Inheriting money: the money checklist.

Give yourself a decision-free window

No house purchases, business investments, or large gifts for several months. Almost nothing about an inheritance is urgent, and the costly mistakes cluster in the first weeks.

Understand step-up in basis before selling

Inherited taxable assets generally reset their cost basis to the value at death, which can wipe out decades of built-up capital gains. Selling soon after often costs little in tax.

Learn the inherited IRA 10-year rule

Most non-spouse beneficiaries must empty an inherited IRA within 10 years, and every withdrawal from a traditional one is taxable income. Spreading withdrawals across years manages the brackets.

Know that debts usually don't transfer

In most cases the estate pays its debts and heirs don't inherit them, with exceptions for co-signed loans and some community property situations. Collectors sometimes suggest otherwise; verify first.

Check the tax picture before spending

Inheritances generally aren't federal income tax to the recipient, but a handful of states levy inheritance taxes, and withdrawals from inherited retirement accounts are taxable. Know which applies.

Retire the expensive debt first

Paying off high-interest balances is a guaranteed return no investment reliably beats. It's the one fast move that's almost never regretted.

Fold it into the plan, not a new lifestyle

Emergency fund, retirement gaps, then goals: the same priorities as before, just better funded. Upgrading fixed monthly costs is how a one-time windfall becomes a permanent obligation.