Carol sat at her kitchen table with a checking account that suddenly held $380,000. Her mother had been gone for seven weeks. The check from the estate had cleared three weeks ago. Her phone had rung three times that morning, all from advisors she didn't know, two of whom mentioned her mother's name on the voicemail. She hadn't called any of them back. She hadn't moved a dollar. She'd been staring at the same online banking screen for twenty minutes, and the number kept not feeling real.
Then she closed the laptop and made coffee.
If you're somewhere close to where Carol is, you already know that inheriting money is complicated in ways nobody prepares you for. There's grief, which doesn't care about money. There's guilt, which shows up uninvited whenever you think about the inheritance as good news. And there's a sudden, strange vulnerability to people who want a piece of it. Friends have opinions. Family has opinions. Strangers on the phone have very strong opinions. You don't want to mess this up. You don't trust anyone right now. Both of those feelings are reasonable, and neither one has to be solved this week.
This guide is about what to do with an inheritance during the first 90 days, written for the person who is grieving and managing a large unexpected sum at the same time. The short version is this: the smartest thing to do with an inheritance in the first 30 days is almost nothing. Park it safely, breathe, and refuse to be rushed. Then, over the next 60 days, build a plan that fits your life.
Short answer (for the person scrolling fast): What to do with an inheritance in the first 90 days: move the funds to a separate, FDIC-insured high-yield savings or money market account, do not make any major purchases or investments for at least 30 days, identify inherited IRA rules and tax deadlines that actually have clocks on them, then interview two or three fiduciary, fee-only advisors before investing or paying down large debts. Slow is the strategy.
At FinanceAdvisors.com, we match people with fiduciary advisors who handle these exact questions every day.
The People Who Call You First Are Almost Never the Right Ones
Here's something Carol learned the hard way the first time, years before her mother passed: the advisors who chase inheritance leads are usually the ones working on commission. Probate filings are public records in most states. Obituaries are scraped. Brokers and insurance salespeople buy lists. The Consumer Financial Protection Bureau has repeatedly flagged "windfall marketing" as a high-pressure environ(CFPB, 2023 consumer advisories).
ment where unsuitable annuity and insurance sales spike
The advisors you actually want, the fiduciary ones who are legally required to put your interests ahead of their compensation, generally don't cold-call grieving families. They take referrals. They publish. They get found. They wait for you to come to them.
This isn't a moral story. It's a structural one. Commission-based salespeople need to find clients quickly to get paid. Fee-only fiduciaries are paid by clients who hire them, so their incentive is to be findable and reputable, not aggressive. When you understand that difference, the three voicemails on your phone become much easier to ignore.
Days 1 to 30: Stabilize, Don't Act
The first month is for protecting the money from two things: theft, and yourself. Not because you're reckless, but because grief plus a large sum equals impaired decision-making. That's not an insult. It's neuroscience. Researchers at the National Institutes of Health have documented that acute grief measurably reduces executive function and risk assessment for weeks to months after a significant loss (NIH, Grief and Decision-Making, 2022).
So here's what the first 30 days look like.
Move the money somewhere boring and safe. Open a separate high-yield savings account or a money market account at an FDIC-insured bank (or NCUA-insured credit union). As of mid-2026, top high-yield savings rates have hovered between roughly 3.8% and 4.5% APY (Bankrate, June 2026). FDIC insurance covers $250,000 per depositor, per insured bank, per ownership category (FDIC.gov). If your inheritance exceeds $250,000, split it across two banks or use a cash management account that sweeps deposits across multiple insured institutions. Carol's $380,000 would split cleanly into two accounts, or sit inside one sweep account that distributes the coverage automatically.
Do not commingle the funds. Don't deposit the inheritance into the joint checking account you share with a spouse. Don't pay this month's mortgage out of it. Keep it separate. In most states, an inheritance is considered separate property as long as it stays separate. The moment it mixes, it can become marital property, which matters if your marriage ever changes shape. That's not a prediction, it's just hygiene.
Make a list, not decisions. Take a piece of paper. Write down what you owe (mortgage, car, credit cards, student loans, the balances and interest rates). Write down what you have (retirement accounts, emergency savings, taxable brokerage). Write down what's coming (kids' college, your own retirement, any known medical issues). The list is the map. You're not acting on it yet.
Identify the deadlines that actually exist. Most inheritance decisions have no deadline at all. A handful do. Inherited retirement accounts have clocks. Estate tax returns have clocks. We'll cover those next.
