From Kiplinger · · 1m 40s
Inherited $1 Million? First Steps
How to protect and grow a $1 million inheritance without debt or tax trouble.
In brief
How to protect and grow a $1 million inheritance without debt or tax trouble. Receiving $1 million inheritance requires paying high-interest debt first, using tax strategies, and investing wisely to avoid financial harm. Originally reported by Kiplinger.
You just got $1 million
Millions of people are poised to receive a piece of the more than $124 trillion in generational wealth expected to be transferred over the next decades.
Inheritance can cause strife
Most people want to spend it, but poor decisions could hurt them over the long haul rather than help them.
First step: define goals
Determine what the $1 million means for your goals and finances before making any decisions.
Park money safely
Put it in a high-yield savings account or investment account to earn 3% to 4% interest while planning.
Pay down high-interest debt
Prioritize paying off credit cards, personal loans, and retail cards with double-digit interest rates first.
Invest while waiting
Put the inheritance to work for your goals by reinvesting in the market or using it for specific needs like a home or education.
Tax strategy matters
Federal estate tax exemption is $15 million for individuals and $30 million for couples in 2026, but state taxes may apply.
Step-up in basis rule
When you sell inherited assets, you pay taxes on gains after the step-up in basis resets the asset's value to the date of death.
Stick to the plan
By tackling debt first, planning for taxes, and investing wisely, you can turn a one-time inheritance into generational wealth.
In short
Receiving $1 million inheritance requires paying high-interest debt first, using tax strategies, and investing wisely to avoid financial harm.
