You probably won’t receive your inheritance immediately after someone passes away. There is a great deal of work involved in administering an estate, and the amount of time it takes doesn’t necessarily relate to the size of the estate. Legalities abound in this area, and the person responsible for taking care of it all, the executor or administrator, has to be sure everything is in order before any funds can be dispersed. Depending upon the requirements of the state in which the estate is settled, a specified period of time must
pass before distributions to beneficiaries (i.e., those who may benefit) can be released.

You may have reasons to decide you don’t want to accept the money. This is called “disclaiming” your interest. If you choose to disclaim your interest, you cannot specify who will receive it instead; you simply step out of the line of succession. If for any reason you decide to disclaim an inheritance, notify the executor of the will as soon as possible. There are time restrictions that govern how long you have to disclaim your interest. For federal estate tax purposes, a qualified disclaimer must be filed within 9 months  following the date of death. State laws will vary.

Once you receive your inheritance, you may find that it causes an emotional response. Depending upon your relationship to the person who died, you may feel guilty or sad or, perhaps, gratified to know you were important enough to be remembered. Try to avoid making any quick decisions you may regret later. The best thing you can do is speak with your attorney to discuss your options.

For the short term, consider putting any cash you receive into an account where it can earn a reasonable interest rate and still be readily accessible. Money market accounts and short-term certificates of deposit (CDs) are possible options generally offered by a bank. If you inherit investments, such as stocks, leave them alone until you have time to evaluate your options, and perhaps, to get professional financial advice. It’s important to note, however, that if your inheritance comes in the form of assets considered qualified (e.g., retirement plans or IRAs), you need to get professional advice right away to help avoid adverse tax consequences.

Before you receive your inheritance, the money may be subject to one or more federal, state, and/or local taxes. Federal estate tax (there may also be state estate or inheritance tax) will generally be due if the taxable estate is worth a certain amount.  Consult a tax expert.