An inheritance can change your financial future, but what you do with it matters. Turning inherited assets into lasting family wealth starts with receiving proper guidance and advice before making major decisions, understanding how the assets are taxed, strengthening your financial foundation, investing with a long-term perspective and creating a plan for the next generation.
The scale of the current wealth transfer is significant. According to Cerulli Associates’ 2024 research, $124 trillion in U.S. wealth is projected to transfer through 2048, with approximately $105 trillion going to heirs and $18 trillion going to charity.
For many families, an inheritance may be one of the largest financial events they experience. A thoughtful plan can help you make decisions that support both your financial goals and the generations that follow.
Building family wealth from an inheritance means turning a one-time transfer into assets and financial structures that can continue to benefit your family.
An inheritance is an event. Family wealth is a a long-term system of strategies to provide for current and future generations.
An inheritance can be spent. Lasting family wealth requires decisions about how assets are invested, protected, managed and eventually transferred to the next generation.
Most inheritances include some combination of:
Each type of asset can have different tax, investment and estate-planning considerations.
Inherited wealth can be difficult to preserve when families are unprepared for the financial and personal decisions that come with it. The Williams Group reports that approximately 70% of estate transfers in its research resulted in families losing control of assets and becoming divided, despite having estate planning in place.
Common challenges include:
The goal is not simply to preserve an inheritance. It is to create a plan for using and transferring the assets intentionally.
The first step is to slow down and seek professional guidance. Give yourself time to understand what you inherited, how the assets are structured and which decisions have deadlines before making major, irreversible changes.
Consider setting aside several months before making major purchases, selling significant assets or changing your overall investment strategy.
A waiting period can give you time to:
Not every decision can wait, however.
Money you are not ready to invest can be held in an account separate from your everyday spending.
Depending on your circumstances, that could include a savings account, money market account or short-term certificate of deposit. Keeping inherited assets clearly documented and separate can also make it easier to track the source of the funds.
Some responsibilities may have deadlines and should be addressed promptly with appropriate professional guidance, including:
The key is to distinguish between decisions that require immediate action and decisions that can benefit from more time and careful consideration.
Tax treatment depends on what you inherit and what you do with the assets afterward.
The federal government does not impose an inheritance tax on the person receiving an inheritance. Federal estate tax, when applicable, is generally a tax on the estate rather than a tax on the beneficiary receiving the assets. For 2026, the federal estate tax basic exclusion amount is $15 million, according to the IRS.
However, receiving an asset without immediate tax does not mean the asset will never create taxable income. Interest, dividends, rent, capital gains and distributions from inherited retirement accounts may be taxable.
When you inherit certain appreciated property, the tax basis may be adjusted to the property's fair market value as of the owner's date of death, subject to applicable rules.
This can significantly affect the capital gain recognized when an inherited investment or property is later sold.
For example, if an investment increased substantially in value during the original owner's lifetime, the basis adjustment may mean that only appreciation occurring after the date of death is considered when calculating the beneficiary's capital gain.
Because basis rules can vary based on the asset and circumstances, confirm the tax treatment with a qualified tax professional before selling inherited assets.
Many non-spouse beneficiaries must fully distribute an inherited IRA within 10 years of the original owner's death. Additional distribution requirements may apply depending on the beneficiary's status and whether the original owner had reached the required beginning date for required minimum distributions.
Traditional inherited retirement account distributions are generally taxable as ordinary income.
That makes withdrawal timing an important planning consideration. Rather than automatically taking the entire account at once, consider how distributions may affect your income and tax situation over the applicable distribution period.
Surviving spouses and certain other eligible beneficiaries have additional options.
Inherited real estate comes with ongoing responsibilities, including property taxes, insurance, maintenance and, if applicable, mortgage payments.
If you rent the property, rental income generally must be reported as taxable income, although qualifying expenses and depreciation may affect the amount subject to tax.
If you sell the property, the basis adjustment described above may affect the amount of capital gain recognized.
Before investing an inheritance for long-term growth, strengthen the financial foundation underneath it.
Consider these priorities:
The right order will depend on your debt, income, existing savings, tax situation and financial goals.
Once your financial foundation is in place, consider how the inheritance fits into your broader investment strategy.
The right strategy depends on your time horizon, goals, tax situation and willingness and ability to accept investment risk.
Inheritances often arrive in concentrated form, such as a large position in one company, a single property or another individual asset.
The investment that made sense for the person who accumulated it may not fit your own goals or risk tolerance. Review concentrated holdings as part of your broader investment strategy rather than assuming you need to keep them indefinitely.
