As Thanksgiving approaches, many of us take this time to reflect on what we’re thankful for. Gratitude for family and good health are usually on the list, but some of us may have the added blessing of an inheritance from a loved one who is no longer with us. But what do we do with it? Receiving an inheritance can bring with it a mix of gratitude, responsibility and uncertainty. It can be a generous gift left behind by a loved one, a reminder of family values or part of a larger legacy meant to support future generations.

Here are some thoughtful steps and options you might consider for managing the gift of an inheritance.

1. Pause and Assess

Take the time to fully understand what you’ve inherited before making any decisions. Just like the Thanksgiving table, which can have a smorgasbord of options, an inheritance can include many different items including cash, real estate, stocks, retirement accounts or personal belongings. Some of these assets can come with different tax implications, so it may be wise to discuss your plan with a trusted financial professional.

For example, if you are the recipient of an IRA or 401(k), according to the SECURE Act, you may be required to withdraw the full amount within 10 years which could increase your tax liability.¹ On the other hand, you may be able to take advantage of a step-up in cost basis if you inherited stocks, bonds or real estate and potentially minimize capital gains taxes depending on when and if you sell.²

A financial professional can help make sense of the complicated rules, strategies and processes, and looking at the full picture of your inheritance will allow you to make choices that align with your long-term goals and ultimately honor the legacy your benefactor wished to leave you.

2. Pay Down High-Interest Debt

One of the most common and practical uses of inherited money is paying off high-interest debt, such as credit card balances or personal loans. Using part of your inheritance to reduce your financial obligations is like clearing the table for a fresh start: it can create room in your budget for new investment or savings opportunities and may provide a clearer path toward financial stability. Reducing debt can not only improve your financial health but can also help lower your monthly expenses, allowing more freedom to invest in things like a college fund for your grandkids or allow you to save up for that big trip you’ve always wanted to take.

3. Create or Update Your Own Estate Plan

Thanksgiving is about sharing what we have with those we care about, and it’s a good time to think about how you might share your wealth with your loved ones. When you receive an inheritance, it provides an opportunity to consider your own legacy and to create or update your estate plan. A thoughtful will or trust may help ensure that your assets are passed on according to your wishes and may minimize potential tax burdens for your heirs. Additionally, incorporating charitable giving into your estate plan may allow you to leave a legacy while reducing your taxable estate. You should seek financial guidance to help ensure that your charitable goals are met.

Ready to Make the Most of Your Inheritance? Let’s Plan Together.

Receiving an inheritance is an opportunity to give thanks for the financial independence it may provide while also being mindful of how it can be used to create a better future for you and your loved ones. With a thoughtful, professional approach to your finances, you may be able to turn the blessing of an inheritance into a tool for long-term financial well-being, not just for you, but for your family as well. And what better way to embody the Thanksgiving spirit than to support your family in this impactful way?

Whether you’re looking to invest wisely, reduce debt or create a legacy for future generations, we’re here to help you make thoughtful, informed decisions. Click HERE to reach out to one of our professionals at Zinnia Wealth Management today—and take the next step toward honoring your inheritance with purpose, gratitude and a solid plan.