically the first step that will help to remove the added stress that comes with inheriting substantial assets. Money may not be able to buy happiness, but a large inheritance can be life changing if handled properly.

Contact Us

If you need assistance maximizing your inheritance, protecting your assets, or navigating tax-related responsibilities, Clayton & McKervey can help. For additional information, call us at 248.208.8860 or click here to contact us. We look forward to speaking with you soon.

Our team is always ready to help.

Please contact us for more information.

Casey Haggerty

Casey Haggerty

Senior Manager, Tax

Contact Casey   |   Read Casey's bio

related news

Financial Management: 4 Key Technology Transformations

The accounting industry looks a lot different these days than it did 10 years ago. From shifts towards data-driven strategy to the implementation of new technological tools, the profession has…

Read full story

5 Financial Considerations for Architecture and Engineering Firms

Working with walls, light, shadow and the properties of a nearly endless array of building materials, architects and engineers create the spaces in which we live and work. Some are…

Read full story

How to Increase Tax Savings with a Roth IRA-Owned IC-DISC

Did You Know Combining these Strategies Can Help You Save Even More Tax Dollars? Many business owners may already be aware of the very popular tax saving strategies that exist…

Read full story

Family-Owned Businesses: Succession Planning

In this episode of The Sound of Automation podcast, Frank Lashier III, COO of Dominion Technologies Group, Inc. joins us to talk about the challenges of transitioning a business within a…

Read full story

Clayton & McKervey Announces Appointment as Key Global Partner for the Centuro Global Network

Media Contact: Denise Asker, dasker@claytonmckervey.com; 248.936.9488 Southfield, Mich.—April 5, 2021—Clayton & McKervey, a certified public accounting and business advisory firm helping growth-driven companies compete in the global marketplace, is pleased…

Read full story

Stay Connected

Here are some additional ways to stay connected.

  • Subscribe to our newsletter
  • View upcoming events
  • Contact us to learn more

Categories

Jump directly to the topics that matter to you most.

  • A&E Professional Services
  • About Us
  • Advisory & Assurance
  • Business Owners
  • Careers
  • Client Accounting Services
  • Consulting
  • COVID-19
  • Data Analytics
  • From the President
  • Industrial Automation
  • International
  • Manufacturing & Distribution
  • Podcasts
  • Press Releases
  • Private Client Services
  • Tax & Tax Credits
  • Transaction Services
  • Videos
    • Ben Smith
    • Beth Butchart
    • Bryan Powrozek
    • Carlos Calderon
    • Casey Haggerty
    • Clayton & McKervey
    • Dave Van Damme
    • Denise Asker
    • Eric Lin
    • Jim Biehl
    • Julie Killian
    • Kevin Johns
    • Margaret Amsden
    • Miroslav Georgiev
    • Nina Wang
    • Rob Dutkiewicz
    • Ruben Ramirez
    • Sarah Russell
    • Sue Tuson
    • Tarah Ablett
    • Teresa Gordon
    • Tim Finerty
    • Tim Hilligoss
  • Main Content
  • Related Insights

4 Tips for Managing a Large Inheritance

Posted by Casey Haggerty on December 28, 2020

Casey Haggerty

Receiving a large inheritance may sound appealing to most, especially in an era where many have gone through two large financial depressions. However, there are many things that need to be considered. It is critical that the beneficiaries understand what an inheritance entails, how to protect assets, and how to navigate any resulting liabilities. From assembling a team of experienced professionals to help them maximize the inheritance to handling tax-related responsibilities, beneficiaries must be diligent and proactive to get the most out of their newfound wealth. Here are some important tips to consider when receiving a large inheritance.

1. Be Wary of the Taxes

Upon receiving a large inheritance, it is instinctive for many to automatically start thinking about all the things it could be used for, such as paying off a mortgage or spending on a lavish vacation. However, depending on the amount and type of assets inherited, there are also taxes to consider. Specifically, inheriting property can have different consequences than inheriting other assets such as retirement accounts. Estate taxes and inheritance taxes need to be paid before assets are distributed to the beneficiaries. Where beneficiaries reside as well as where the decedent lived can also have an impact on what types of taxes need to be considered.

2. Develop a Plan

While dreaming up what to do with a large inheritance can be exciting, establishing a plan is a good place to start. Since beneficiaries can be at various stages of life, the best use of the inheritance could be to pay down debt, establish an emergency fund, cover education costs, or invest for the future. Some may also choose to protect the assets so they can pass them along to future generations. It is important to remember not to spend money that has not been received yet. Even after finding out what each beneficiary’s share will include, it may take months or even years for those assets to get transferred into the beneficiary’s own name. As such, it is not wise to spend a single dollar until you know when the transfers will be completed.

