Leaving an equal inheritance sounds fair and like the right thing to do. Just split everything down the middle, avoid playing favorites, and do what you have to do to keep the peace. Easy. But "equal" doesn't necessarily mean "fair," and even your best intentions can lead to the opposite result: Resentment, tax surprises and shattered relationships after you're gone.

The decision becomes even more important when you consider that over the next two decades, Americans will pass down over $100 trillion in the so-called Great Wealth Transfer.

But when it comes to inheritance plans, a new Kiplinger-Morning Consult survey reveals a major gap in expectations and knowledge between older and younger generations in many families. In fact, two in five families have never discussed inheritance plans, and three in 10 parents have no formal plans at all.

Should you leave an equal inheritance to your children? In most cases, the answer is yes, but it can be a double-edged sword, explains Ryan Skinner, president of Apex Retirement Services.

Should fairness be your first concern?

Skinner says the best starting point is to plan to divide the inheritance equally while keeping your options open. "Successful children should not be punished for succeeding, and children who have made poor decisions should not automatically be rewarded for failing."

Phil Reed, estate and asset protection attorney at Reed Law, PLC, agrees. "Inevitably, fairness is always the first concern. But fairness and equality are not the same thing, and having simplified math isn't always the best choice when determining the percentage of a distribution."

For instance, "When a child has served as a caregiver for the parent, the parents may want to compensate that child for the years that they were involved with their care and support. Alternatively, a child actively involved in the family business may be entitled to a higher percentage of the estate when other siblings were not involved."

When you have children with different needs and different involvements with the family, equal distribution tends to be inequitable, at least in the minds of the heirs, he says.

"The primary thing to keep in mind when deciding how to divide your estate is communicating the reasons for that decision and having those memorialized in your estate plan specifically."

All is fair in love

The Morning Consult-Kiplinger survey finds most adult children (70%) and parents (67%) feel ready to manage an inheritance. However, readiness isn't always the same as fairness.

For instance, it's common to give one child a down payment on a house or pay their college tuition. Maybe you covered a financial emergency for another child. Unfortunately, the child who received less during your lifetime may feel resentful, while the one who already benefited may not even remember your help. Without a change to your estate plan (sometimes called a hotchpot clause), the equal division can actually highlight any uneven splits.

Testate and intestacy statutes

Under United States law, a person who creates a valid will can divide their money and property in almost any way they choose. When someone dies without a will, state law distributes their estate based on family ties instead of splitting it equally.

When a will exists, the estate is testate, and the will controls how your property is divided. If you have no will, the estate is intestate, and the state's intestacy statute provides a formula that rarely leaves your kids with the same amount. The idea that siblings automatically get "equal" slices of the same pie is a myth that can cause lawsuits, hurt feelings, and tax surprises.

Assets that can't be easily split

Leaving your family home "equally" to your children can lead to months or even years of unwanted maintenance, unpaid taxes and arguments, especially when they can't agree on selling, renting, or keeping it.

One sibling often ends up doing all the work while the other siblings wait for the cash to roll in. "Thankfully," says Evan Mills, financial adviser at Scholar Advising, "there are different ways to set up entities so the kids no longer have to worry about who's going to pay for the new roof or the property taxes."

But if that structure isn't available for some families, he goes on to say, a house can become the main area of disagreement within the family, and that's not what you want, especially at what's already going to be an emotional time.

Likewise, a family business split equally among siblings who never worked there can complicate decision-making or force a sale, essentially eliminating the livelihood of the child who runs it.

Reed contends that life insurance proceeds and retirement accounts also look equal on paper but produce different tax results depending on the sibling's tax bracket, and says that communication is the single most effective safeguard against discrepancies.

"Explain your reasoning while you're still alive. A letter of intent that accompanies your estate plan documents can reduce the 'Mom loved you more' narrative." Professional trustees, no-contest clauses, and updated beneficiary designations on non-probate assets further reduce the chance that the plan unravels in court," he says.

Sacrifices may go unrewarded

It's not uncommon for one child who becomes the default caregiver — living nearby for years, driving to appointments and managing medications — to feel they deserve a greater inheritance when compared to the sibling who only visited twice a year. This scenario can easily lead to bitterness and resentment. In the same way, handing your big spender the same lump sum as your penny pincher can often hurt more than help.

Trusts with spendthrift provisions mainly exist because equal gifts can backfire.

Beyond the financial side, the emotional impact is also rarely clear-cut. That's because inheritances are typically viewed as a substitute for parental love. Even wealthy children can experience an equal-but-unexplained estate plan as a form of rejection if their needs or circumstances differ. When estate lawyer Marvin Blum asked Warren Buffett and Charlie Munger about inheritances at the 2022 Berkshire Hathaway annual meeting, Munger replied, "If you're going to treat them unequally, that is poison."

But a "split it equally" plan can cause many of the same problems: lawsuits, claims that Mom and Dad loved you more, or, worse yet, siblings who argue and never speak again. Many estate lawyers say that when decisions are left unexplained, families fight, even if the split looks even on paper.

That said, more kids favor "fair" over equal than parents do, by a 21-percentage-point margin, according to the same Kiplinger-Morning Consult survey.

A better approach exists

Brian Gately, managing partner at Anchyra Partners, argues that a better approach exists. "While the instinct to divide an estate into precise, equal percentages is understandable, rigid equality often fails to account for the unique realities of your children's lives, capabilities and callings."

He says that rather than viewing unequal divisions as favoritism, families should view estate planning as a customized toolkit designed to give each child the specific support they need to thrive. "By using modern trust structures, you can ensure that your less financially-inclined children are protected and your public-service-minded children are supported, all while preserving long-term family harmony."

Closing the inheritance expectation gap

The Kiplinger-Morning Consult survey revealed a stark disconnect: Parents are twice as likely to plan on leaving a meaningful inheritance as adult children are to expect one. Bridging that gap requires open communication and a big-picture view.

You'll need to weigh past financial support, individual sibling needs, and the mix of liquid and illiquid assets. Rather than defaulting to an equal split, work with an estate-planning attorney to tailor a strategy that makes practical sense. Ultimately, an inheritance isn't about picking a favorite child. It's about leaving a legacy that unites your family instead of dividing it.

More Trillion Dollar Talk

• The Trillion Dollar Talk
• We Asked 5,000 Americans About Inheritance. Here's What We Learned.
• What Happens When You Inherit a House — With Your Siblings

The Great Wealth Transfer is underway in the United States, with an estimated $124 trillion in assets expected to pass from older generations to younger ones over the next 20 years or so.

This massive wealth transfer has major implications for families. And according to a Morning Consult survey commissioned by Kiplinger, most heirs feel ready to manage the money they will receive.

Top of mind, according to those surveyed by Morning Consult, is providing for their family, while paying off a mortgage and improving a home come in second. Not far behind is investing their new windfall to grow their own wealth. But with a seemingly endless amount of assets available to invest in, how do you choose the right one for you?

Here, we attempt to narrow the field with our short quiz on how to invest your inheritance, or whether you even should. While this is no substitute for meeting with a financial adviser, which is the best way to figure out what is right for you, it's a good way to test your knowledge.

And don't worry if you miss a question or two. The articles we link to below give deeper insight into investing and portfolio management.

More on investing and inheritance from the Kiplinger team

• The Trillion Dollar Talk
• I'm 45 and I’ve Barely Invested in the Stock Market. I Recently Inherited $50,000. What Should I Do?
• 5 Core Stocks Every Investor Should Own in 2026 and Beyond
• The Asset Location Rule for Income Investments in Retirement
• Why ETFs Are One of the Easiest Ways to Start Investing
• 5 Best Index Funds for Long-Term Growth
• Which Capital Gains Are Taxable and How to Calculate Your Tax
• How Your Inheritance Actually Gets Taxed: From Stepped-Up Basis to IRA Rules
• Best Online Brokers and Trading Platforms for 2026

When you think about the inheritance you'll pass down to your heirs, you're likely thinking about your home, your savings, and maybe a few treasured family heirlooms. You're probably not thinking about things like your home insurance or car insurance. But when it comes time to settle your estate, your insurance policies are just as important as everything else.

There are four common insurance-related problems executors face, according to Evan Farr, Certified Elder Law Attorney and retirement planner practicing in Virginia, Maryland, and Washington, D.C. "These include failing to recognize that a policy existed; out-of-date beneficiary designations; lapse of coverage because premiums were not paid on time; and ambiguity surrounding whose responsibility it is to collect proceeds (the estate or designated beneficiary)."

To help prevent these problems, your executor needs to know about all of the insurance policies you have, even the ones you might not think are relevant.

How overlooked insurance policies cause headaches for your executor

Some of the most obvious issues that can come up involve life insurance. Nearly half of parents said life insurance is a key piece of the estate their children will inherit, according to a survey of over 5,000 Americans Kiplinger conducted in partnership with Morning Consult.

But if your heirs don't know that life insurance policy exists, they may not know to file a claim. And if the life insurance beneficiary you designated years or even decades ago is still listed on the policy, the benefits might not go where you now want them to go.

Since a life insurance payout can represent a significant part of the financial legacy you leave behind, it's essential that you make your policy easy to find and make sure your beneficiaries know it exists. Otherwise, a payout could be delayed while your loved ones try to locate the policy or determine who is entitled to the proceeds.

That communication may be especially important. A Morning Consult survey commissioned by Kiplinger as part of our Trillion Dollar Talk campaign found that among adult children who knew their parents had a will, estate-planning documents, or a designated beneficiary, 35% didn't know how to access them. Making sure your executor and beneficiaries know where to find important insurance information can help close that gap.

Executors can also run into problems with home or car insurance. While an estate is being settled, the executor generally needs to make sure its assets remain appropriately insured. That can mean contacting insurers and determining what coverage needs to remain in place.

For example, if a fire, theft or other covered loss occurs while a home is part of an unsettled estate, problems could arise if coverage has lapsed or the insurer hasn't been notified of changes affecting the policy.

Your death can also change how an insurer handles an existing policy and who has authority to make changes or file a claim. Rather than assuming existing coverage will continue unchanged, your executor should contact the insurer to report the death and find out what documentation or changes are required.

With home insurance, in particular, your executor may also need to notify the insurer if the home becomes vacant or unoccupied for an extended period. Vacancy can affect coverage because an empty home can present different risks, including vandalism, theft and damage that goes unnoticed. Depending on the insurer and policy, different coverage or an endorsement may be necessary.

Similar issues can arise with any cars that are part of the estate. Your executor should contact the auto insurer before someone begins regularly driving an inherited vehicle or before coverage is canceled or changed.

Who is covered to drive the vehicle and how long existing coverage continues after the policyholder's death can depend on the policy and insurer. Giving your executor the information they need to contact the insurer and handle coverage appropriately can help protect both the vehicle and the estate.

How to make sure your executor can find your insurance policies

Whether you keep paper copies of all of your policies or you've gone digital, the easiest way to keep track of your insurance is to create a single sheet listing every insurance policy you own.

"A consolidated inventory of all of your insurance policies is perhaps the single most valuable thing you can leave for your executor," Farr said. That inventory should include the following details for each policy:

• Name of the insurance company
• Policy number
• Your agent or broker's name and contact information if you have one
• What the policy insures. This can be a broad label like home insurance, car insurance, or term life insurance. But you should also mention any riders or supplemental coverage here, too.
• Your current premium amount and how frequently you pay it (i.e. - monthly, quarterly, annually).
• Where to find copies of the actual insurance policies. If you have them downloaded as PDFs, you can link to those files in the spreadsheet where you're keeping this inventory. If you access them via an online portal, note where your executor can find those login details. If you keep paper copies, note where that paperwork is stored.

You can keep all of this information in a spreadsheet on your computer. Farr recommends updating it annually as details like premiums and coverage types change. If you switch your home or car insurance for a better deal, however, make sure to update the inventory right after you make the switch.

Writing out this inventory isn't enough on its own. The next step is to make sure your executor knows it exists and how to find it. "Ideally this document would be made available to your executor via a secure digital storage system (like a password-protected cloud-based file share or an encrypted digital safe)," said Farr.

The key is to make sure you store your financial documents, including insurance policies, in a way that is accessible enough to the person who needs the document, but secure enough that no unauthorized person can get ahold of your detailed policy information.

Related content

• How to Organize Your Financial Paperwork for Your Heirs
• Avoid These 12 Common Estate Planning Mistakes
• How Much Life Insurance Do You Need?
• What to Do When You're the Executor of an Estate

Right now, I'm watching three of my closest friends' families fall apart in slow motion.

The circumstances are different, but the arguments sound remarkably similar:

"Mom already gave him money for years."

"Dad told me something completely different."

"Why did she get more?"

"Who gets the house?"

"Was Dad even capable of making that decision?"

What I'm watching isn't unusual. Inheritance can bring out feelings that have been sitting there for years. In a 2025 Trust and Will survey, 38% of Americans who had shared their estate plans with family said those conversations led to disagreements.

Caregiving responsibilities among adult children aren't always shared equally, which further complicates inheritance decisions. One child lives 10 minutes away. The others live three states away. At first, she's helping Mom out. Then she's sitting through medical appointments, figuring out what the doctor said and what needs to happen next, managing medications and emergencies, handling bills and perhaps cutting back at work.

Business Insider (paywall) reports that daughters make up roughly 61% of family caregivers overall, and nearly 70% of those provide round-the-clock care. The financial toll even has a name: The "daughter tax."

It can mean reduced work hours, missed promotions, paused retirement contributions and more than $7,000 a year, on average, in out-of-pocket caregiving expenses, according to AARP. Over time, the hit from lost wages and retirement savings can approach $295,000.

Then Mom dies and the will says everything gets split equally.

The daughter is thinking, "I gave up years of my life and spent my own money taking care of Mom." Her siblings are thinking, "Mom said we split everything equally."

Was she supposed to be reimbursed? Compensated? Did Mom intend to leave her more?

Parents: Your money should take care of you

Before you start mentally dividing your assets among your kids, ask yourself: What if I need that money?

According to Kiplinger's Trillion Dollar Talk survey, conducted in partnership with Morning Consult, roughly two in five families have never discussed inheritance plans.

Of course, parents aren't obligated to tell their adult children how much they have or what they're going to inherit. But there's another conversation I think you really should have: What money will be used to fund my long-term care should it be needed?

What if you or your spouse require years of in-home care, assisted living or memory care? What if you need to retrofit the house so you can stay there? Which assets will pay for it, and who manages the money if you can't?

The inheritance your kids may have in their heads today could look very different after five or 10 years of care. And if you never talk about that possibility, you're setting everyone up for assumptions, surprises and, yes, conflicts.

My friend Beth Pinsker, CFP and MarketWatch columnist, wrote My Mother's Money: A Guide to Financial Caregiving after managing her own mother's finances and care. At one point, her mother's caregiving costs reached about $12,000 a month.

There may be much less inheritance after you pay for your own care. There may be none. That's ok. The inheritance is what remains after you take care of yourselves.

That's what I'd talk about with the kids: Here's how we intend to pay for our care. Here's who will handle the finances if we can't. Here's what we may need from you — and what we don't. That way, if the inheritance changes dramatically, nobody is left wondering what happened to Mom and Dad's money.

Equal isn't always fair

Parents often assume an equal split is safest. Two children? Fifty-fifty. Three? One third each.

But maybe you gave one child $100,000 toward a house. Was that simply a gift or an advance on an inheritance? Maybe another child has significant health or financial needs. Maybe one wants the family house while the others want cash.

If you decide on an unequal split, understand how it might be heard. "Sarah needs more help" can easily become, "Mom cares about Sarah more."

You don't need to disclose your net worth or give everyone a preview of the will. But if you're making a decision that could surprise one of your kids, tell them why.

Here are the steps I advise anyone in this situation to take:

1. Head off the big fight now

Keep your will, trust and beneficiary designations current. Be clear whether a substantial lifetime gift is simply a gift or something you expect to count against an inheritance.

If one child is spending significant money on your care, decide whether those expenses will be reimbursed.

