[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.amorusolaw.com\/blog\/life-can-get-complicated-if-you-inherit-money-greenwich-ct-new-york-ny\/#BlogPosting","mainEntityOfPage":"https:\/\/www.amorusolaw.com\/blog\/life-can-get-complicated-if-you-inherit-money-greenwich-ct-new-york-ny\/","headline":"Life Can Get Complicated If You Inherit Money","name":"Life Can Get Complicated If You Inherit Money","description":"When money suddenly comes into the picture, there will most likely be challenges. There are many, many questions that can arise when you inherit money, such as do you pay down debts or do you invest, according to The Kansas City Star in “Coming into some money? Be wise with it“. Should you pay off […]","datePublished":"2019-07-23","dateModified":"2024-04-04","author":{"@type":"Person","@id":"https:\/\/www.amorusolaw.com\/blog\/author\/amorusolaw\/#Person","name":"Amoruso & Amoruso LLP","url":"https:\/\/www.amorusolaw.com\/blog\/author\/amorusolaw\/","identifier":5,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/12de032c04195e9c39a06a6d6eea182f7b4fa655c20e245f8094a244b5cdd0cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/12de032c04195e9c39a06a6d6eea182f7b4fa655c20e245f8094a244b5cdd0cb?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Amoruso & Amoruso LLP","logo":{"@type":"ImageObject","@id":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/07\/amoruso-logo.svg","url":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/07\/amoruso-logo.svg","width":0,"height":0}},"image":{"@type":"ImageObject","@id":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/04\/6a01901dd0a082970b0240a4bd8ec2.jpg","url":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/04\/6a01901dd0a082970b0240a4bd8ec2.jpg","height":427,"width":640},"url":"https:\/\/www.amorusolaw.com\/blog\/life-can-get-complicated-if-you-inherit-money-greenwich-ct-new-york-ny\/","about":["Estate Planning","Inheritance","IRA"],"wordCount":504,"keywords":["Estate Planning","Inheritance","IRA"],"articleBody":"When money suddenly comes into the picture, there will most likely be challenges.There are many, many questions that can arise when you inherit money, such as do you pay down debts or do you invest, according to The Kansas City Star in “Coming into some money? Be wise with it“.Should you pay off your debts first, if you have any? Make a list of your debt balances and their interest rates. If the interest rate is high, pay it off. If it\u2019s low, you may be better off investing the funds.Next, check on your emergency fund. If you don\u2019t have three to six months\u2019 worth of living expenses on hand, use your inheritance to ramp up that fund. Yes, you can use credit cards sometimes. However, having at least two months\u2019 worth of living expenses in cash is worthwhile.The third step is to contribute the most you can to a health savings account (HSA), if your employer does not contribute to it and if you have a qualifying health plan. That\u2019s $3,500 if you are single, $7,000 for families and add $1,000 if you are over 55. This gets you a nice tax deduction and withdrawals are tax-free, as long as they are used for qualified medical expenses.If you\u2019re still working, and depending upon the size of the inheritance, it might be time to \u201ctax-shift\u201d your portfolio.Let\u2019s say you regularly contribute $3,000 to a 401(k). If you can, increase that amount by $22,000, to the maximum, if you\u2019re 50 and older. Since your paycheck decreases, so does your tax. If your tax rate is currently 22%, you\u2019ll only need to add $17,160 from your inherited account to reach the same spendable dollars. The tax-deferred account in your portfolio will grow faster, while the taxable account shrinks.Think about whether to commingle funds with your significant other or not. Let\u2019s say you and your spouse have a retirement portfolio. You both can spend it now, maybe on your house. The inheritance may also help you to retire earlier. If you save the inheritance, keeping it in a separate account with only your name on it, it remains your asset, in case of a divorce. Most states will consider this money a non-marital asset, and not subject to division between divorcing parties.Consider using the inheritance as a way to avoiding tapping into retirement accounts. Withdrawals from IRAs are taxable. If you\u2019re not worried about commingling funds or investment gains, then use the inherited account to minimize the tax losses from retirement accounts.Most people don\u2019t have enough saved to keep spending during retirement as they did while working. Skip the spending spree that often follows an inheritance and enjoy the money over an extended period of time.An estate planning attorney can advise you on creating an estate plan to fit your particular circumstances, as well as advise you on handling an unexpected inheritance.Reference: The Kansas City Star (June 27, 2019) “Coming into some money? Be wise with it“"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Blog","item":"https:\/\/www.amorusolaw.com\/blog\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"Life Can Get Complicated If You Inherit Money","item":"https:\/\/www.amorusolaw.com\/blog\/life-can-get-complicated-if-you-inherit-money-greenwich-ct-new-york-ny\/#breadcrumbitem"}]}]