Whenever a client receives an inheritance, there can be a mix of emotions and stress about how to properly steward what’s been received, especially if the inheritance is unexpected. Sudden wealth can be a tremendous blessing, but it can also feel overwhelming, bringing with it many new decisions in unfamiliar territory.
Taking the time to intentionally and systematically plan what to do with an inheritance is always time well spent. Here are some of the key questions we encourage clients to consider when they receive wealth.
1. Emotional and Family Dynamics
Inheritance often comes with ties to grief, memories, and family expectations. For that reason, it’s usually best to make big financial decisions after you’ve had time to reflect.
Good stewardship means honoring the legacy of the gift while also managing the resources wisely for today and the future. Helpful questions include:
- How do you want to honor the person who left you the inheritance?
- Are there family values or causes you’d like to carry forward through this gift?
2. Legacy and Stewardship
One meaningful perspective on inheritance is to view yourself as a steward of wealth for the next generation. This shift in mindset often leads to rich family conversations about vision, values, and multi-generational priorities.
It can also open the door to intentional giving, such as supporting ministries, charities, or other causes that are important to you.
Questions to explore include:
- What impact do you want to make for future generations (your children, grandchildren, or others)?
- What family priorities, vision, or values could this inheritance help achieve?
- What causes or ministries do you want this gift to support?
3. Practical Governance
Though less inspirational, it’s critical to understand the formats in which wealth is being transferred, as there are rules–especially regarding taxes–around what needs to happen to the assets. Here are a few common examples:
- 401(k)/Traditional IRAs – This pre-tax account will require you to take annual RMDs and effectively distribute the entire account within 10 years. This will count against your income tax bill.
- Real Estate – Families will want to decide what to do with real estate sooner rather than later. Taxes, upkeep, and other costs will continue to register as decisions take their time.
- Trusts – The conditions of a trust are not always straightforward, especially if you don’t have a law degree. It’s highly valuable to review any trusts with a qualified estate attorney.
- Businesses – Ideally, a business owner will have a well-structured and funded contingency plan if they pass away while at the head of a business. If not, heirs will have to understand what their ownership stake is and the responsibilities that come from owning or selling the business.
The moral of the story is that all wealth comes with rules. To govern an inheritance well, work alongside someone who can help you understand what you’re receiving.
Final Thoughts
Receiving an inheritance is an opportunity to honor the past, steward the present, and shape the future. With reflection, planning, and open conversations, families can turn an inheritance into a meaningful legacy that carries forward for generations.
It’s also worth remembering that stewardship doesn’t begin only when wealth is transferred. If you are in the season of building and storing up resources, now is the time to think intentionally about the legacy you want to leave. Having clear priorities and a thoughtful plan in place can help your wealth bless future generations and advance the causes that matter most to you.