Think carefully about whom you name as executor or trustee, especially if that person is also an heir. And ask who actually wants the house, jewelry, furniture or Dad's watch.

Don't assume you know. The point isn't to make everyone happy with every decision. It's to make your intentions clear while you can.

2. Bring in a neutral voice

This is also where a good fee-only financial adviser can do much more than manage investments. There are several qualified advisers in my Wealthramp network who are helping families navigate this situation.

The right adviser can model what several years of care could do to your finances, put numbers around different inheritance choices, look at whether one child can realistically afford to keep the family house, and help you think through these decisions without being emotionally involved in them.

Your adviser isn't your estate attorney. The adviser helps you work through the financial choices; the attorney makes sure those choices are properly documented. Ideally, they work together.

3. While you still can, talk about it

I keep coming back to my three friends. In these families, only one parent is still alive, and even then, it's too late for the conversation I'm talking about. The decisions have been made, and the lines have been drawn.

So to my friends who are parents with adult kids: Have these conversations now. Don't leave your kids to guess what you meant later.

And to my friends who are already in the middle of this, I hope you can find your way through it without losing each other in the process.

Related Content

• The Caregiver Penalty: What Women Need to Know Before Hitting Pause on Their Career
• Caregiving Is a Stealth Retirement Expense for Women: I Should Know
• How to Leave Different Amounts to Adult Children Without Causing a Rift
• The Three Biggest Fears Keeping Retirees Up at Night
• I Didn't Think I Needed an Estate Plan Until This Happened

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

They say "you can't take it with you." Egypt's pharaohs might have agreed to disagree, but the baby boomer generation seems to understand this fact of life.

Financial experts have long expected that over the next two decades, baby boomers (and members of other older generations) will pass along over $100 trillion to spouses, children and other heirs — a phenomenon dubbed the "Great Wealth Transfer."

We'll see what actually happens when those assets start landing in new accounts, but according to a Citizens Bank survey of 1,500 U.S. adults, the majority (60%) said they'd invest at least part of it. And in a new survey by Morning Consult, commissioned by Kiplinger for our Trillion Dollar Talk campaign, 15% of adult children said they'd use an inheritance to "invest and grow wealth," the third most popular response after providing for the family and investing in a home.

Why not? Many Americans are behind on their own retirement savings, and even those who are on track wouldn't complain about affording a cushier post-career lifestyle. And some in that number might already be thinking several decades down the road when it's time to repay the gesture by passing along their wealth to their own spouses and children.

As one survey respondent told Morning Consult/Kiplinger, they'd put an inheritance from their parents "into investments," since "that's what pretty much helped them earn it in the first place."

Today, we'll look at five stocks for the task — each of which already boasts a place among the greatest wealth-generating equities of the past century. Data is as of August 28.

Most stock-market wealth creation has come from a few dozen companies

If you're looking to grow your wealth, there are few better places to start than with a 2026 study from Hendrik Bessembinder, a finance professor at Arizona State University's W.P. Carey School of Business, who researched the investment outcomes from nearly 30,000 stocks over the 100 years between 1926 and 2025. In the report, he outlines the greatest wealth creators over that period.

What constitutes shareholder wealth creation (SWC)?

"The improvement (or decline) in the wealth of a company's shareholders in aggregate over the period that the company's shares were listed on the public stock markets, as compared to the outcome that would have been attained had the invested capital instead earned one-month Treasury bill returns. SWC considers net distributions (dividends, spinoffs, share repurchases, new share issuances, etc.)."

Our own Dan Burrows explains that "T-bills are a kind of stand-in for opportunity cost. And the difference [in performance] over time between the two investment choices, when positive, is wealth creation. It's the enhancement."

Importantly, Bessembinder found that wealth creation within the stock market was highly concentrated among just a handful of names. "Just 46 firms account for half of the $91 trillion in net wealth creation over the full century," he says.

And that's where we'll start our search for stocks that you can use to build your own wealth, to the point where you have something substantial to leave behind for your kids. Each company mentioned here is among those 46 firms Bessembinder identifies and has certain characteristics and advantages that point toward their ability to continue generating returns well in excess of that T-bill benchmark.

Note: Lifetime wealth creation is measured starting at the initial stock-market listing or January 1926, whichever is more recent, through December 31, 2025.

Merck & Co.

• Sector: Healthcare
• Market value: $366.2 billion
• Lifetime wealth creation: $519.1 billion
• Percent of market total: 0.57%

Merck & Co. (MRK) is a healthcare-sector giant whose roots go back all the way to 1668 with the founding of Germany's Merck Group, which created the American affiliate we all know in 1891.

The company is responsible for blockbuster treatments and vaccines such as Gardasil (HPV), Januvia (type 2 diabetes), Zocor (high cholesterol) and most notably Keytruda, which has generated nearly $180 billion in global sales since its debut in 2014. It also has developed a large animal healthcare business.

The formula for continued wealth creation in just about any pharmaceutical or biotechnology name is pretty straightforward: They need to discover and/or purchase successful treatments that are lucrative enough to offset any declines in their established drugs. But that's a particularly tall task for MRK given that Keytruda, which makes up roughly half of the company's revenue, will see its core patent expire in 2028.

How will Merck counter this? Well, for one, it has compiled a promising developmental pipeline of treatments, including infinatamab deruxtecan (extensive-stage small-cell lung cancer), opevesostat (metastatic castration-resistant prostate cancer) and tulisokibart (ulcerative colitis and Crohn's disease).

But perhaps more importantly, it has built a "patent wall" of more than 1,200 patents across 53 countries, regions and territories, according to a report from The Bureau of Investigative Journalism:

"This investigation found 211 granted patents that help protect Keytruda through to at least 2042 — a full 14 years after the originals expire. There are also at least another 337 'pending' patents that, if granted, could also extend the drug's reign. The vast majority of the applications came after the drug's initial approval in 2014."

And now, Merck appears on the precipice of a breakthrough. In August, Merck and Moderna (MRNA) announced that their jointly developed experimental mRNA cancer vaccine met the primary goal of a Phase 3 clinical trial. This large trial of more than 1,000 melanoma patients showed that a combination of the intismeran vaccine and Keytruda was more effective in preventing the return and spread of melanoma and resulted in fewer side effects than the use of Keytruda alone. It's another boon for Keytruda, as doctors sometimes will not recommend it because of the risk of side effects.

In addition to all of the above, Merck pays a dividend that has grown for 16 consecutive years and currently yields an above-average 2.3%. It also throws billions of dollars at stock buybacks in most years.

Walmart

• Sector: Consumer staples
• Market value: $820.8 billion
• Lifetime wealth creation: $1.2 trillion
• Percent of market total: 1.32%

Why would we look to Walmart (WMT) to be a top-tier wealth creator given that it's a big-box retailer during the era of e-commerce?

Well, for one, the death of brick-and-mortar retail has been heavily exaggerated. While e-commerce has been growing both nominally and as a percentage share of U.S. retail sales since its creation, brick-and-mortar still accounts for the vast majority (77%) of dollars spent. And after a big leap in online buying adoption during COVID, e-commerce's penetration growth has moderated.

But also, Walmart is the second-largest online retailer in America. It's a distant second to Amazon (AMZN), sure, but e-commerce accounts for roughly a quarter of Walmart's total U.S. sales, which, by the way, still dwarf Amazon's domestic retail revenues.

Believe it or not, the sizable majority (62%) of its wealth creation since joining the public markets in 1972 has come since 2016.

Walmart is a retailer, so its ability to continue being a significant creator of wealth going forward largely rests on the power of the American consumer. Yes, Walmart is technically considered a consumer staples company given that it deals in groceries and personal products that have a certain level of backstop, but much of what it sells is discretionary in nature.

As for other shareholder rewards? WMT has a modest payout that's just below the S&P 500's yield, but it's a Dividend King that has grown its cash distribution for 53 consecutive years — and should that continue, shareholders should continue to enjoy higher and rising yields on cost.

Walmart also repurchases gobs of its own stock, spending between $2 billion and nearly $10 billion on buybacks every year for the past decade.

Amazon.com

• Sector: Consumer discretionary
• Market value: $2.87 trillion
• Lifetime wealth creation: $2.3 trillion
• Percent of market total: 2.49%

We'll also look to No. 2 retailer (and No. 1 online retailer) Amazon.com (AMZN), which, at $2.3 trillion, is also the No. 5 wealth creator of the past 100 years.

But its future growth will depend on much more than its retail business.

Amazon also offers streaming services in the form of Amazon Prime Video and Amazon Music. It's an AI hyperscaler. It has an ad network. It provides supply chain services. It delivers digital and physical care options through One Medical and Amazon Pharmacy. It offers grocery delivery and has a private-label food brand.

And, as we point out in our argument for Amazon as a core stock holding, its Amazon Web Services (AWS) cloud provider arm is "the straw that stirs the drink." In fact, Amazon believes AWS alone could become a $1 trillion-a-year business.

The argument for AMZN to continue creating wealth over the long term is not just these divisions, but Amazon's ability and willingness to either build out or acquire its way to new lines of business (or drastically expand its existing businesses). In just the past few years, for instance, Amazon has purchased autonomous driving technology firm Zoox, entertainment company MGM Studios, the aforementioned One Medical and satellite telecommunications firm Globalstar.

Despite its frequent spending, AMZN still sits on $122 billion in cash and short-term investments and a similar sum of long-term investments. It doesn't pay a dividend and it infrequently repurchases stock. But as long as Amazon has no compunction about plowing money into growth, it could continue to expand the wealth you hope to eventually leave to your heirs.

Nvidia

• Sector: Technology
• Market value: $5.25 trillion
• Lifetime wealth creation: $4.6 trillion
• Percent of market total: 5.03%

Nvidia (NVDA) is the No. 2 wealth creator of the past 100 years, producing $4.6 trillion in excess of a Treasury-bill benchmark since the chipmaker came public in 1999.

Just about everyone reading this knows why this tech stock has done so well in recent years: its role in the expansion of artificial intelligence.

"We believe the NVDA shares have much further to go and believe that most technology investors should own NVDA in the age of AI and GPU-driven applications acceleration," says Argus Research analyst Jim Kelleher, who rates shares at Buy. "We recommend establishing or adding to positions in this preeminent vehicle for participation in the AI economy."

The unfettered growth of artificial intelligence isn't a slam dunk by any means. Public opinion has turned sharply negative on both AI and especially the data centers popping up to propel the technology. And among AI-related stocks, few are more tightly tethered to the technology than Nvidia.

But the reason to be optimistic about Nvidia is everything else the chipmaker is involved in: gaming, graphics, traditional data centers, cloud computing, autonomous vehicles, climate forecasting, genomic sequencing and much, much more. As long as people need technology broadly, what Nvidia produces seems likely to be in demand.

Nvidia also has nearly $100 billion in cash and investments that it could put to work if needed. And it churns out tens of billions of dollars in free cash flow every year.

NVDA has stepped up stock repurchases drastically in the past couple of years, accelerating from nearly $2 billion in 2021 to $12 billion in 2023 and $48 billion in 2025. And while its 25-cent-per-share dividend comes out to just half a percent in yield, that dividend is 25 times what it was a year ago, and Nvidia has a world of room to expand it further.

Apple

• Sector: Technology
• Market value: $4.5 trillion
• Lifetime wealth creation: $5.0 trillion
• Percent of market total: 5.52%

Last on our list but first among wealth creators of the past 100 years, Apple (AAPL) appears likely to continue delivering far better returns than we could get from T-bills.

Apple has been one of the greatest growth stocks of the past few decades because of its ability to create category-defining devices like the iPod, iPad and iPhone.

But the reason why we can likely count on Apple to continue doing so is that the company has historically never been a first mover. Instead, it takes emerging technologies and perfects them.

The Macintosh wasn't the first personal computer, but it popularized personal computing thanks to its all-in-one design, graphical interface and mouse. The iPod wasn't the first MP3 player, but its massive storage and simple user interface made it a hit. The iPhone came after the likes of the BlackBerry and Palm Treo, but it became a dominant smartphone thanks to its touchscreen, web browsing and App Store.

Incredibly, the vast majority of Apple's wealth was created after the 2011 death of Steve Jobs. His replacement, Tim Cook, was less a product innovator and more of an operations and supply chain specialist who also understood the potential of services. Cook himself stepped down in September 2026, and was replaced by John Ternus, who helped oversee the development of the iPad, AirPods and Apple Watch, among other projects — but Cook will retain an important role with the company.

"Mr. Ternus, a 25-year Apple executive that joined Apple three years after Mr. Cook, has been an important part of Apple product launches for over two decades, and promoting him to CEO clearly shows Apple's emphasis on product at the center of the flywheel will remain," says Morgan Stanley analyst Erik Woodring (Overweight, equivalent of Buy). "Tim Cook remaining Executive Chairman and 'engaging with policymakers around the world' shows Tim will remain a critical conduit between Apple and political leaders around the world, a role Mr. Cook has excelled at."

From a financial standpoint, Apple boasts many of the same advantages as the other wealth-building stocks on this list. It has $62 billion in cash and short-term investments and an additional $84 billion in long-term investments that it can use for transformational acquisitions.

It's also a cash-flow machine that has been repurchasing $80 billion and $100 billion in AAPL shares every year since 2021. The dividend has also grown every year since 2012.

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It's been billed as the greatest financial windfall in history, a tidal wave of wealth washing from the richest generation ever onto their heirs. But the reality is far more complicated.

Aptly named the great wealth transfer, it's the handoff that research firm Cerulli Associates projects will total $124 trillion through 2048, with $105 trillion flowing to heirs and $18 trillion donated to charity. That wealth is flowing from the aging silent generation and baby boomers down to their children and grandchildren.

Once you account for a few other factors, though, "great" may be better described as "just OK." Visa Business and Economic Insights argues the spendable transfer is actually closer to $36 trillion from boomers over 20 years, once you deduct things such as debt, taxes and retirement spending.

Whatever the true figure turns out to be, the $60-trillion-plus gap between the two estimates shows how slippery this forecast really is. And it points to a bigger truth: Not everyone stands to catch the same share of this falling wealth.

Here's a sharper picture of who actually benefits — or doesn't — and how your own situation compares.

To those who already have much, much will be given

If you come from a wealthy family, chances are you'll be among the biggest beneficiaries of the Great Wealth Transfer. Cerulli estimates that households worth $10 million or more — about 2% of all households — account for roughly half the entire transfer.

The averages reflect that skew. While the average U.S. inheritance is about $46,200, according to Federal Reserve data, the median is far lower, because a handful of enormous transfers pull the average up. The bottom half of recipients average around $9,700; the top 1% average about $719,000.

Ultimately, most people get nothing at all, as only about one in three Americans ever receives an inheritance. So, if you're not expecting one, then — congrats, I guess? — you're in the majority.

Millennials stand to get a greater share, but may have to wait

If you came of age watching Dawson's Creek or Buffy the Vampire Slayer, there's a good chance you're set for a larger slice of the transfer.

That's because Cerulli's research projects that millennials will inherit the most of any generation over 25 years — around $46 trillion. But it's those who grew up with MTV, Gen X, that will inherit the most in the next 10 years, with $14 trillion versus millennials' $8 trillion.

Those hoping for a windfall to cover a home down payment or help start a family may have to wait. Federal Reserve analysis finds inheritance receipt peaks around age 60 — a natural result of a typical lifespan near 80 and a roughly 20-year gap between parent and child.

However, the growing recognition that heirs often get the money when they least need it is nudging some families to pass wealth on sooner. More than four-in-five parents (82%) said they have given their adult children financial help since age 18, according to a new survey by Morning Consult commissioned by Kiplinger for our Trillion Dollar Talk campaign.

Popularized by figures like Bill Perkins, author of Die With Zero, the idea is to help while children still need it, rather than when they're nearing retirement themselves.

The transfer won't touch the racial wealth gap

If any single factor sorts the winners from everyone else, it's this one. As with nearly every measure of pay and net worth, there's a stark racial disparity here.