The tax basis of inherited investments can also affect the cost of diversifying. Review the potential tax consequences before making changes.
Inherited cash may allow you to strengthen other areas of your financial plan.
Depending on your circumstances and eligibility, options may include:
Tax treatment varies by account and individual circumstances, so consider the tax consequences before moving inherited assets.
If you inherit real estate, there are three common paths:
Consider the property's financial performance, condition, insurance costs, taxes and your long-term goals before deciding.
For families along the Gulf Coast, insurance availability and costs may deserve particular attention when evaluating whether to keep inherited property.
An inherited business interest requires its own analysis.
Consider whether you want to operate the business, hold the interest or sell it. You may also need to review:
These decisions often benefit from coordinated advice from a wealth advisor, attorney and CPA.
Once you become the owner of inherited assets, you also become responsible for deciding how those assets may eventually pass to others.
Review your estate plan after receiving a significant inheritance.
Your will controls assets that pass through your estate, while beneficiary designations generally control who receives assets such as retirement accounts and life insurance.
Trusts may also be useful in certain situations. Depending on how a trust is structured and applicable law, it may help manage when and how beneficiaries receive assets and may provide additional protection in certain circumstances.
Review these documents together rather than treating each one as a separate decision.
Some families choose to transfer wealth during their lifetimes rather than waiting for assets to pass at death.
The IRS provides an annual gift tax exclusion for qualifying gifts to individual recipients. For 2026, the annual exclusion is $19,000 per recipient.
Gift and estate tax rules can be complex, and larger gifts may have reporting or tax implications. Consult a qualified tax professional or estate-planning attorney before implementing a gifting strategy.
Louisiana estate law differs from that of many other states. Families with property or other significant connections to Louisiana should understand how state law may affect succession planning.
Three concepts may be particularly important:
If you own property in Louisiana or expect to inherit property there, work with an attorney licensed in Louisiana to understand how the state's laws apply to your circumstances.
Legal structures can help protect and transfer assets, but preparing heirs can be just as important.
Consider:
The goal is to prepare the next generation to be responsible stewards of the wealth they receive.
Some inheritances are relatively straightforward. Others involve investments, real estate, retirement accounts, business interests and estate-planning considerations that require coordination.
Consider working with a wealth advisory team if:
Effective inheritance planning often involves multiple professionals. A wealth advisor can help with investment strategy and long-term planning, an estate-planning attorney can address legal structures and documents, and a CPA can help with tax strategy and filings.
The value comes from making sure those professionals are working from the same overall plan.
Louisiana does not impose a state inheritance tax, and there is no federal inheritance tax. However, inherited assets can generate taxable income after you receive them, including interest, dividends, rent, capital gains and certain retirement account distributions.
Consider your broader financial picture first. Pay attention to high-interest debt, emergency savings, retirement contributions, upcoming expenses and your financial goals. The amount that makes sense to invest will vary based on your circumstances.
Many non-spouse beneficiaries must fully distribute an inherited IRA within 10 years of the original owner's death. Additional distribution requirements may apply depending on the beneficiary and the circumstances of the original owner's death.
It depends on your mortgage rate, financial goals, cash needs and alternatives for the money. Paying down a mortgage can reduce future interest costs, while investing the funds may provide greater long-term growth potential but also involves investment risk.
The timeline varies widely depending on the assets and the complexity of the estate. Assets with named beneficiaries may transfer more quickly, while assets that require succession or probate can take longer.
The answer depends on state law and your circumstances. In Louisiana, inherited property may be treated as separate property, but actions such as commingling funds can affect how property is characterized. Keep clear records and consult an attorney about your specific situation.
Start by protecting the assets and giving yourself time to understand what you received. Review the tax treatment, address financial priorities, establish an investment strategy and create a plan for eventually transferring the wealth to the next generation.
An inheritance is not, by itself, family wealth. It becomes a family legacy when you take the time to understand what you received and make intentional decisions about how to manage it.
Start by giving yourself time and seek professional guidance. Understand the tax implications of each asset. Strengthen your financial foundation. Invest with your long-term goals in mind. Review your estate plan and prepare the next generation to take responsibility for the wealth that follows.
If you are navigating a significant inheritance, you do not have to make every decision at once.
An inheritance can create new opportunities for you and the generations that follow. A Hancock Whitney wealth advisor can help you bring your investment, tax and estate-planning considerations together in a plan built around your goals.
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