3. Build a Team of Trusted Professionals

Regardless of how to use the inheritance, building a team of financial professionals, including a CPA, investment advisor, and attorney, can help make sure that every detail is thought through in an unemotional way. A CPA can help you navigate the tax implications of the inheritance, avoid any unnecessary penalties, and understand the income tax consequences that will result from how the inheritance will be held and invested or utilized. A trustworthy financial planner and attorney are key to ensure you don’t miss any steps in protecting assets. These professionals can help with anything from how assets should be titled to the best investment strategy to accomplish a beneficiary’s financial goals. If creditor protection is a key factor, asset protection trusts and LLCs could be useful tools that a qualified attorney can recommend. Often, contacting the right professionals prior to receiving an inheritance is important to make sure you have a plan in place as some things cannot be undone after the inheritance is received. For example, if disclaiming certain assets is the right move, a discussion should be had prior to receipt of the asset in question to avoid the unintended consequences of transferring the asset after the fact.

4. Take it Slow

Regardless of the form of an inheritance, whether it be real estate, marketable securities, cash, or other valuables, it is essential to take the planning process slowly. Building a team in advance to help make the proper plans is typically the first step that will help to remove the added stress that comes with inheriting substantial assets. Money may not be able to buy happiness, but a large inheritance can be life changing if handled properly.

Contact Us

If you need assistance maximizing your inheritance, protecting your assets, or navigating tax-related responsibilities, Clayton & McKervey can help. For additional information, call us at 248.208.8860 or click here to contact us. We look forward to speaking with you soon.

Our team is always ready to help.

Please contact us for more information.

Casey Haggerty

Senior Manager, Tax

Contact Casey   |   Read Casey's bio

related news

Financial Management: 4 Key Technology Transformations

The accounting industry looks a lot different these days than it did 10 years ago. From shifts towards data-driven strategy to the implementation of new technological tools, the profession has…

Read full story

5 Financial Considerations for Architecture and Engineering Firms

Working with walls, light, shadow and the properties of a nearly endless array of building materials, architects and engineers create the spaces in which we live and work. Some are…

Read full story

How to Increase Tax Savings with a Roth IRA-Owned IC-DISC

Did You Know Combining these Strategies Can Help You Save Even More Tax Dollars? Many business owners may already be aware of the very popular tax saving strategies that exist…

Read full story

Family-Owned Businesses: Succession Planning

In this episode of The Sound of Automation podcast, Frank Lashier III, COO of Dominion Technologies Group, Inc. joins us to talk about the challenges of transitioning a business within a…

Read full story

Clayton & McKervey Announces Appointment as Key Global Partner for the Centuro Global Network

Media Contact: Denise Asker, dasker@claytonmckervey.com; 248.936.9488 Southfield, Mich.—April 5, 2021—Clayton & McKervey, a certified public accounting and business advisory firm helping growth-driven companies compete in the global marketplace, is pleased…

Read full story

Categories

Jump directly to the topics that matter to you most.

  • A&E Professional Services
  • About Us
  • Advisory & Assurance
  • Business Owners
  • Careers
  • Client Accounting Services
  • Consulting
  • COVID-19
  • Data Analytics
  • From the President
  • Industrial Automation
  • International
  • Manufacturing & Distribution
  • Podcasts
  • Press Releases
  • Private Client Services
  • Tax & Tax Credits
  • Transaction Services
  • Videos

Authors

Read news direct from our managers and stakeholders.

  • Ben Smith
  • Beth Butchart
  • Bryan Powrozek
  • Carlos Calderon
  • Casey Haggerty
  • Clayton & McKervey
  • Dave Van Damme
  • Denise Asker
  • Eric Lin
  • Jim Biehl
  • Julie Killian
  • Kevin Johns
  • Margaret Amsden
  • Miroslav Georgiev
  • Nina Wang
  • Rob Dutkiewicz
  • Ruben Ramirez
  • Sarah Russell
  • Sue Tuson
  • Tarah Ablett
  • Teresa Gordon
  • Tim Finerty
  • Tim Hilligoss

Stay Connected

Here are some additional ways to stay connected.

  • Subscribe to our newsletter
  • View upcoming events
  • Contact us to learn more

Website

  • COVID-19
  • Insights
  • Who We Help
  • Services
  • Events
  • Careers
  • About Us
  • Contact Us
  • Subscribe

Location

+1 248.208.8860
2000 Town Center
Suite 1800
Southfield, MI
48075 | USA

Connect

  • Events
  • Newsletter
  • Client Login

Social

  • LinkedIn
  • Facebook
  • Twitter
  • Glassdoor
  • YouTube
  • Instagram

Awards

DFP Top Work Places Best & Brightest
Prime Global

Tax | Accounting | Assurance | Consulting | Highly technical and accessible team of CPAs helping growth driven, closely held, middle market companies compete in the global marketplace. Michigan-based accountants and advisors focused on helping business owners in the United States and throughout Europe and China.

Privacy Policy Disclaimer

© 2021 Clayton & McKervey