White households are about 2.8 times more likely than Black households to receive any inheritance at all. And when they do, they inherit roughly 5.3 times as much as Black households and 6.4 times as much as Hispanic households, according to Penn Wharton estimates. Around a third of white families ever inherit, versus roughly one in 10 Black families, according to a 2023 study by the Boston Fed.

The gap holds even among those expecting something. An Urban Institute analysis finds the median Black renter who anticipates an inheritance estimates it at about $48,000, compared with $200,000 for the median white renter.

The Federal Reserve Bank of Boston study found that lifetime earnings and pension assets — not bequests — explain most of the racial wealth gap, which is a big reason the coming transfer is unlikely to close it.

Women benefit from the transfer before the transfer

When it comes to which sex comes out ahead, it's women who are positioned to receive more than men. But there's a key caveat.

The first handoff is often horizontal, not generational. Cerulli projects that some $54 trillion will move between spouses before it ever reaches a younger generation, with nearly $40 trillion of that going to widowed women in the boomer and older cohorts, who tend to outlive their husbands.

For many women, then, the wealth transfer is less a true inheritance than a stretch of sole control over a shared nest egg, frequently while absorbing the very late-life costs that shrink what's left to pass on.

Not all the wealth is inheritable, or at least, easily inheritable

An important distinction rarely makes the headlines: Not everything older generations have accumulated can actually be passed down.

A traditional defined-benefit pension typically pays income for life and then stops at death, or continues at a reduced rate to a surviving spouse. It generally leaves no lump sum for the kids. A 401(k) or IRA, by contrast, is an asset heirs can inherit outright.

As a result, two retirees with identical incomes can leave very different estates. The one living comfortably on a generous pension may pass on little, while the one who saved that same income in a 401(k) leaves behind a balance. Through 1980, nearly 40% of Americans had a traditional pension. The long shift toward 401(k)s and IRAs since then has, paradoxically, made retirement wealth more inheritable.

Parents on the older edge of the boomer cohort or in the silent generation more often spent full careers under traditional pensions that leave nothing behind, while those on the younger edge came up saving in 401(k)s. So, whether there's a balance to inherit at all can hinge partly on where your parents fall within their own generation.

A large share of boomer wealth isn't liquid, either. It's home equity. Realtor.com found boomers hold about $19 trillion in real estate, and for many families the house is the single biggest asset. Unlike a brokerage account, which heirs can sell and split in a day, a house is a single, illiquid asset that usually can't be divided without selling it.

Some states will tax you more

Where you and your parents live shapes what heirs keep. Thirty-three states levy no estate or inheritance tax at all. Twelve states plus Washington, D.C., impose an estate tax (paid by the estate), and a handful — Kentucky, Nebraska, New Jersey, Pennsylvania and Maryland, which has both — levy an inheritance tax (paid by the person who receives the money).

The catch is the exemption. The federal estate-tax exemption sits at a lofty $15 million per person in 2026, but several states start far lower — $1 million in Oregon, $2 million in Massachusetts — low enough that an ordinary home plus retirement savings can trigger a bill. It's part of why Florida, Texas and Nevada, which levy neither tax, are such popular landing spots for retirees.

To the original savers may go the spoils

Ultimately, the ones who benefit most from all this wealth just might be the ones who saved and invested it in the first place.

Many boomers intend to spend it themselves. In a Charles Schwab survey of affluent boomers, 45% said they'd rather enjoy their money while they're alive than preserve it as an inheritance.

Longevity is the main driver, with healthcare acting as much the culprit as hedonism. Fidelity estimates the average 65-year-old will spend about $185,000 on healthcare in retirement before long-term care even enters the picture. Money once earmarked for the kids becomes money spent on aging.

And boomers are increasingly aging in place. One survey even found 68% live in homes at least three decades old, many overdue for renovation, and most in no rush to downsize. That points to wealth that's more likely to be used up than passed on — put toward renovations or drained by late-life care.

Whether you're a clear winner or loser or something in between, it might be best to treat any inheritance as a bonus rather than a foundation. And have the awkward family conversation, because nearly 30% of American parents have no formal estate plan, including a will, the Kiplinger/Morning Consult survey found. In the end, the winners won't necessarily be the ones who receive the most. They'll be the ones who planned ahead.

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Inheriting an investment portfolio can feel like receiving a windfall. The tricky part is that the dollar value you see on the account statement isn't necessarily the amount you'll get to keep.

"A million dollars of inherited assets is not necessarily a million dollars of equivalent economic value," says David Simkowitz, founder and CEO of SimkowitzCo. "The type of account, tax basis, embedded tax liability and future income taxation all matter."

Taxes can take a bite out of sale proceeds. Inherited retirement accounts may come with distribution requirements that incur penalties if they're missed. The investments themselves may carry high fees or risks that don't make sense for your situation. And sorting it all out may require paying for tax, legal or financial advice.

Understanding these hidden costs of inheriting an investment portfolio before you start making changes can go a long way toward preserving more of the wealth you've received.

The tax bill may come later

Inheriting property generally isn't a taxable event, but that doesn't mean it's tax-free forever.

"For most individuals, it's not the inheritance that triggers a tax bill but the sale or distribution" of the assets you inherited, says Erin Wood, senior vice president of advanced planning at AssetMark.

There's plenty of confusion around that distinction. A 2026 Morning Consult survey, commissioned by Kiplinger, found that one-third of adult children are unsure if they'd owe taxes on an inheritance.

The actual tax consequences will depend on what you inherited and the type of account it was held in. Many taxable investments receive a step-up in cost basis to the fair market value on the date of death. The cost basis is the starting value the IRS uses to determine your gain or loss when you sell an asset.

With a stepped-up basis, "any unrealized capital gains accumulated during the decedent's lifetime are generally wiped away," says Tara Thompson Popernik, executive vice president of wealth planning at LPL Financial.

But make sure the correct basis is reflected in your brokerage account records before you sell. Popernik recalls one beneficiary who failed to correct the cost properly before selling and received a tax form reflecting significant gains that required help from a CPA to correct.

Income-producing investments can create other surprises. For example, interest earned on taxable bonds you inherit is generally taxable income. So if you previously only earned W-2 income, you "may now need to make estimated tax payments to cover the earnings from an inherited portfolio," Popernik says.

Other assets present their own tax wrinkles. Wood points to non-qualified annuities, where accumulated income may pass directly to the beneficiary rather than disappearing through a stepped-up basis. She also notes that state inheritance taxes can apply.

Retirement accounts can carry costly deadlines

Inherited retirement accounts are a different animal entirely. Traditional IRAs, for example, can contain money that hasn't yet been taxed. Many nonspouse beneficiaries are required to fully distribute an inherited IRA within 10 years of inheriting. And along the way, required minimum distributions (RMDs) may also apply.

"Missing an RMD on an inherited IRA is sometimes the biggest surprise, particularly because of the associated penalty," says Justyn Volesko, partner and co-head of the Cerity Partners Family Office.

You could face a 25% excise tax on the amount that should have been withdrawn, although that can drop to 10% if the shortfall is corrected promptly enough.

The moral of the story isn't that you should race to empty all inherited retirement accounts. Rather, you want to be aware of which rules and deadlines apply so you can act accordingly.

Fees and professional costs can add up

Unfortunately, taxes and penalties aren't the only expenses that can quietly eat into your inheritance. The investments themselves may also be expensive.

"I have seen inherited portfolios in mutual funds with high expense ratios that are easy to miss," Volesko says. The adviser managing the portfolio may also be charging a fee.

Then there are the costs of sorting out the inheritance itself. You may end up paying for legal or tax advice, investment management or even estate valuation work. Those bills can sting, but trying to avoid every professional fee can also backfire.

"I would distinguish between a professional cost and a professional value," Simkowitz says. "Paying for coordinated tax, legal and financial advice can sometimes prevent a beneficiary from making a much more expensive mistake."

Just make sure the professionals you work with aren't operating in isolation. "An inheritance should be treated as a coordinated planning event, not simply an asset-transfer event," Simkowitz says.

Doing nothing can cost you, too

This last hidden cost may be the sneakiest of them all: The cost of holding onto a portfolio that was designed for someone else.

There can be an inclination to keep an inherited portfolio intact to honor the person who bequeathed it to you, "but keeping a portfolio unchanged is itself an investment decision," Simkowitz says.

The person you're inheriting from may have had a different timeline, risk tolerance or financial goals. "A portfolio designed for an older investor who prioritized income may not be appropriate for a younger beneficiary focused on long-term growth," Popernik says.

The portfolio may also have concentrated stock positions, especially if your benefactor spent decades building a business or accumulating shares of a single company. "What represented wealth creation for one generation can represent unnecessary concentration risk for the next," Simkowitz says.

This doesn't mean you need to sell Grandma's favorite stock on day one, but each holding should be evaluated based on its own merits.

"I would encourage beneficiaries not to ask only, 'What did I inherit?' but also, 'Why do I still own it?'" Simkowitz says.

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What happens to the money in your savings accounts when you pass on? Making sure those funds go where you intend is an important part of estate planning, yet savings accounts can be easy to overlook.

Without the right designations, your savings could end up going through probate, potentially delaying when your heirs can access the money. That could leave your family paying out of pocket for expenses you intended those savings to cover, such as final expenses.

A new survey conducted by Morning Consult on behalf of Kiplinger found that just 36% of parents have designated beneficiaries on retirement accounts or life insurance policies, highlighting how easy this relatively simple estate-planning step can be to overlook.

Here's how to avoid these common pitfalls, streamline the transfer and protect your financial legacy.

What happens if you don't name a beneficiary?

If you die without naming a beneficiary on an individually owned savings account, the money might become part of your estate and have to go through probate. Once the bank learns of your death, it could restrict access to the account until the person legally authorized to handle your estate can take control of the funds.

Who ultimately inherits the money will depend on your estate plan and state law. If you have a will, the funds generally become part of the estate distributed according to its terms. If you die without a will, known as dying intestate, state law determines which relatives inherit your assets.

Read more: Probate: The Terrible, Horrible, No Good, Very Bad Side of Estate Planning

If you already have a trust as part of your estate plan, naming the trust as the beneficiary might be one option. Danny Beckwith, a certified financial planner and financial adviser at First Financial Consulting, told Kiplinger, "Name the trust as your beneficiary. It will make it a lot easier to work with the banks."

Even if you've already named beneficiaries, it's important to review your designations periodically, particularly after major life changes such as a marriage, divorce, birth or death. Beckwith suggests reviewing beneficiaries every other year.

"You wouldn't believe how many mistakes happen, and by clarifying, you're providing peace of mind that your legacy will go on as you intended," he says.

But you don't necessarily need a trust to help your savings account avoid probate. Another option is to name a payable-on-death beneficiary.

How to designate someone as a payable-on-death beneficiary

Another option is to add a payable-on-death (POD) beneficiary to your savings account. After you die, the funds generally pass directly to the named beneficiary without going through probate.

The beneficiary will need to contact the bank and provide the documentation it requires, typically including identification and a certified copy of the death certificate.

To add a POD beneficiary to your savings account:

• Contact your bank and ask how to add a payable-on-death beneficiary.
• Provide the beneficiary information the bank requires, which might include their full legal name, date of birth, address and Social Security number.
• If you're naming multiple beneficiaries, specify how you want the funds divided among them, often using percentages.
• Complete and submit the required paperwork. Depending on the bank, some documents might need to be notarized.

Keep in mind that avoiding probate doesn't necessarily eliminate potential tax considerations. Depending on where you live and the size of your estate, state estate or inheritance taxes could still apply.

What your family should know

The most helpful gift you can leave your heirs is clarity. Beckwith recommends, "I am a huge fan of parents letting their children know where everything is and what they will receive. Where we see the biggest problems is that the kids don't know what they're inheriting; it can be daunting to find where everything is."

Clear communication ensures your legacy reflects your values while also preventing sibling conflicts. Yet many families aren't having those conversations. The Trillion Dollar Talk survey found that two in five families have never discussed inheritance.

While you don't have to discuss exact dollar amounts, giving heirs a window into what they're receiving can help them plan now, so they don't have to contend with that when the time comes.

It also prevents them from having to hunt for accounts or legal documents they'll need during an already stressful time. Knowing where to turn can give them peace of mind while honoring your legacy.

A checklist for heirs

Create a document that serves as the roadmap for your beneficiaries. Keep this document in an accessible location known to your heirs and include these essentials:

• A list of all financial institutions where you hold accounts.
• Specific account numbers and the type of each account (e.g., savings, checking, brokerage).
• Updated contact information for your financial planners, advisers, or attorneys who can assist with the transfer.

Ultimately, you’ve worked hard to build your savings, and a little planning now can make things easier for your loved ones later.

Contact your bank to review your beneficiary designations and make sure they still reflect your wishes. It’s also a good time to create or update a roadmap showing your heirs where your accounts and other important financial information can be found.

Taking these steps now can help ensure your money goes where you intend and give your family one less thing to sort out during an already difficult time.

If you're an heir trying to make sense of an inheritance, or you want help preparing your own finances for the next generation, a financial adviser can help you understand your options and build a plan that fits your goals.

Use the tool below to connect with a vetted financial professional who can help:

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Dear Wealth Wise: How can I put my RMDs and cash savings back to work so I can leave a tax-free inheritance for my adult kids? — None For Uncle Sam

Dear None for Uncle Sam: In the coming years, the Great Wealth Transfer is expected to produce trillions of dollars in inheritance. But that doesn’t mean all wealth holders are planning for that transition mindfully.

Here, our reader wants to know how they can leave their children an inheritance the IRS won’t take a piece of. While leaving a 100% tax-free inheritance might be challenging, people in this situation can still use several strategies. Here’s what the experts suggest.

Do a Roth conversion

If you have the bulk of your assets in a traditional IRA, passing that account to your heirs could put them in a tricky spot.

As Eric Croak, CFP and president of Croak Capital, explains, when you have grown children who inherit a traditional IRA, they only get 10 years to empty the account. But adult children often end up withdrawing those funds during their peak earning years, subjecting themselves to high tax rates.

"This seems like an unappealing tax consequence, especially during their highest earning years as the 32% tax bracket begins at $201,775 for a single filer," Croak says.

That’s why Croak recommends Roth conversions, which you can do even if you’re already on the hook for required minimum distributions (RMDs). If your children inherit a Roth IRA, they’ll still be subject to the 10-year rule. But there are a few key differences.

First, says Croak, "no distributions are mandatory during those 10 years," whereas with a traditional IRA, your adult children generally must take RMDs annually if you, the account holder, are old enough to be subject to them.

Perhaps the biggest benefit of inheriting a Roth IRA is receiving all distributions tax-free, Croak explains.

If you’re going to do a Roth conversion, it’s important to get your timing right, Croak says.

"First, take the RMD for the year since an RMD itself cannot be converted," he explains. "Then convert additional amounts of pre-tax savings and pay taxes now."

Use your RMDs to buy permanent life insurance

If you’re on the hook for RMDs, Croak says another option is to use that money to purchase a permanent life insurance policy on which your adult children are designated as beneficiaries.

"The RMD will be subject to tax when distributed as always, but the after-tax dollars can purchase a death benefit that will be generally income-tax-free to the beneficiary," Croak explains.

However, he cautions, this strategy "makes sense only if you are insurable at a reasonable cost."

Lean on a taxable brokerage account

It’s common for retirees to favor tax-advantaged accounts such as IRAs in the course of building and holding their wealth. But if you’re focused on leaving an inheritance, Croak says, then it pays to lean on a taxable brokerage account in addition to or instead of a permanent life policy. As you take your RMDs, reinvest them strategically.

"Any cash beyond the premiums should reside in a brokerage account rather than a savings account since appreciated stock can receive a stepped-up basis at death, while the interest income on cash would be subject to tax at your highest marginal tax rate," Croak says.

Consider cash gifts

If you'd like to start gifting while you're alive, one simple option is an annual gift. The annual gift tax exclusion in 2026 is $19,000 per recipient (couples can double this to $38,000 per recipient).