Say one sentence to everyone who asks. "I'm not making any decisions for at least 90 days." That's it. You don't owe anyone a longer explanation. Not your brother-in-law with a real estate idea. Not the advisor who called twice. Not the friend whose nephew sells whole life insurance.
The Inherited IRA Rules You Need to Know About Right Now
If part of your inheritance came from a retirement account (a traditional IRA, Roth IRA, 401(k), or 403(b)), the tax rules are specific and they do have deadlines. This is the section to read carefully and then take to a CPA.
For non-spouse beneficiaries who inherited an IRA after January 1, 2020, the SECURE Act generally requires the full account to be emptied within 10 years of the original owner's death (IRS Publication 590-B). This replaced the old "stretch IRA" strategy, where beneficiaries could spread distributions over their own lifetime. The 10-year clock is hard. Miss it, and the IRS can impose substantial penalties on the remaining balance.
A few specifics that matter:
- If the original owner had already begun taking required minimum distributions (RMDs), the IRS confirmed in final regulations issued in 2024 that non-spouse beneficiaries must also take annual RMDs during years 1 through 9 of the 10-year window, in addition to emptying the account by year 10 (IRS, Final Regulations on Required Minimum Distributions, July 2024).
- Distributions from inherited traditional IRAs are taxed as ordinary income in the year you take them. That's your regular tax bracket, not the lower long-term capital gains rate. A $200,000 inherited traditional IRA pulled out all at once could push a middle-income household into the 32% or 35% federal bracket, plus state tax.
- Missing an RMD historically triggered a 50% excise tax on the shortfall. The SECURE 2.0 Act reduced this to 25%, and to 10% if corrected within a defined window (IRS, SECURE 2.0 summary, 2023). It's still a meaningful penalty.
- Inherited Roth IRAs are also subject to the 10-year rule for most non-spouse beneficiaries, but qualified distributions remain tax-free.
- Spousal beneficiaries have additional options, including treating the IRA as their own. The rules for surviving spouses are genuinely different and worth a dedicated conversation with a tax professional.
The practical point for Carol: if part of her $380,000 came from her mother's IRA, she probably wants to spread distributions across the 10-year window rather than taking it all in one year. A CPA can model the brackets. A fiduciary financial advisor or financial planner can coordinate that with the rest of her financial picture. This is not a one-size answer.
Days 31 to 60: Assess and Plan
By the second month, the worst of the early grief fog usually starts to lift. Not the grief itself, the fog. You can think a little clearer about numbers. This is when assessment work happens.
Get your own financial picture on one page. Net worth, cash flow, retirement projections, debt schedule, insurance coverage. If you've never done this, the inheritance is the reason to finally do it.
Identify what the money could do for the version of your life you actually want. This is the part everyone skips. Money is a tool. It's only useful if you know what you're building. For some people, an inheritance funds an early retirement. For others, it pays off a mortgage and frees up monthly cash flow. For others, it gets invested for the kids' education or grandchildren's. None of these are right or wrong. They reflect different lives.
Interview advisors. Slowly. Now is when you start having conversations with fiduciary, fee-only planners. Two or three is enough. You're looking for fit, not just credentials.
When you're thinking about how to choose a financial advisor, the things that matter most for this situation are:
- Are they a fiduciary 100% of the time, in writing, for everything they recommend?
- How are they compensated? You generally want a fee-only financial advisor, meaning they're paid by you and only by you. No commissions, no kickbacks, no product sales.
- What are their credentials? CFP (Certified Financial Planner) and CFA (Chartered Financial Analyst) are the most rigorous. CPA/PFS is strong on the tax side.
- Will they coordinate with your CPA and estate attorney?
- Can they show you, in writing, what they will charge you in dollars per year, not just a percentage?
A fee-only fiduciary is legally required to put your interests ahead of their own. A non-fiduciary "advisor" (which is most brokers and insurance salespeople) only has to recommend products that are "suitable," which is a much lower bar. That distinction is the entire ballgame when you're sitting on $380,000.
Get the tax picture right before you act. A CPA can run a multi-year projection. If you're going to be pulling distributions from an inherited IRA, the question is which years to pull more or less, based on your income, your spouse's income, capital gains harvested or losses banked, and other variables. This is the kind of question where getting it 80% right is worth far more than the CPA's fee.
Days 61 to 90: Begin Implementing
By the third month, you're ready to actually do things. Notice the order. Stabilize, plan, then act. Most of the people who end up regretting how they handled an inheritance reverse that order.
Build the emergency fund first. Three to six months of essential expenses, in cash, in that same boring savings account. If you didn't have this before, the inheritance is the obvious solution.