Before you give your kids the money while you are still alive, ask yourself three key questions: Do they really need the money now? Can you afford it? Will this be a gift to one child or all your heirs?

Be strategic with who inherits which accounts

Leaving a Roth IRA as an inheritance is a true gift. But if your balance is large, doing a full Roth conversion might not make sense from a tax perspective.

In the course of sparing your kids a tax bill, you don’t want to drive yourself into an unreasonably high tax bracket. Large Roth conversions could also push you into IRMAA territory, resulting in exorbitant Medicare premium costs.

Given all that, Will Allen, founder and financial adviser at Sentara Capital, says that your tax bracket coupled with your children’s tax brackets should drive a lot of the math.

"A $600,000 IRA drained over 10 years on top of a 55-year-old's salary can come out at 32% plus state tax," Allen says. "Converting at 24% now to avoid that is a wise move."

That said, if you’re expecting to pass away relatively soon and your children, based on their incomes, might not creep into higher tax brackets for quite some time, a Roth conversion might not make sense at all. If your children can empty a traditional IRA in 10 years and do so at a 12% or 22% tax rate, it doesn’t pay for you to convert at 24%.

You’ll need to look at the math from every angle before making Roth conversions a core part of your inheritance strategy. If you only do a partial conversion, Allen says, "Split the beneficiary designations by bracket instead of leaving everything equally. Roth and taxable to the high earner, traditional IRA to the lowest earner."

Know which accounts not to leave

If your goal is to leave a tax-free inheritance, there’s one account you should steer clear of — a health savings account, or HSA, says Jordan Smyth, CFA, president and senior wealth adviser at Glassy Mountain Advisors.

Although HSAs are often touted for their triple tax advantage, that benefit effectively disappears when an adult child inherits one.

"Don’t leave an HSA to your children," Smyth says. "The inherited balance would be taxable to any non-spouse heir in the first year. Spend that money, and leave them a Roth IRA instead."

State taxes and capital gains could still apply

These are tried-and-true ways to avoid income tax. However, state inheritance taxes or federal estate taxes could apply, depending on the estate's size and the state in which you live.

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our writers and experts, in this advice column, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial adviser regarding any questions you may have in relation to the matters discussed in this article.

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A parent leaves the family home to you and your siblings. It might sound straightforward, but inheriting a house together can quickly raise financial, legal and emotional questions. Unlike cash, a home isn't easily divided. One sibling might want to sell, while another hopes to keep the property in the family.

What happens next can depend on the estate plan, how the property was titled and state law.

For many families, the home could be one of the biggest assets about which they'll have to make those decisions. A Morning Consult survey commissioned by Kiplinger for our Trillion Dollar Talk campaign found that 33% of parents say real estate, including their home, will make up the greatest share of their children's inheritance. Yet just 24% of adult children expect real estate to account for the largest share of what they inherit.

That gap is one reason it can help to talk through expectations before an inheritance becomes an immediate decision.

If you inherit a home with siblings or other family members, understanding your ownership rights, costs and options can help you decide what to do with the property, and hopefully avoid unnecessary conflict along the way.

What does it mean to inherit a house with someone else?

If a home is left to multiple beneficiaries, you aren't necessarily inheriting your own physical portion of the property. Instead, you might each receive an ownership interest in the home.

For example, if a parent leaves a home equally to three children, each child might inherit a one-third ownership interest in the property. The exact ownership arrangement will depend on the estate plan, deed and applicable state law.

You also might not be able to take control of the property immediately. If the home is part of an estate that must go through probate, the executor or personal representative may need to handle the property while the estate is being administered. A home transferred through a trust or certain other arrangements could be handled differently.

Before deciding what to do with the house, find out exactly what you're inheriting and what comes with it. That includes determining whether there's an outstanding mortgage, property tax bill, lien or other obligation connected to the home.

The estate's executor or attorney can help clarify who owns the property, when beneficiaries receive control and whether any debts or other issues need to be resolved first.

Your first decision: Keep, sell or buy someone out

Once ownership is clear, the heirs generally need to decide what they want to do with the property. There are three common options:

1. Sell the home: If everyone agrees, the heirs can sell the property and divide the net proceeds based on their respective ownership interests. This might be the simplest option if no one wants the house or when beneficiaries would rather receive cash.
2. Have one heir keep it: Perhaps one sibling wants to live in the home or has a stronger attachment to it. That person could potentially buy out the other beneficiaries' ownership interests. Getting an independent appraisal can establish a fair value for the property, and the heir keeping the house might need cash or financing to complete the buyout and potentially refinance an existing mortgage.
3. Keep the property together: You could also continue owning the home jointly. Some families keep an inherited house as a vacation property, rental or shared family home. If you go this route, consider creating a written agreement covering how the property can be used, how expenses will be divided and what happens if someone eventually wants out.

The situation becomes more complicated when the heirs don't agree. One co-owner can't simply sell the entire property without the involvement of the others. However, depending on state law and the ownership structure, a co-owner might be able to ask a court for a partition.

Depending on state law and the circumstances, a partition proceeding can result in a court-ordered sale of the property, with the proceeds divided among the owners according to their ownership interests.

Because a court proceeding can add time, expense and tension, it's usually worth exploring a voluntary sale, buyout or another negotiated solution first.

Decide who's paying for the house in the meantime

Even if you eventually decide to sell, you could own the house for months while the estate is settled, belongings are removed, repairs are completed and the property is listed.

During that time, the bills don't disappear. Depending on the property, heirs might have to account for:

• Property taxes
• Homeowners insurance
• Mortgage payments
• Utilities
• Repairs and routine maintenance
• Necessary improvements or preparation before selling the home

Try to decide early who'll pay each expense and keep good records. If one sibling pays $5,000 for necessary repairs, for example, the heirs should agree on whether that person will be reimbursed from the sale proceeds before the remaining money is divided.

It's also important to discuss what happens if one heir lives in the home. Will that person pay rent to the other owners? Will they cover the utilities or a larger percentage of the mortgage, taxes and maintenance instead?

There's no single arrangement that works for every family, but putting your agreement in writing can reduce misunderstandings later.

Understand the tax implications before you sell

Simply receiving an inheritance generally doesn't mean you'll owe federal income tax on the value of what you inherit. However, selling inherited property can have tax consequences.

One important concept to understand is the stepped-up basis. In most cases, the tax basis of inherited property is adjusted to its fair market value as of the date of the owner's death.

Suppose a parent purchased a home for $150,000, and it's worth $400,000 when they die. The heirs' tax basis would generally be $400,000, rather than the parent's original $150,000 purchase price. If the heirs later sell the home for more than their adjusted basis, they could owe capital gains tax on the difference.

That distinction can make a major difference in the tax bill, and it's one reason getting a reliable valuation of the property can be important.

When several people inherit the property, each person's ownership interest also matters when determining their portion of the proceeds and potential gain. State estate or inheritance taxes might create additional considerations, depending on where the deceased person lived and other circumstances.

That potential tax bill is also an area in which parents and their children might have different expectations. The survey found that 34% of adult children expect to pay taxes on an inheritance, compared with just 20% of parents who expect their children to owe taxes. Understanding how inherited property is taxed can help heirs avoid surprises when they eventually decide what to do with the home.

Because rules vary based on the estate and how the property is eventually handled, consider talking with a tax professional before completing a buyout or sale.

What if you and the other heirs can't agree?

A house can be one of the most emotionally complicated assets to inherit. To one sibling, it's a valuable property that could provide money for a down payment, retirement or other financial goals. To another, it's the childhood home where the family spent decades making memories. Those feelings can make it difficult to reach a decision based solely on dollars and cents.

Those competing priorities can also create tension between siblings. According to Kiplinger's Trillion Dollar Talk survey, 33% of adult children with siblings think an inheritance is likely to cause conflict between them and their siblings.

Different expectations about what constitutes a fair inheritance can add to that tension. While 71% of parents with multiple children intend to divide their estate equally, only 47% of adult children expect their parents to divide their assets equally.

If you're trying to decide what to do with a home, start by getting an independent appraisal. Having a neutral estimate of the property's value gives everyone the same number to work from, whether you're considering a sale or a sibling buyout.

It can also help to separate sentimental value from financial value. Wanting to preserve a family home is understandable, but the person who wants to keep it still needs to consider whether they can afford the mortgage, taxes, insurance, upkeep and potentially buying out the other heirs.

If conversations stall, consider bringing in an estate attorney, mediator or financial professional who can help everyone evaluate the options without being as emotionally connected to the property.

Court action might be an option of last resort. Depending on state law, an owner might be able to pursue a partition action to end the co-ownership, which can lead to a court-ordered sale if the property can't reasonably be divided. But litigation can be expensive and potentially damage family relationships long after the house is gone.

Use the tool below to connect with a vetted financial professional:

Before you make a decision about an inherited home

There's no universal right answer for what to do with an inherited house. Selling could make sense for one family, while another may be perfectly comfortable keeping the property together for years.

Before making a decision:

1. Find out exactly who owns what percentage of the property.
2. Get an independent appraisal.
3. Determine whether there's a mortgage, lien or other debt attached to the home.
4. Calculate the ongoing cost of taxes, insurance, maintenance and other expenses.
5. Discuss what each heir wants to do with the property.
6. Put agreements about expenses and use of the home in writing.
7. Talk with an estate attorney and/or tax professional before completing a buyout or sale.

Ideally, some of these conversations can happen before there's a house to inherit. The Trillion Dollar Talk survey suggests that many adult children are looking for more clarity about their parents' plans: When asked what they would most like to know about their inheritance, 11% specifically wanted to know how it would be divided or who would get what.

A conversation today won't eliminate every decision that heirs will eventually have to make. But knowing whether a parent plans to leave a house to one child, several children or sell it through the estate can give everyone more time to understand what that inheritance could mean.

More Trillion Dollar Talk

• Before You Leave Your Home to Your Children, Ask These Questions
• Manage an Inheritance Like a Pro in Just 7 Steps
• How Your Inheritance Actually Gets Taxed: From Stepped-Up Basis to IRA Rules

When my mother turned 90, it was clear she needed to move to assisted living. Her home was truly beautiful; as a talented artist, she had covered the walls with her bright paintings, collected antiques, and thoughtfully refined every corner of the house over her 54 years there. But as my sibling and I got ready to sell, we realized the house was more Grey Gardens than Grey Poupon.

What saved the process for us? A fabulous real estate agent and a realization that we couldn't DIY the process.

Though we sold the house seven years ago, our agent still talks about the sale because it was, to put it mildly, strange. If you find yourself in a similar position — whether you're selling a parent's house or getting your own house ready for market — here are a few surprises I encountered and lessons I learned along the way, as part of Kiplinger's Trillion Dollar Talk campaign.

Lesson 1: Expect the unexpected (even snakes)

We never saw snakes in our suburban garden and never had them as pets, so it was a surprise when our agent, Cheryl Leahy of Compass Homes, found a 5-foot-long black snake emerging from the recesses of the living room couch.

"That's among the top three craziest things that have ever happened to me over 25 years of selling real estate; I was sitting on that couch every day [as we prepped the house]," Leahy recalled.

When you are emptying a house that has been lived in for half a century, you'll find things that shock you. Work with an agent who can roll with surprises.

Lesson 2: Firearms are a pretty common surprise

The closing was a rushed affair, so while we were in the lawyers' office signing documents, our agent, Leahy, was tying up loose ends at the house. Imagine my surprise when she called to say that she had found a gun at the back of a drawer.

I froze, my pen pausing over the document I was signing; then I burst out laughing. My parents had a play readers' group and used a prop gun for one of their noir productions.

Leahy was unperturbed. "I find a lot of guns, and they're usually tucked away somewhere that nobody even remembers. ... We find a lot of rifles in attics."

Lesson 3: Your agent's network is gold

The home had a dial-lock safe sunk into the basement's concrete floor. To close on a house sale, all fixed safes must be open and empty, but even with the combination, I couldn't open it. I called a locksmith, who peeked in with a flashlight and cried, "I see so much gold!" He claimed he needed more time and $350 more to get it out.

I wasn't falling for his scam, so our agent called her own locksmith, who opened it quickly for a fraction of the cost. Instead of gold, it contained silverware and documents and ... a can of Campbell's soup.

As Leahy notes, an effective agent must have a reliable network of trusted local contractors, including painters, haulers, cleaners, landscapers and estate sale experts ... and locksmiths.

Lesson 4: Know the market

A good agent will advise you against making major aesthetic renovations without consulting them first, preventing you from overspending on updates that won't increase the home's market value.

I interviewed several agents before the sale, most of whom recommended ripping out bushes in the front yard and putting in a lawn to attract families with children. I hired Leahy partly because she insisted it was unnecessary. Sure enough, our buyers said that they loved having no front lawn to maintain.

The same holds for any presale renovation. "It's really important to not put more money than you're going to get back out," Leahy urges. She also said buyers are looking for older homes that still have their original charm, which last-minute renovations could ruin.

Lesson 5: Hire a 'wedding planner' for the move

If there's one cardinal rule for getting a parent's house ready for sale, it is this: Don't do it alone.

Jami Shapiro, a senior move manager and member of the National Association of Senior Move Managers (NASMM), says that the biggest mistake well-meaning adult children make is trying to handle the transition on their own.

"The adult child should be the last person that goes through this process with a parent," she advises. "It's emotional for both people. A parent doesn't want to take on the role of parentified adult. ... They've been the parent; let them continue to be the parent."

Instead, Shapiro recommends hiring a senior move manager, whom she describes as a "wedding planner for a move." These professionals can stage the house and get it ready for the market. Furthermore, they often vet real estate agents, protecting families from aggressive realtors who might put the transaction ahead of the emotional transition.

Leahy echoes this sentiment, noting that elderly clients are often far more receptive to advice from a professional, neutral third party than they are to suggestions from their own children.

Ultimately, when you are dealing with the emotional weight of the family home, remember to give everyone a little grace. By outsourcing the heavy lifting to the right professionals, you can command a good price — and preserve your sanity.

More Trillion Dollar Talk

• Before You Leave Your Home to Your Children, Ask These Questions
• What Happens With Taxes When You Inherit a House
• How Real Families Are Handling The Great Wealth Transfer
• Could You Handle a Sudden Windfall?

The Great Wealth Transfer is underway in the United States. Between 2024 and 2048, an estimated $124 trillion in assets is expected to be transferred from baby boomers and the Silent Generation primarily to Generation X, millennials, Generation Z and charity.

This massive transfer of wealth will have major financial implications for families, many of whom have not discussed plans for either how much money will be passed down or what heirs will do with that money once they receive it.

According to a Morning Consult survey commissioned by Kiplinger, roughly two in five families have not discussed an inheritance strategy. Part of this, of course, is that money is considered a taboo subject. But also, the subject of inheritance requires people to acknowledge mortality.

Indeed, roughly a quarter of parents and children surveyed by Morning Consult for Kiplinger's Trillion Dollar Talk campaign said they are somewhat uncomfortable or very uncomfortable talking about money — and inheritance is one of the most difficult topics for them to discuss.

"I couldn't find it in my heart to ask," said one respondent when asked about talking through inheritance plans with their parents.

But talking about inheritance — whether you're giving one or receiving one — is of the utmost importance and allows families to manage expectations, prevent disagreements and create a financial plan.

"Be sure each child understands both the logic for your decisions and the responsibilities they will encounter upon your death," wrote Warren Buffett in November 2024 (PDF). "If any have questions or suggestions, listen carefully and adopt those found sensible. You don't want your children asking 'Why?' in respect to testamentary decisions when you are no longer able to respond."

This is just one lesson the famed investor imparts on inheritance. Below, we'll see what else Buffett and several other influential figures have to say about passing on wealth.

Warren Buffett

According to Cerulli Associates, roughly 15% of the $124 trillion expected to change hands during the Great Wealth Transfer will go to charity.

"The easiest deed in the world is to give away money that will never be of any real use to you or your family," wrote Warren Buffett in a 2021 letter to Berkshire Hathaway shareholders (PDF). "The giving is painless and may well lead to a better life for both you and your children."

In 2006, Buffett committed to distributing all of his Berkshire Hathaway shares to philanthropy. This equates to more than 99% of his net worth.

Buffett added that society has a use for his money; he doesn't.

The former CEO and current chairman of the holding company believes leaving his immense fortune to his three children does them a disservice. "Leave the children enough so that they can do anything but not enough that they can do nothing."

Instead, Buffett and his three children established charitable foundations to which he will distribute his Berkshire Hathaway shares.

Shaquille O'Neal

NBA legend Shaquille O'Neal is another influential figure who does not believe in automatically handing over his estimated $500 million in wealth to his six children. Instead, he's taking a carrot-and-stick approach.

"In order to get my cheese, you have to present me with two degrees," Shaq said in a 2022 interview. In other words, his children need to get bachelor's and master's degrees to inherit his wealth.

"I just keep them motivated," Shaq told 7NEWS Australia. "I'm teaching them about generational wealth right now. I tell them all the time, we don't need another NBA player in the house. If you want to play, I can help you get there, but I would rather see a doctor, dentist, a veterinarian, a world traveler, or a hedge fund guy."

Beyoncé and Jay-Z

Creating generational wealth is key for power couple Jay-Z and Beyoncé. The two have amassed a fortune of nearly $4 billion, thanks in part to their successful music careers, Beyoncé's Parkwood Entertainment production company and Jay-Z's Roc Nation management and entertainment agency.

The two don't typically talk about estate planning or inheritance, but a deep dive into their music provides clues to how they approach the topic. And it appears they plan to use their money to create lasting wealth for their family.

"Daddy, what's a will?"asks Blue Ivy Carter, the pair's firstborn child, in Jay-Z's 2017 song "Legacy."

"Take those moneys and spread 'cross families," Jay-Z answers, saying his sisters, nephews and cousins should get a piece of the pie too. "Generational wealth, that's the key," he goes on to say. "My mom took her money, she bought me bonds. That was the sweetest thing of all time, uh."

And Beyoncé made a reference to generational wealth in her and Jay-Z's 2018 collaborative song "BOSS," saying, "My great-great-grandchildren already rich."

Dave Ramsey

Roughly half of parents surveyed by Morning Consult said they expect to leave a meaningful inheritance to their children. Financial adviser and radio personality Dave Ramsey is here to remind them that they are not obligated to leave their kids any money.

"At the same time," says Ramsey, "I think it's wrong to assume that leaving them your money will damage them in some way. Wealth always magnifies the character of the person holding it."

But if parents are passing down their wealth, it's also their responsibility to teach good money management. "Too many families pass down dollars without ever passing down discipline," explains Ramsey. "And without wisdom, that money disappears in just a generation or two... So don't just leave your family wealth. Leave them the wisdom to build their own."

And for children who are inheriting wealth, Ramsey believes it is their job to "manage that money for the legacy of the person who left it to" them. "That's how you honor their gift."

Suze Orman

In the Morning Consult survey commissioned by Kiplinger, participants said that stocks, bonds, mutual funds and exchange-traded funds make up a small part (8%) of what they will leave their children. At the same time, 15% of heirs want to use their inheritance to grow their own wealth through investing.

But Suze Orman, financial guru and The New York Times best-selling author of The Ultimate Retirement Guide for 50+, says children should not hold onto investments they inherit for sentimental reasons.

In a 2019 podcast, Orman says that she's noticed "when you get an inheritance from somebody you love, specifically a parent, you tend to hold on to whatever it is that you inherited, thinking that your parents are that item or that investment that they left you."

But just because an asset was a good investment when your parent owned it doesn't mean it's a good asset now.

"You cannot keep your family alive by keeping the investments they left you," Orman explains. "You can honor them, however, and you can honor them and all of their hard work by paying attention to the money that they left you via these investments, and making wise decisions with them as to what those investments are doing right here and right now."

If you inherited something that has to do with money, says Orman, "please don't keep the memories alive by keeping a bad investment. Enhance the memories of what you were left by making more out of less money. By making it grow, making it grow in their memory. Making it grow in their past efforts. But not just keeping it."

More Trillion Dollar Talk

• Trillions of Dollars Will Be Passed Down in the Next 20 Years and Many Families Are Totally Unprepared: What to Know and What to Do
• The Most Tax-Efficient Ways to Leave Investments to Your Children
• Before You Leave Your Home to Your Children, Ask These Questions
• We Know You'd Rather Talk to Your Kids About Politics Than Inheritance. Here's the Right Way to Have That Conversation Anyway.

Dubbed The Great Junk Transfer, a recent study revealed a shift in how the next generation views an inheritance. While legacy once meant handing down every heirloom, modern families are pushing back: 51% of people now prefer to receive a few intentional items tied to personal stories, rather than a house full of possessions.

"The objects that once signaled status and care simply don’t carry the same language for the next generation," says Blaise Aguirre, assistant professor of Psychiatry at Harvard Medical School.

For generations, passing down a household of physical possessions was considered the ultimate act of love. You work hard, build a life and one day, your children inherit your mahogany dining set, your 120-piece fine China service and three display cases of commemorative state spoons.

The study from 1-800-GOT-JUNK? reveals that when a loved one passes away, what heirs truly want is connection, not a full-scale removal operation.

What we actually want (and what we really don't)

When people talk about inherited treasures, they rarely mean rusty 1980s workout equipment or the stack of dusty Encyclopedia Brittanicas in the attic. In the survey, people said they'd like to inherit fewer things (54%) and cited sentimental value as the reason they'd hold onto inherited items. Most respondents preferred to receive one to five items.

Items carry memories, but they aren't the memory itself. Giving loved ones permission to keep only a few meaningful treasures keeps the mourning process focused on healing — not clearing out a house. In the end, it's the personal connection that stays with us.

"Meaning is entirely in the eye of the beholder," Aguirre notes. What heirs cherish are items infused with personal story and presence:

• Handwritten recipes: Cards stained with vanilla extract and written in Mom's distinct cursive carry memories of licking the spoon and waiting impatiently for cookies to cool.
• A well-worn watch or ring: An everyday piece that instantly brings a loved one's presence back into focus.
• A photo album: An archive covering decades of family gatherings and milestones. Consider digitizing these albums to preserve the memories for future generations.
• A single favorite item: The coffee mug Dad drank from every morning, or the ring dish Mom kept on her nightstand.

4 ways to lighten the load (without the guilt)

Navigating an estate handoff doesn't have to mean hurt feelings or overloaded basements. By having early, open conversations about what holds value, families can protect both their cherished memories and their living space. When we focus on quality over quantity, passing things down becomes what it was always meant to be: A gesture of connection, not a burden.

Across international lines, on average, 48% of the Americans, Canadians and Australians surveyed would rather inherit nothing than cope with clearing out someone else's belongings. That said, 55% of the respondents said that they have helped clear a relative's home, with the task taking an average of 17 days.

On the other hand, 69% of people have discovered something they forgot existed while cleaning out a home. Some items held great sentimental value, such as a hard drive containing more than 12,000 family photos and passports from when their grandparents immigrated.

If you're currently looking around your home — or helping aging parents look around theirs — here is a kind, stress-free roadmap for navigating the handoff:

• Have the conversation early: Talk about items before life forces the issue. Ask your kids directly: "What's one or two things in this house you'd love to keep one day?" You might be surprised by what they select and equally relieved by what they don't care about.
• Aim for a "top 10": Encourage family members to select five to 10 items that carry personal meaning. Let the rest go without guilt.
• Separate sentimental value from everyday utility: That oak wardrobe might be solid wood, but if nobody has space for a 300-pound armoire, it's just furniture. Don't confuse emotional value with functional household goods.
• Give permission to let go: Remind your loved ones — and yourself — that an object is not the memory itself. Donating, gifting or hiring a removal team to clear out extra clutter frees up space for the things that truly matter.

Enjoy family and forget about the stuff

At the end of the day, a person's legacy isn't measured in cubic feet of cardboard. A single recipe box or a favorite worn sweater holds far more emotional weight than a house full of things nobody has room for. When we focus on the memories that truly matter, we give our families permission to hold on to the love — and let go of the rest.

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An inheritance can rapidly change your finances, but it often arrives alongside grief. Even if the money provides greater financial security, deciding what to do with it can feel more complicated than managing another type of windfall.

You don't need to make major financial decisions right away. Giving yourself time can help you understand what you've inherited, consider your priorities and decide what you want the money to do for you.

Where you ultimately put an inheritance will depend on your existing finances, when you might need the money and the type of assets you've inherited. The first step is making sure the money is protected while you figure out what comes next.

Start by putting the money somewhere safe

"Cash and savings" is the most popular asset that older parents say makes up their estate, a Morning Consult survey commissioned by Kiplinger found, above real estate, stocks and life insurance.

You can take your time to decide what to ultimately do with the money, but it's important to keep it safe in the meantime. If your inheritance arrives as cash, consider temporarily parking it somewhere liquid while you make a long-term plan.

Options include a high-yield savings account, a money market account or a short-term CD. These accounts can provide a safe place while you decide what to do next. Savings and money market accounts also keep funds easily accessible. With a short-term CD, you might pay an early withdrawal penalty if you take the money out before the term ends, so consider when you could need the funds.

If you've inherited a particularly large amount of money, pay attention to deposit insurance limits. Deposits are generally insured for up to $250,000 per client, per insured institution and per ownership category. If you've inherited more than $250,000, you might need to spread the money across multiple institutions or ownership categories to make sure the full amount is covered.

You might feel ready to put the money to work right away. Our survey with Morning Consult, part of Kiplinger's Trillion Dollar Talk campaign, found that 70% of adult children say they feel prepared to manage an inheritance, including 40% who say they're very confident. But being prepared doesn't mean you need to act immediately.

When you first receive an inheritance, your priority can simply be protecting the money while you decide what comes next. Once it's somewhere safe, you can take a closer look at what you've inherited, your financial priorities and any potential tax consequences.

Before investing, find out what you actually inherited

Tax rules surrounding inheritances can be confusing. The federal government generally doesn't tax beneficiaries for receiving inherited cash, though income generated by inherited assets might be taxable.

Federal estate tax, when it applies, is generally paid by the estate rather than the beneficiary. Some states, including Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania, also impose an inheritance tax, with what you owe often depending on your relationship to the person who died.

Inherited IRAs, brokerage accounts, real estate and other assets can each come with different tax rules. For example, withdrawals from an inherited traditional IRA might be subject to income tax and distribution requirements.

It's important to understand what you've inherited before making major decisions, so don't automatically cash out investments or retirement accounts before learning about potential tax consequences.

The confusion around inheritance taxes is reflected in Morning Consult and Kiplinger's survey, which found that 34% of adult children expect to owe taxes on an inheritance, compared with 20% of parents who expect their children to owe taxes. If you're unsure about the tax rules surrounding inheritances, consult an estate attorney or tax professional before making any moves that could have tax consequences.

Decide what the inheritance could do for your financial life

Instead of focusing on where you can earn the highest return, consider how the inheritance fits into your overall financial picture and what you want to accomplish. That can help you decide how to manage your inheritance.

Your priorities might include:

• Paying off high-interest debt
• Building or replenishing an emergency fund
• Catching up on retirement savings
• Saving for a near-term goal
• Investing for long-term growth
• Setting aside a small portion for something meaningful or enjoyable

An inheritance can potentially help you achieve any of these goals, but your priorities will shape what you do with it.

Match where you put the money to when you'll need it

Once you've decided what you want to accomplish, think about when you'll need the funds. Money you'll need soon generally belongs somewhere stable and accessible, while cash you won't need for many years might have more opportunity to grow through investing.

Here's how your options might change depending on your timeline:

• If you'll need the money within the next year or two: Prioritize safety and easy access over growth. A high-yield savings account or money market account can work well for money earmarked for a home purchase, major expense or other near-term goal. A short-term CD might also be an option if you're confident you won't need the money before it matures.
• If your goal is a few years away: You have more flexibility, but you might not want to expose all the money to market swings. Depending on your timeline and comfort with risk, you could keep some of the inheritance in savings or CDs while investing a portion for potential growth.
• If you're investing for the long term: Money you don't expect to need for many years might be better positioned for long-term growth. A diversified portfolio of stocks, bonds and other investments can offer greater growth potential, although you'll need to be comfortable with market fluctuations along the way.

Whatever approach you choose, consider how the inheritance fits into your broader financial plan. A significant windfall could give you opportunities to rethink goals that once seemed years away.

If you're unsure how to balance those priorities, a financial professional can help you determine how an inheritance fits into your short- and long-term goals.

Use the tool below to connect with a vetted financial professional who can help:

Consider whether this changes your bigger financial plan

An inheritance can reshape your financial plans in ways you might not have anticipated. It could allow you to retire earlier, pay off your mortgage, help your children or grandchildren, buy a home or give more to causes about which you care. Used thoughtfully, that final gift from a loved one can provide greater financial security and flexibility for years to come.

If the inheritance significantly changes your finances, consider talking with a financial planner and tax professional before making major decisions. They can help you understand how the money fits into your existing goals, identify potential tax considerations and develop a plan to use or invest it.

This might also be a good time to review your own estate plan and beneficiary designations. If your financial situation has changed, updating your plans can help ensure they still reflect your wishes and make things easier for your loved ones in the future.

More Trillion Dollar Talk

• Inherited IRA Rules Every Beneficiary Should Know
• 5 Questions to Ask a Financial Adviser About an Inherited Stock Portfolio
• The $124 Trillion Great Wealth Transfer: Fact vs Fiction Quiz

Creating a will is an important part of estate planning, but it doesn't necessarily determine who receives every asset you own. Retirement accounts, life insurance policies and certain other financial accounts typically pass directly to the beneficiaries named on those accounts, regardless of what your will says.

That can create problems if beneficiary forms are missing or haven't been reviewed in years. The person you named when you first opened a retirement account at work, for example, might no longer be the person you want to inherit today.

Beneficiary designations aren't always part of the estate-planning conversation. A new Morning Consult survey conducted on behalf of Kiplinger for our Trillion Dollar Talk campaign found that just 36% of parents surveyed had designated beneficiaries on retirement accounts or life insurance policies. Another 30% said they had none of the formal estate-planning arrangements included in the survey.

Fortunately, reviewing your beneficiaries is one of the more straightforward estate-planning tasks you can tackle. Here's where to look and when it might be time to make a change.

Know which accounts have beneficiaries

In the Trillion Dollar Talk survey, 17% of adult children said they expected life insurance to make up the greatest share of their inheritance. Retirement accounts were another source of expected inherited wealth.

Here are some accounts and financial products that allow or require you to name a beneficiary:

• 401(k)s and other workplace retirement plans. Money in these accounts generally passes to the beneficiary named on the plan.
• IRAs. Traditional and Roth IRAs also allow you to designate who will inherit the account.
• Life insurance policies. The insurer pays the death benefit to the beneficiary or beneficiaries listed on the policy.
• Annuities. Depending on the contract, an annuity might include a death benefit that passes to a designated beneficiary.
• Transfer-on-death (TOD) and payable-on-death (POD) accounts. These designations can allow assets in certain brokerage and bank accounts to pass directly to a named beneficiary without going through probate. Availability and rules vary by account, financial institution and state.

These accounts are different from assets that might be distributed through your will, trust or other estate-planning arrangements. A beneficiary designation is attached directly to the account, which is why keeping it current is so important.

Rules can also vary depending on the type of account. For example, with many employer-sponsored retirement plans, a spouse is generally required to be the primary beneficiary unless they waive that right. IRAs and life insurance policies typically provide more flexibility when choosing beneficiaries.

Check who is actually listed

Once you've made your list of accounts, check each one individually. Depending on the provider, you might be able to find your beneficiary information by logging in online. Otherwise, contact the plan administrator, insurance company, bank or brokerage firm.

Don't rely on your memory of filling out a beneficiary form years ago. Confirm what the financial institution has on file.