Address high-interest debt next. Credit card balances at 22% APY are guaranteed losses. Paying them off is the closest thing to a risk-free return that exists in personal finance. Mortgages and student loans are a more nuanced conversation, especially federal student loans with income-driven repayment options, but credit cards are usually a straightforward yes.
Maximize tax-advantaged retirement contributions. If you have earned income, the inheritance can effectively let you max out your 401(k), IRA, and HSA contributions, because the inherited cash is replacing the income you would have otherwise spent. For 2026, the 401(k) contribution limit is $24,500 with a $8,000 catch-up for those 50 and older (IRS, 2026 cost-of-living adjustments).
Then invest the rest, deliberately. Not all at once if it feels wrong. Lump-sum investing has historically outperformed dollar-cost averaging in roughly two out of three rolling periods, according to Vanguard research (Vanguard, Dollar-Cost Averaging Just Means Taking Risk Later, 2023). But the emotional argument for averaging in over six or twelve months is real, and the difference in long-term outcomes is usually modest. The right answer is whichever one lets you sleep.
Diversify across accounts and tax treatments. Taxable brokerage for flexibility, retirement accounts for tax-deferred or tax-free growth, possibly a 529 for kids or grandkids. The mix depends on your goals.
Document everything. Update your own estate plan: will, beneficiaries on every account, powers of attorney, healthcare directives. An inheritance is the moment most people realize they've been overdue for this.
How to Invest an Inheritance Without Getting Burned
A few principles that hold up across most situations:
- Diversification beats conviction. Whatever you "know" is the next big thing, isn't, statistically speaking.
- Low-cost index funds and ETFs remain the academic default for most long-term investors. Fees compound against you the same way returns compound for you.
- Match the timeline to the asset. Money you need in two years doesn't belong in stocks. Money you don't need for twenty years probably doesn't belong in a savings account.
- Avoid anything you don't fully understand. If an advisor can't explain a product in plain English, that's the product's problem, not yours.
Frequently Asked Questions
What should I do with an inheritance right away?
Move the funds into a separate FDIC-insured high-yield savings or money market account, keep them separate from your other money, and don't make any major financial decisions for at least 30 days. The goal in the first month is protection, not optimization.
What are the inherited IRA rules for non-spouse beneficiaries?
Under the SECURE Act, most non-spouse beneficiaries must empty inherited IRAs within 10 years of the original owner's death. If the original owner had already started taking RMDs, the beneficiary must also take annual RMDs in years 1 through 9. Distributions from traditional inherited IRAs are taxed as ordinary income. Consult a CPA for your specific situation.
Should I pay off my mortgage with an inheritance?
Sometimes, but not automatically. If your mortgage rate is below 4% and you have decades left on the loan, the math often favors investing instead. If your rate is above 6% or you're close to retirement and want the peace of mind, paying it down can make sense. A fiduciary advisor can run both scenarios.
How do I find a financial advisor for an inheritance I don't trust to manage myself?
Look for fee-only fiduciary advisors with the CFP designation, ideally those who specialize in windfall planning. Avoid advisors who contacted you first. Interview at least two or three before committing. Matching services like FinanceAdvisors.com can connect you with pre-vetted fiduciaries.
How long should I wait before investing an inheritance?
Most planners recommend waiting at least 30 to 90 days before making major investment decisions. This allows the initial emotional response to settle, gives you time to assess your full financial picture, and lets you interview advisors without pressure. The opportunity cost of holding cash for a few months is small compared to the cost of a rushed decision.
A Final Word for Carol
The phone will keep ringing. Some weeks it'll feel like the whole world has an opinion about your money. None of those opinions are emergencies. The money will still be there next month, and next quarter, earning interest in the boring account where you parked it. The 90-day framework isn't passive. It's the work. It just looks like patience from the outside.
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Disclaimer: This article is for general informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. FinanceAdvisors.com is an advisor matching service, not a registered investment adviser, and does not provide investment advice, evaluate investment products, or analyze individual financial situations. FinanceAdvisors.com receives compensation from advisors when matched investors become clients. Many, though not all, advisors in the network operate under a fiduciary standard; confirm any advisor's fiduciary status, compensation, and credentials directly before engaging. "Carol" is a hypothetical illustration, not a real client, used for educational purposes only. Figures, interest rates, contribution limits, tax rules, and third-party data cited reflect the sources and dates referenced, are illustrative only, and are subject to change; they are not a projection or guarantee. Any financial, tax, or legal decisions should be made in consultation with a qualified professional who understands your specific circumstances. Past performance is not indicative of future results, and no outcome is guaranteed.
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