Look at both your primary beneficiary, who is first in line to receive the asset, and any contingent beneficiaries, who might receive it if the primary beneficiary dies before you, can't be located or declines the inheritance.

While you're there, make sure names and other identifying information are accurate and current. You should also look for accounts that don't have a beneficiary listed.

Pay extra attention to accounts you've moved between financial institutions. FINRA recommends double-checking beneficiary information after transferring an account to another firm to make sure the designation still reflects your wishes.

Life changes that should trigger a beneficiary review

Beneficiary designations shouldn't be something you fill out once and forget. Your relationships, finances and estate-planning goals can change significantly over the course of a decade or two.

Some of the biggest reasons to revisit your beneficiaries include:

• Getting married or divorced
• The death of a spouse or another beneficiary
• The birth or adoption of a child or grandchild
• Remarriage or the creation of a blended family
• Estrangement or another major change in a family relationship
• A beneficiary developing a disability or other circumstances that might require specialized planning
• A significant increase or decrease in your wealth
• Major changes to your broader estate plan

Even without a major life event, it's worth reviewing your beneficiary designations periodically. You might make the check part of an annual financial review, along with looking at your insurance coverage, investments and retirement contributions.

Don't assume your will fixes an outdated beneficiary

It's easy to assume that once you update your will, all your assets will follow those instructions. But that's not always how it works.

For accounts with a named beneficiary, such as a 401(k), IRA or life insurance policy, the beneficiary designation on the account generally takes priority over what your will says.

For example, say you named your spouse as the beneficiary of a retirement account years ago. You later divorce, remarry and update your will to leave your assets to your new spouse. But you never update that old retirement account. That outdated beneficiary designation could still create problems.

This is why it's worth reviewing beneficiary forms separately whenever you update your estate plan. If your situation involves divorce, remarriage or other complicated family circumstances, an estate-planning attorney can help everything line up.

Make sure your beneficiary choices fit your broader estate plan

Beneficiary forms might seem like standalone paperwork, but they should work with the rest of your estate plan.

Think about how your retirement accounts, life insurance, real estate and other assets will ultimately be divided. Looking at the full picture can help you spot imbalances, such as one child receiving a large retirement account while another receives significantly less through your will. Reviewing everything together can help ensure your beneficiary choices reflect how you want to provide for the people in your life.

Pay extra attention if you have minor children, a blended family, a trust or a beneficiary with special needs, since these situations might require additional planning. Don't forget contingent beneficiaries as well. Naming a backup helps clarify where an account should go if your primary beneficiary dies before you.

This type of planning also highlights the importance of talking about inheritance before it becomes an urgent issue. The Trillion Dollar Talk survey found that two in five families have never discussed inheritance, and 30% of parents surveyed had none of the formal estate-planning arrangements included in the survey. Even a basic conversation about your plans and where important documents are kept can make things easier for your family later.

Make a beneficiary check part of your financial routine

You don't have to overhaul your entire estate plan in one afternoon. Start with a simple task: Make a list of every retirement account, life insurance policy, annuity and other financial account that might have a beneficiary designation.

Then check the beneficiary listed on each one, including your contingent beneficiaries. Keep a record of any changes you make and when you made them.

Consider repeating the process once a year and after any major family or financial change. It can also be smart to review beneficiary designations whenever you update your will or other estate-planning documents so the different parts of your plan continue to work together.

If you have a more complicated estate, such as one involving trusts, a blended family, minor children or beneficiaries with special needs, consider coordinating your beneficiary review with an estate-planning attorney and your financial professional.

A beneficiary form might seem like a small piece of paperwork. But when it determines where some of your largest assets ultimately go, keeping it current can be just as important as creating the estate plan itself.

Use the tool below to connect with a financial professional who can help:

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An inherited stock portfolio can change your life, but it often arrives at precisely the moment you're least prepared to make major financial decisions.

"Receiving an inheritance is an emotionally charged event, usually a mix of grief, guilt, gratitude and even relief, which can create a bias toward action," says Ashley Weeks, a wealth strategist at TD Wealth. "The best thing any beneficiary can do at the outset is take a beat and gather the facts."

That doesn't mean doing nothing. Some decisions can wait, while others — such as understanding the tax consequences, account rules or required distributions that apply to your inheritance — might need more immediate action. This is where a financial adviser's guidance can be golden.

"A good adviser is also there to shed light on your blind spots and fill in your knowledge gaps, while keeping you from making emotionally charged decisions that affect your finances," says Kyle Labelle, an owner at Milestone Financial Planning.

When should you consult an adviser after receiving an inheritance? "Immediately," says Stephanie Temporiti, wealth adviser and executive director at Hightower Signature Wealth.

"You will want to understand the requirements for any money that needs to be distributed to you by law, as well as the tax implications for selling certain stocks or taking money out of an account," she says. "A financial planner will also identify other areas that may need attention after an inheritance, such as estate planning, insurance needs and tax planning."

Consulting an adviser immediately doesn't mean making every decision in that moment. These five questions can help you start the inheritance conversation and create a long-term plan for the portfolio you inherited.

1. What do I need to do now — and what can wait?

One of the hardest parts of receiving an inheritance is figuring out which decisions need your immediate attention. The good news is that not everything does.

"Making significant decisions around money is something to do when the grief wave has somewhat subsided," Temporiti says. "Sometimes it is OK to let emotions take the front seat with decision-making; money doesn't work that way."

She writes a "now, soon, later" list for her clients. "These are the things we need to accomplish immediately, in six to 12 months and beyond," she says. Having a clear action plan can help calm financial anxieties during a time when you're already dealing with plenty elsewhere in your life.

"The process of inheriting stock can feel like a paper chase initially," Weeks says. "Whether inheriting from an estate, trust, beneficiary designation, or a TOD [transfer of death] account, the recipient will need to provide documentation, and there may be a waiting period for creditor claims."

Your immediate priorities might include completing the necessary paperwork, determining exactly what type of account you inherited and identifying any required distributions or deadlines that apply.

An adviser can help you identify what needs to be addressed now and what bigger financial and investment decisions can safely be put on the back burner until the emotional heat subsides.

2. What taxes will I owe, and what is my cost basis?

Death and taxes may be the only certainties in life, but the tax treatment of inherited investments isn't always straightforward.

"If there is any uncertainty, the first question to ask is how an inherited portfolio will be taxed when positions are sold or distributions are taken," Weeks says.

One of the first things to figure out after inheriting a stock portfolio is what the IRS considers your starting point, also known as the property's cost basis. This basis will determine how much capital gains you'll owe if you sell.

If you've inherited investments directly, the cost basis is generally reset to the investment's fair market value on the date of the owner's death, although an alternative date can apply if the executor of the estate elects to use one.

But not every inherited account receives the same treatment. For example, inherited investments in a tax-advantaged account such as an IRA are subject to specific inherited retirement account tax and distribution rules. Many nonspouse beneficiaries of retirement accounts must also empty the account within 10 years.

The way the inherited property reaches you can matter, too. For example, property distributed through certain trusts might receive a different basis treatment than assets included in the deceased owner's estate.

"That difference can significantly change your tax bill when you eventually sell, which is exactly why it can make sense to slow down and understand which rule applies before you act," says Labelle.

3. Does this portfolio fit my goals, time horizon and risk tolerance?

Stocks, bonds, mutual funds and/or ETFs are part of 25% of older parents' estates, a Morning Consult survey commissioned by Kiplinger found. The portfolio you inherited was built for someone else. It might have worked beautifully for them, but that doesn't mean it's right for you.

"Once the necessary documentation is provided and the tax situation is clearly understood, the recipient of an inherited portfolio can evaluate whether the specific holdings fit their financial plan and make adjustments accordingly," Weeks says.

Your age, income needs, financial goals, investment timeline and risk appetite are all unique to you. This makes asset allocation inherently personal. An adviser can look at the inheritance alongside any investments you already own to determine the best way to combine them.

You can also ask the adviser what your target allocation should look like now, given your situation and goals, then compare that with the portfolio you now own.

4. Which stocks should I keep, sell or diversify — and how should I make those changes?

Even if you discover that your inherited portfolio isn't quite right for you, that doesn't mean you need to sell everything immediately. By the same token, you also don't need to keep anything simply because someone you loved chose it.

Instead, ask your adviser to evaluate each holding in the context of your entire portfolio. You might want to keep a close eye on risk level and concentration. If a large portion of your inherited portfolio is in a single company, industry or sector, a bad turn for those investments could have an outsize impact on your new finances.

One helpful way to frame the conversation can be to ask your adviser: If I had inherited cash instead of these stocks, what would you recommend I own today?

From there, you can discuss whether it makes sense to keep each investment, sell it or diversify gradually.

"Ultimately, this relationship gives you a decision-making partner who knows you, your situation and what you're hoping to accomplish," Labelle explains.

5. How does this inheritance change my overall financial plan?

Each investment you own is only one part of a larger equation. The bigger question is what the inheritance could allow you to do differently in the rest of your financial life.

"It's important to get an understanding of how an inheritance impacts your own financial picture," Temporiti says. "This allows you to be a good steward of the money you inherited and maximize its utility."

That could mean reducing or changing your work situation, paying down debt or increasing savings to pave the way for a brighter tomorrow. It might also give you the ability to help future generations or causes you care about.

"It's easy to lose sight of the fact that money is a tool — nothing more, nothing less — to achieve our highest aspirations," Temporiti says. "This is what the deceased person wanted for you: to see you do good with the money and live your life to the fullest."

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Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance, as a letter from the editor. We're sharing it here to shed light on our findings for our digital audience, as part of our Trillion Dollar Talk campaign. Subscribe to Kiplinger to help you make more money and keep more of the money you make here.

In our cover story this month, we've taken a deep dive into what the Great Wealth Transfer — the estimated $124 trillion of assets that will flow from older generations to heirs and charities through 2048 — means for families. While a good chunk of that transfer will come from a small slice of high-net-worth households, those who aren't among the super-rich are making plans to share their wealth over the coming couple of decades, too.

To gather insight into how families are handling this historic shift, Kiplinger commissioned an exclusive survey, conducted by research firm Morning Consult, of more than 5,000 older parents and adult children, asking for their knowledge and expectations surrounding the inheritance that parents will leave for their heirs.

Drawing from the survey's findings, the story you can find here offers advice on how families can successfully navigate this transition, from determining what information you may want to disclose to your children about their inheritance ahead of time to ensuring that you pass along your values, too. In another story, we outline some key takeaways from the survey.

And in a third story, we provide guidelines on having conversations with your adult children that will leave them well positioned to manage their inheritance and minimize conflicts and confusion among your heirs when the assets change hands.

How real families are handling this transition

As a complement to the stories in our cover package, we asked readers to send us their responses to this question: Are you giving away some of your money or assets to your heirs while you're still living, or do you intend to leave a larger inheritance later? I'm sharing a few responses here.

Many readers said they are offering some financial help while they're still around to see their children enjoy it, and at a stage during which their kids may most need the assistance. Says one reader, "My in-laws gave us money at a time in our lives when we were raising three children, and it was very helpful to our family. We feel that our retirement is secure and have started giving some money each year to our children while they are young adults, as they raise children and buy homes. I feel that it can benefit them more at this stage of their lives than later."

Another reader emphasized the importance of conveying financial lessons along with giving gifts. "Our philosophy for giving to children is to make their lives better, not remove the incentive for hard work and development of good spending habits," he says. He and his wife provided about 35% of the down payment for their son's home purchase, and they explained to him how paying extra on his mortgage can reduce total interest on the loan and shorten the time it takes to pay it off.

Several of you mentioned that you're helping your grandchildren, too, funding their retirement accounts and college-savings plans. One reader is contributing $5,000 yearly to each of his five grandchildren's 529 plans, with a goal of contributing $100,000 total per beneficiary.

"Because I was willing to start early, my family can benefit from the tax-free growth of these funds," he says. And, he notes, if any of the grandchildren don't use all the savings on education expenses, they can roll over as much as $35,000 from the 529 to a Roth IRA tax- and penalty-free, "giving that generation a head start on retirement savings."

A reader whose two oldest grandchildren are in college is boosting their retirement savings — and encouraging them to start thinking about investing—by contributing to their Roth IRAs. And, he says, "Once they begin their careers, we will offer to match their retirement-fund contribution."

More Trillion Dollar Talk

• The Great Wealth Transfer is Creating a New Generation of Family CFOs
• The $124 Trillion Great Wealth Transfer: Fact vs Fiction Quiz
• Could You Handle a Sudden Windfall?

When money or property changes hands after a loved one passes, the tax rules surrounding inheritance taxes and estate taxes can feel daunting.

Additionally, many people may have heard claims about owing IRS tax bills after an inheritance or intimidating phrases like "death taxes," which can blur the lines between myth and reality. In fact, a new survey conducted by Morning Consult for Kiplinger's Trillion Dollar Talk campaign found that a third of both older adults and adult children are unsure whether heirs will owe taxes on an inheritance, demonstrating the confusion around this topic.

As with all tax rules, knowing the facts is important. So why not test your knowledge with this short quiz to see if you can separate inheritance tax facts from fiction.

More Trillion Dollar Talk

• We Asked 5,000 Americans About Inheritance and the Great Wealth Transfer. Here's What We Learned
• Estate Tax v. Inheritance Tax: Who Actually Pays?
• States That Won't Tax Your Death
• What Happens With Taxes When You Inherit a House?

You might envision aging in place and remaining independent throughout retirement. But as you plan for the years ahead, it's also important to consider the possibility that you might eventually need some form of long-term care.

According to the U.S. Department of Health and Human Services, approximately 70% of people turning age 65 can expect to need some form of long-term care during their lives. Long-term care costs can add up quickly, potentially affecting both your retirement savings and the assets you hope to leave behind.

A Morning Consult survey commissioned by Kiplinger as part of our Trillion Dollar Talk campaign found that 47% of parents expect to leave a meaningful inheritance. But even a carefully planned inheritance can be affected by expenses later in life, particularly the cost of long-term care. If leaving money or other assets to your children is important to you, planning for those potential costs now can help protect your own financial security while preserving more flexibility for what you ultimately leave behind.

How long-term care costs can affect an inheritance

Long-term care can be expensive, and what you pay will depend on the type of care you need and where you live. According to the CareScout 2025 Cost of Care Survey (PDF), national median costs for several common types of care include:

• In-home care. $80,080 per year, assuming 44 hours of care per week
• Assisted living community care. $6,200 per month, or $74,400 annually
• Nursing home care in a semi-private room. $315 per day, or $114,975 annually
• Nursing home care in a private room. $355 per day, or $129,575 annually

Paying for several years of long-term care could significantly reduce your savings and other assets, leaving less to pass on to your heirs. It's a concern shared by many parents. The Trillion Dollar Talk survey found that 24% of parents surveyed worry long-term care or healthcare costs could deplete their estates.

While you might want to preserve an inheritance for your children, your own retirement and care needs should come first. Planning ahead can help you prepare for those costs while protecting your broader financial goals.

Build long-term care into your financial plan

Because you might need long-term care at some point, it;s important to plan for how you'd cover the cost before you actually need care.

Savings and retirement income may be part of that plan. If you're eligible for a health savings account (HSA), it can provide a tax-advantaged way to set aside money for future healthcare expenses.

HSA balances roll over from year to year, allowing you to build funds that can be used tax-free for qualified medical expenses. You can also use HSA funds to pay qualified long-term care insurance premiums, subject to annual IRS limits based on your age.

Long-term care insurance is another option to consider. Medicare and traditional health insurance generally do not cover ongoing custodial care, such as help with everyday activities like bathing, dressing or eating. Depending on the policy, long-term care insurance can help cover services provided at home, in an assisted living facility or in a nursing home.

Coverage varies by policy, so it's important to understand what you're buying. Policies typically have an elimination period before benefits begin and limits on how much they'll pay per day or month and over your lifetime. Premiums, benefit amounts and covered services can also vary considerably.

No single strategy will be right for everyone. Your approach might include a combination of savings, retirement income, insurance and other assets. As your finances and circumstances change, revisit your plan to make sure you have adequate resources to cover potential care costs.

A financial adviser can also help you evaluate your options and how they fit into your broader retirement and estate plans.

Use the tool below to connect with a vetted financial professional:

Make sure your estate plan reflects your priorities

An estate plan can include a will, trust, power of attorney and other documents that outline how you want your finances, property and other affairs handled during your lifetime and after your death. Yet the Trillion Dollar Talk survey found that nearly three in 10 parents have no formal estate plan, while 41% have a will.

If you already have an estate plan, review your will, trust, beneficiary designations and other documents periodically to make sure they still reflect your wishes. As part of that review, consider how potential long-term care expenses could affect the assets you expect to leave your heirs.

When you develop or review your estate plan, keep in mind that the value of your assets today might not reflect what is ultimately passed down to your heirs. Retirement spending and long-term care costs can reduce your assets over time, potentially leaving a smaller inheritance than you originally planned.

Talk to your children about what to expect

Talking to your children about your estate plan can be difficult, and many families put off the conversation. The Trillion Dollar Talk survey found that roughly two in five families have never discussed plans for passing down money and assets. Among parents who haven't discussed their plans in detail, 34% say there are too many unknowns, including how long they'll live and how much they'll ultimately have to leave.

You don't need to provide an exact inheritance amount. Instead, the conversation can focus on the plans you have in place and how your assets might be used during your lifetime, including how to pay for long-term care.

This is also a good time to discuss whether you expect your children to play a role in your care or help manage your finances. Make sure they know where to find important information, including details about your financial accounts, life and long-term care insurance policies, will and other estate planning documents.

Having these conversations before a health crisis gives your children time to ask questions, understand your wishes and prepare for any responsibilities they might take on. It can also help avoid confusion or difficult decisions during an already stressful time.

Ultimately, the inheritance you expect to leave could change as your care needs and expenses evolve. Planning for those costs now can help you protect your own financial security while giving your family a clearer idea of what to expect.

More Trillion Dollar Talk

• Trillions of Dollars Will Be Passed Down in the Next 20 Years and Many Families Are Totally Unprepared: What to Know and What to Do
• The Great Wealth Transfer is Creating a New Generation of Family CFOs
• Long-Term Care Insurance: 10 Things You Should Know
• These Are the 2 Legal Documents Everyone Should Have, Courtesy of an Estate Planning Attorney

For many families, the Great Wealth Transfer starts long before an inheritance. Many adult children are becoming their aging parents' go-to financial decision-makers.

The shift from adult child to the family's Chief Financial Officer (CFO) can happen suddenly after discovering unpaid bills, a suspicious bank wire request or an aging parent falling prey to a scammer. Or the job can be created out of necessity after the realization that mom and dad's financial life has grown too complex to manage on their own, says Tyler Rosser, managing director at Oxford Financial Group.

Longer life expectancies, coupled with the staggering $124 trillion in wealth set to change hands through 2048, according to Cerulli Associates, are making the family CFO an increasingly common job description. "It's becoming much more prevalent," says Rosser.

Serving as the de facto family CFO means taking on a broad range of money-related responsibilities, such as overseeing estate planning and long-term care. It's time-consuming, and depending on your parents' situation, difficult, so make sure you take care of yourself throughout your "term" as CFO.

Here are six steps to acting as a family CFO.

1: Start with a conversation

The best plan of action is to sit down with your aging parents while they are still capable of making financial decisions — and before a crisis strikes, such as the onset of dementia — and explain why you'd like to play a larger role in managing their finances and be privy to their estate planning.

"It starts with a conversation with the older parents and getting their buy-in," says Rosser.

"Millions of families [are] going through generational transitions," says Timothy Habbershon, managing director and founder of the Fidelity Center for Family Engagement.

Unfortunately, many families haven't had these important sit-downs. A Morning Consult survey, commissioned by Kiplinger as part of our Trillion Dollar Talk campaign, found that roughly two in five families have never discussed the plans for passing on money and assets.

"As people get older — especially past 70 — they often become less willing to talk about things like estate planning," Habbershon said. It's a unique opportunity, he says, to "create confidence, closeness and peace of mind for years to come."

2. Collect relevant financial information with an 'audit'

To perform CFO duties properly, the adult child in charge must have access to all pertinent financial information for both parents, including the following items.

• Account access. Savings, investment, and retirement account numbers and passwords, as well as combinations or keys to safes and safety-deposit boxes.
• Cash flow. Monthly bill statements and recurring expenses.
• Legal documents. Real estate records, wills and trusts.
• Insurance. Life, health and long-term care policies.

"When your parents are aging, the most important thing adult children (acting as CFO) need to do is gather key financial information," says Noah Doyle, CEO of SoundRidge Private Wealth.

Gathering these documents gives the family CFO a fuller picture of their parents' finances. By laying everything out on the table while the parents are still alive and mentally competent, the family CFO also has a better chance at preventing in-fighting between adult siblings who have a stake in their aging parents' estate, adds Doyle.

Ideally, the family CFO will have full transparency into his or her parents' financial life. At a minimum, the CFO should get the parents to grant access to their account statements, preferably via a "duplicate statement" arrangement or "view-only access."

"It gives the family CFO insight into transactions that are coming in and out of a checking account or what withdrawals are coming out of an investment account," says Rosser. "They can log into a Fidelity or Schwab account, for example, and see account data in real time."

A parent can also authorize his financial institution or financial adviser to add the adult child and family CFO as a "trusted contact," which allows the adviser to contact the family CFO if he suspects financial exploitation, fraud, cognitive decline or can't reach the client. They can do the same for their Social Security accounts.

"The last thing you want is your parent to be susceptible to some sort of elder fraud," says Doyle. "Anytime a wire goes out or a transaction looks suspicious or fishy, you know it's time to step in."

A key piece of information that must be clarified, adds Doyle, is whether aging parents have a long-term care policy in place. Often, elderly parents have a policy but don't share that key information with their adult children.

If a long-term care policy does exist, it's important to evaluate it closely.

"You need to know what the policy number is and understand what the benefits are because if there's ever a time when your parents have to use this policy, it's the children who are going to actually file the claim and know what the care options are," says Doyle.

If there's no long-term care policy in place, the CFO must analyze the parents' assets to determine whether they have enough to cover long-term care, and if so, the most tax-efficient ways to raise the cash to pay for care, says Doyle.

3. Secure power of attorney

In many cases, it's prudent for the family CFO to have the aging parent or parents grant them power of attorney (POA), a legal authorization that lets the child manage the parents' financial affairs.

"A power of attorney can encompass everything from paying their mortgage to making sure they have enough liquid resources to satisfy their day-to-day living expenses," says Rosser.

Peggy Sizow, chief fiduciary officer at National Advisors Trust, says a power of attorney can be customized however a family wants. If the family CFO is most suited for financial matters, a financial power of attorney can be set up; if another family member is more comfortable with healthcare issues, a healthcare power of attorney can be set up in their name, says Sizow.

The financial power of attorney can enable the family CFO to take control of all a parent’s finances, or it can specify certain types of financial accounts, such as bank, brokerage or retirement accounts. "They can be as customizable as you like," says Sizow.

Having full visibility into a parent's financial accounts is also a way to protect them from cybercriminals and other fraudsters and scammers, and in some cases, protecting them from themselves, says Rosser.

"It protects them from bad actors," says Rosser. An elderly person may also inadvertently cause financial harm to themselves by continuing to give to charities they have supported their entire life but can no longer afford. A review of checking accounts by the CFO can spot those types of self-inflicted wounds.

"The family CFO can step in and say, 'Mom, you've done such a good job gifting to charity in your life, but you really need to preserve most of those assets for the rest of your life,' " says Rosser.

4. Build a team of trusted advisers

The family CFO likely won't be an expert in money management, estate planning or tax planning. It's prudent for the adult child managing a parent's finances to connect with and build a relationship with experts when needed, adds Rosser.

"Bringing in a broader advisory group is a really good strategy," says Rosser. "Lean on the professionals around you."

Aging parents might be more willing to listen to a suggestion by the family CFO if it's backed up by the parents' long-time financial adviser or CPA.

"Everyone is sort of singing the same tune," says Rosser. "You get more buy-in that way."

An effective family CFO gathers key financial information from trusted experts and makes a sound financial decision.

"The family CFO's job is to get the information and options from the parents' long-term accountant, long-term estate attorney, long-term financial adviser," says Doyle. "Once they've gotten all the information from the professionals, then they make the best decision that’s best for their family."

5. Create or manage the estate plan

Finalize and verify your parents' estate plan well before Mom or Dad gets sick or incapacitated, says Sizow. "There are quite a few things that could take place prior to an inheritance," says Sizow.

Creating a trust and titling assets as "payable on death," for example, can help assets pass more easily to heirs and avoid costly, time-intensive probate court, Sizow advises.

It's important that you know the key components of the estate plan, including the names and contact information of the professionals your parents worked with on it, as well as how to access estate documents. Kiplinger's Trillion Dollar Talk survey found that a third of adult children whose parents have estate documents don't know how to access those documents.

6. Act when necessary

Hopefully you will not need to step in on your parents' behalf for years to come. Still, it makes sense to monitor their accounts and keep an eye on their health, especially if they show signs of physical or mental decline.

More Trillion Dollar Talk

• How to Talk to Your Family About Estate Planning (Without the Drama)
• Being the Executor of an Estate Is a Thankless Job: Here's How to Do It Well Anyway
• How to Organize Your Financial Paperwork for Your Heirs
• 5 Critical Questions to Ask a Financial Adviser About an Inherited Stock Portfolio

A home is one of the most valuable assets many parents will eventually leave behind. It might also carry decades of memories, making it a particularly personal inheritance. But passing down a house isn't always as simple as handing over the keys.

Even a mortgage-free home comes with ongoing expenses, from property taxes and insurance to maintenance and repairs. When multiple children inherit a property, questions about whether to keep, sell or live in the home can make matters even more complicated.

You're not alone in facing these decisions. As the Great Wealth Transfer unfolds, baby boomers are expected to pass trillions of dollars in wealth to younger generations, and homes will be a significant part of that inheritance.

A record 340,000 U.S. homes were passed down through inheritance from August 2024 to August 2025, according to Cotality. If your home is likely to be part of that transfer, it's worth deciding what you want that inheritance to look like before your children are the ones left to figure it out.

Have you asked your children what they want?

The first conversation your children have about what to do with the family home shouldn't happen after you're gone. Talking about your plans now gives everyone an opportunity to be candid about what they would realistically want to do with the property and gives you time to adjust your estate plan if their expectations differ from yours.

I can tell you to have this conversation, but sitting down and having it is another matter. Our research suggests many families feel the same. In a new survey conducted by Morning Consult on behalf of Kiplinger for our Trillion Dollar Talk campaign, both parents and adult children ranked inheritance among the most uncomfortable family topics to discuss, second to sex and dating.

Yet when forced to choose between the two uncomfortable conversations, 71% of adult children said they'd rather talk with their parents about what they'll inherit than discuss sex and dating. Parents felt similarly: 79% said they'd rather discuss what their children will inherit.

While inheritance might not be an easy conversation, your children could be more willing to have it than you think. You don't need to settle your entire estate plan in one sitting.

Start with practical questions about the house. Would anyone live there? Would they prefer to sell it? If more than one child is involved, do they have different ideas about what should happen? These conversations might also uncover financial concerns you hadn't considered, such as whether someone could afford the ongoing costs of keeping the home.

Don't assume one conversation settles the matter permanently. A move, marriage, divorce, major renovation or change in finances can alter what's practical for you or your children. Revisit the plan periodically so that what you've put on paper continues to reflect what you and your family want. Once you've opened the conversation, these are the questions worth working through together.

1. Do your children want the house?

You might love your home and everything it represents, but that doesn't necessarily mean your children will want to keep it. Before making the house a central part of your estate plan, ask your children what they would realistically want to do with it.

Consider where they live and what their lives might look like when they inherit the property. A child who owns a home across the country might have little interest in moving back, while another might not want the financial responsibility of maintaining a second property.

Even if they don't plan to live there, they could face decisions about whether to rent it, maintain it as a vacation home or sell it. The longer those decisions drag on, the more likely the property is to become a financial burden or fall into disrepair.

In my years as a real estate agent, I worked with families who struggled to decide what to do with a home after someone passed away. The property held so many memories that selling it felt painful, but no one wanted to live there. Meanwhile, the bills kept coming, and the house continued to deteriorate.

The truth about what makes sense for a family home can hurt, but indecision has a cost, too. Wait too long, and you might find that time, money or the condition of the property has made the decision for you.

Sentimental attachment can also vary from one family member to another. You might see the house as an important part of your family's history, while your children might prefer to inherit assets that are easier to manage or divide. Having that conversation now gives everyone a chance to share their expectations and can help you avoid making plans based on assumptions.

2. Can they afford to keep it?

Even if your children want the house, the next question is whether they can realistically afford to keep it. A mortgage-free home isn't a free home. Property taxes, homeowners insurance, utilities, HOA fees, routine maintenance and major repairs can add up to thousands of dollars each year.

This is something I've thought about with my own home. It's the "big house" where our family gathers, and that makes it important to me. But my children aren't established yet, and the things that make the house great for a large family gathering could make it too much for one person or a small family to maintain. Leaving someone a valuable asset doesn't necessarily mean you're leaving them something they can comfortably afford.

That matters even more when the home represents a large share of what you're leaving behind. Kiplinger's Trillion Dollar Talk survey found that 33% of parents said real estate, including their home, would make up the greatest share of their children's inheritance.

For children who aren't yet financially established, an inheritance could have a big impact on their personal finances. The value tied up in a home could help them buy a home of their own, pay down debt, invest or build long-term financial security. But realizing that value requires a plan. Without one, heirs could instead find themselves responsible for a valuable property they can't afford to maintain or can't agree on what to do with it.

If you still have a mortgage, that adds another consideration. Your children could inherit the home, but the debt doesn't simply disappear. Talk through what keeping the house would cost, whether anyone could comfortably take on those expenses and what would happen if they couldn't. In some cases, selling a beloved family home might ultimately make more financial sense than struggling to keep it.

3. What happens if one child wants the home and another wants the money?

Leaving a home to multiple children can turn what seems like a straightforward inheritance into a complicated financial decision. One child might want to keep the family home, while another would rather sell and receive their share of the proceeds.

If one heir wants the property, consider whether they could realistically afford to buy out their siblings without putting themselves under financial strain.

For many parents, dividing an estate equally is the goal. Kiplinger and Morning Consult's Trillion Dollar Talk survey found that 71% of parents with more than one child intend to divide their assets equally among them. But an equal inheritance doesn't necessarily require dividing every asset into equal pieces. Parents can look at their other assets when deciding how to accomplish that.

For example, one child might inherit the home while another receives a larger share of savings, investments or life insurance proceeds. What's equal on paper might not always be what's most practical for your children, so think about both the value you're leaving each child and what inheriting each asset would mean for them.

For my family, I've decided I don't want my children to have to wrestle with what to do with our home or risk having the house become a source of disagreement. Our plan is for the home to be sold and the proceeds divided among them. The house has been where our family built memories together, but I'd rather its value help my children build dreams of their own.

Do your children understand the potential tax consequences?

Inheriting a home can come with tax implications, particularly if your children eventually sell it. Under current federal tax law, inherited property generally receives a "step-up" in cost basis to its fair market value as of the owner's date of death.

That can significantly reduce the capital gains taxes an heir might otherwise owe compared with receiving the home as a gift during the parent's lifetime.

For example, if you bought your home for $150,000 and it's worth $500,000 when your children inherit it, their cost basis would generally be stepped up to $500,000. If they soon sold it for about that amount, there might be little or no taxable capital gain. If they kept the house and later sold it for $600,000, however, the increase in value after they inherited it could potentially be taxable.

Federal taxes aren't the only consideration, and the rules can vary depending on how the property is transferred, when it's sold and where you live. Before deciding how to pass down a home, consider talking with an estate-planning attorney or tax professional who can explain how your plan could affect both your estate and your heirs.

Whatever you decide, make sure your estate documents can carry out those wishes. An estate-planning attorney can help you determine the best way to transfer the property or direct its sale under the laws in your state.

Make sure the house fits their future

As I get older, I'm starting to see my children in a different light. They're building lives and growing in directions I couldn't have predicted when they were younger. I want the inheritance I leave them to support that growth, not limit the choices they have about what comes next.

For my family, that means planning for our home to eventually be sold and the proceeds divided. But what's right for my family might not be right for yours. Keeping a beloved home in the family could be exactly what your children want, and it could become a place where another generation builds memories of its own.

The important thing is not to assume. Talk with your children about what the home means to them, what they would realistically want to do with it and whether they could afford the responsibilities that come with keeping it. Then make sure your estate plan reflects those conversations.

A family home can be an incredible legacy. Just make sure the legacy you're planning is one your children want.

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As the saying goes, there are only two certainties in life: Death and taxes. But when it comes to estate planning, many Americans are reluctant to spend time thinking about either.

According to a new survey conducted by Morning Consult on behalf of Kiplinger, only about 56% of parents admitted to having a conversation with their children about inheritance. That number drops to just 39% when you ask adult children whether they've had a discussion about family plans for passing on money and assets.

The lack of engagement and understanding is also stark when it comes to estate taxes, according to the survey. Roughly 40% of both children and parents say they're "not sure" whether taxes will apply to any inheritance plans.

Considering the U.S. is already in the beginning stages of the Great Wealth Transfer, in which members of the massive baby boomer demographic reach the end of their lives, this kind of procrastination with estate planning comes with a real cost. By some estimates, the collective fortune to be passed to younger generations tops well over $100 trillion in value.

Naturally, you want to ensure that your financial legacy stays in the hands of your loved ones, and doesn't get consumed by the Internal Revenue Service. Perhaps you're making arrangements for your own estate. Maybe you're overdue for such a plan and don't know where to start.

Whatever the case might be, take a few minutes for an introduction to the most tax-efficient ways to leave investments to your children.

1. Hold appreciated investments until death

A lot of research shows that the best strategy for investing is to buy and hold stocks for very long periods rather than actively trading in and out of fads. When it comes to tax planning, one of the best strategies for the stocks that have appreciated over the long-term is to hold them until the day you die.

According to IRS rules, heirs are frequently eligible for a "step-up" in cost basis to the asset's fair market value at the date of death. That has the potential to entirely eliminate capital gains taxes on a stock's appreciation over the original owner's lifetime.

Considering long-term capital gains can be 15% or more of the profits on a stock sale, this strategy of handing down the stock itself can result in significant cost savings.

If you've invested wisely and have big winners, one of the most tax-efficient ways to leave investments to your children is to not liquidate shares or to pass on the stock as a gift while you're still alive. Just let your heirs inherit the stock and do the selling directly.

2. Make your 401(k) and IRA beneficiaries your heirs

For many families, one of the biggest legacies they'll leave is the retirement funds in a tax-deferred retirement account such as a 401(k). As the term implies, the taxes on this money were deferred when originally invested. When withdrawals are made, the IRS is due its share.

The challenge is that withdrawals from such an account are taxed as "ordinary income," so a big one-time windfall results in a big tax bill. For example, current tax brackets include a 24% tax rate on anything above $105,701 — and a hefty 32% rate on anything above $201,776.

Because this ordinary income category includes an employer's paycheck, an heir who makes a decent living might find themselves in a steep tax bracket even if the distribution from your estate is relatively modest.

This is where adding heirs directly to your account can help. The IRS generally allows 10 years for nonspouse beneficiaries to liquidate an account such as a 401(k). As such, they can withdraw the money in smaller chunks on their own terms to maximize tax savings.

While there's no way to avoid taxes entirely on an inherited 401(k) or traditional IRA, this longer runway allows heirs to avoid a big one-time tax hit from a single distribution.

3. Regular gifts under the tax threshold

If you want the warm feeling of delivering some cash into your child's hands so you can watch them enjoy it, there are also ways to pass on assets now without running afoul of the tax man. Parents can gradually transfer investments during their lifetimes using the federal annual gift tax exclusion.

The maximum annual tax-free gift as of 2026 IRS rules is $19,000. That's a nice chunk of change by itself, but you can also continue to provide that gift annually – and to as many different individuals as you see fit — to transfer significant wealth over time.

What's more, making annual gifts in this manner might reduce the size of a taxable estate after death.

As long as you don't cross the threshold in a given year, your heirs won't have to claim the cash on their tax returns. They also can put that money to immediate use to take a trip, put a down payment on a house or anything else — while you have the benefit of seeing them put your gift in action.

4. Irrevocable trusts

It's worth noting that most families won't face significant tax burdens by deploying the strategies above. However, if your estate is particularly large, a comprehensive irrevocable trust might be in order.

Irrevocable trusts are commonly used by higher-net-worth families to remove future appreciation from a taxable estate by permanently giving ownership of assets to a trust. That trust then manages those assets for the benefit of other people and can deliver the cash according to the grantor's instructions.

This is the big artillery when it comes to the most tax-efficient ways to leave investments to your children.

Trusts have numerous benefits, including protecting assets from creditors or lawsuits as well as taxes and allowing you a measure of control on how your heirs spend their inheritance long after you've passed away.

However, the word "irrevocable" is not to be taken lightly. Many estate planners call such a trust a one-way street because you can't change your mind to get the money back or about your directions.

That said, these trusts can sometimes span multiple generations and efficiently protect a hard-earned fortune from eroding, thanks to mismanagement or heavy taxes.

5. Financial planning is personal, so talk about it

The Morning Consult survey conducted for Kiplinger found that almost a third of all U.S. parents say they have no formal estate plan — including failing to document arrangements in a will. There are many reasons for this including the fact that some families don't have significant assets to pass on.

But it's also simply a matter of avoiding the topic.

Estate planning begins by taking stock of what you want to leave behind when you're gone. These financial goals will naturally be personal, based on your specific portfolio, as well as your family situation and your final wishes.

You have a sense of your situation; consider talking with a good estate planning attorney or tax adviser next. These professionals can be well worth their fees by providing tailor-made solutions in which various investing and tax strategies can be used in complementary ways.

Most important: Share your plans clearly with your heirs before it's too late.

Nobody likes to dwell on death or taxes, but they're realities for all of us. If you're confused about how to arrange your estate, the simplest way to begin is by talking about it.

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Do you plan to leave your children a meaningful inheritance? Do you worry about how inflation and long-term-care costs might affect how much you have to give? Have you talked to your kids about your plans? Or, if you're the adult child in this equation, have you broached the subject of inheritance with your mom and dad?

On the eve of what's expected to be a historic generational transfer of wealth in the U.S., Kiplinger set out to explore how families are navigating inheritance planning in their households — what they intend, what they hope for, what they worry about and how they've communicated with each other. Toward that end, we partnered with research firm Morning Consult to field a national survey asking 5,156 Americans — half adult children ages 25 to 60, half parents ages 55 and up — to share their views and circumstances.

Here is a look at what we learned.

Parents and adult children are not on the same page

When it comes to inheritance plans, the survey reveals a big gap in expectations and knowledge between the older and younger generations in many families.

For starters, adult children are far less likely to think they'll be getting an inheritance at all, compared with parents who expect to leave one. Some 42% of younger respondents say they don't expect to receive a meaningful amount, but just 15% of parents say they won't have any money to pass down. On the flip side, about twice as many parents, in fact, do plan on leaving a meaningful inheritance as adult children who anticipate they'll get one.

The kids generally aren't clear what assets will be involved, either. Nearly two-thirds of parents say they have money in cash and savings, but fewer than four in 10 children think those assets are part of the older generation's estate. Adult children are also far less likely to say that life insurance, real estate, an IRA or a 401(k), and other investments are part of their parent's holdings, compared with parents who say they own these assets.

There are also big generational gaps concerning how much financial help parents extend to their children now (parents consistently say they are helping more than children believe); whether it's better to split inheritances evenly among siblings or consider other factors such as financial need or past assistance (more kids favor "fair" over equal than parents, by a 21 percentage point margin); and whether they've discussed an inheritance plan (more parents report having shared information than children recall hearing).

"Both parents and adult children need to do a better job of understanding where the other side is coming from," says Kurt Supe, a certified public accountant and retirement planner at Creative Financial Group in Indianapolis and CFD Investments. "The key is better communication."

There's a gender gap when it comes to inheritances, too.

Sons are more confident about their ability to manage an inheritance than daughters, the survey results show. That's in keeping with other research showing men's greater belief in their financial acumen (although the studies don't necessarily indicate that faith is justified).

Sons are also more likely than daughters to expect an inheritance (30% versus 18%), to say their parents have shared plans for passing down assets, and to know how to locate Mom and Dad's will and other estate-planning documents. Daughters, by contrast, answered "not sure/don't know" to questions more frequently than sons — about how much they'll inherit, whether they'll owe taxes on the bequest, and even whether they prefer financial help from their parents now or a larger inheritance later.

When it comes to talking to the kids about inheritance plans, moms rule. Although both mothers and fathers express the same comfort level in talking to their children about money, dads in practice are more likely to have said nothing to their kids about their inheritance plans (45% of dads have stayed tight-lipped, compared with just 33% of moms).

Financial adviser Stephanie McCullough, founder of Sofia Financial, a financial planning firm for women in Berwyn, Pa., suggests that women who aren't confident about managing their finances may get past the hump if they connect with a friend they feel comfortable talking with about money or if they consult with a professional. Says McCullough: "Find a money buddy or an adviser to help. And if they make you feel stupid, find a different one."

Everybody has big questions about inheritance

Inheritance plans live largely in the dark, the survey shows. Two in five families have never discussed them, and three in 10 parents have no formal plans. Families rank inheritance next to last among topics they feel comfortable discussing — only sex and dating elicit more of a shudder.

And the less wealth parents have, the quieter things get.

It's not just that parents and kids don't communicate; it's that many don't even know what's at stake. More than one-third of adult children and nearly four in 10 parents aren't sure whether the older generation will have any assets left to pass down; just over one-fourth of parents can't estimate the size of their estate; and 43% of children and 38% of parents have no clue how much each of the kids will inherit.

The top reason parents stay silent: "There are too many unknowns about how long I will live or how much will be left." Inflation and other economic pressures top their list of concerns, along with possible long-term-care costs. Kids worry about those things on their parents' behalf, too, and some 16% are also anxious that their moms and dads will need financial help from them instead of the other way around.

Wealthier families — parents with incomes above $100,000 or estates worth $1 million or more — share those same top concerns. But they also keep quiet about estate plans because they do not want their offspring to count on an inheritance (cited by about one in three parents with estates estimated at $500,000 or more, for instance, compared with 19% of parent respondents overall).

That's understandable, says financial psychologist Brad Klontz, who notes, "You don't want your child's financial plan to be your death."

Love and good intentions are abundant

When asked what they'd want done or would do with an inheritance, both parents and adult children focused primarily on practical moves that would help the younger generation. Paying off debt. Buying a home. Saving to build wealth and a secure retirement. Providing a better life for the children of the adult kids and the parents' grandchildren.

Something else families agree on: Most adult children feel ready to manage an inheritance (70%), and nearly as many parents (67%) feel the same.

What would adult children ask their parents, if they felt comfortable? Sure, some (18%) were curious to ask, "How much?" But others wanted to know their parents' wishes for the money so they could respect those intentions (9%), and to understand more about the older generation's experiences (12%). As one adult child put it, "I would ask if they were truly happy in life."

David Chubak, head of wealth management and field management at Edward Jones, says families shouldn't keep questions, feelings and plans about wealth transfer inside. He encourages them to talk in advance of assets changing hands. "These are important conversations that touch every family and every level of wealth," he says. "My best advice is to start now."

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Stepping into the role of a trustee is a major responsibility, but it doesn't have to be overwhelming. At its core, being named a trustee means someone placed an extraordinary amount of confidence in your judgment and integrity to handle their assets for the benefit of others.

While the job comes with legal duties — from keeping accurate financial records to protecting trust property — your main objective is simply to carry out the grantor’s vision while looking out for beneficiaries.

It helps to know where your role begins and ends. While you might hear "trustee" and "executor" used interchangeably, they cover different ground: An executor wraps up a person's individual estate through probate; a trustee manages the assets held specifically within a trust. Understanding that distinction is your starting point.

The real work lies in navigating day-to-day decisions, balancing competing interests and staying on top of the administrative details that keep a trust running smoothly.

Trustee vs executor: How the roles differ

A trustee holds legal title to assets in a trust and manages them for the benefit of designated beneficiaries, according to the instructions in the trust agreement. An executor is appointed by a will — or designated by a probate court — to manage and settle a deceased person’s individual estate.

While both act as fiduciaries with a strict legal duty to act in good faith and in the best interests of the beneficiaries, their scope of work, duration of responsibility and oversight differ significantly.

Core duties and responsibilities of a trustee

When you accept the role of trustee, you assume a high standard of care known as a fiduciary duty. This means you are legally obligated to act with absolute loyalty to the trust beneficiaries, avoiding conflicts of interest and self-dealing.

Your primary job isn't to make bold financial moves, but to manage and protect the trust's assets strictly according to the grantor's instructions and for the exclusive benefit of the named beneficiaries.

You have the option to say "no" to being a trustee before you start, or you can step down later and pass the role to a successor named in the trust. You're also entitled to be paid for your time, with reasonable compensation usually stipulated in the trust document itself or guided by state law.

If you find the prospect at all intimidating, you can and should get outside help. "There are a lot of different components in how to administer a trust, and you can hire professional advisers to help you do that. Those fees are an appropriate expense of the trust," said Kerry L.S. Mast, a fellow of the American College of Trust and Estate Counsel (ACTEC).

• Duty of loyalty. You must place the beneficiaries' interests above your own at all times. You must strictly avoid self-dealing, conflicts of interest or using trust assets for personal gain, ensuring every decision benefits the trust.
• Duty of prudent administration and investment. Your main job is to protect the assets and investments of the trust, safeguard trust property (real estate, accounts, business interests) and invest liquid assets prudently to balance growth with income needs.
• Duty of recordkeeping and accounting. It’s vital to maintain detailed records of all income, expenditures, distributions and investments and to provide periodic accountings to beneficiaries. Your records should also include an inventory of trust assets, copies of important communications with beneficiaries/professionals and receipts for expenses.
• Duty of impartiality. When a trust has multiple beneficiaries, you can't show favoritism toward any one individual or group. You must balance competing interests fairly, such as providing sufficient current income to lifetime beneficiaries while preserving principal for remainder beneficiaries.
• Duty to follow the trust terms. The trust instrument serves as your ultimate guide and rulebook. You are legally obligated to execute the grantor's explicit instructions regarding investments, distributions and administrative procedures, departing from those terms only if ordered by a court or required by law.
• Duty to communicate. Transparency is key to maintaining trust and avoiding legal disputes. You must keep beneficiaries reasonably informed about the administration of the trust, provide regular financial accountings, and promptly answer reasonable requests for information about trust assets.
• Tax compliance. Obtain an employer identification number (EIN) for irrevocable trusts, file annual trust income tax returns (Form 1041) and issue Schedule K-1s to beneficiaries receiving distributions.
• Distributions. Follow the trust guidelines regarding when and how much to distribute to beneficiaries. Pay attention to discretionary vs mandatory distributions, age milestones and any health or education requirements.

What to do when you become a trustee

While your exact duties depend on the wording of the trust document, every trustee has basic tasks to complete to get the trust in order. This is a good place for a new trustee to begin.

Step 1: Review estate documents. Obtain and thoroughly read the trust agreement, any amendments and associated estate planning documents, such as the will. This step helps you understand the grantor’s exact intent, your specific authority as trustee, payout instructions and any conditions placed on distributions.

Step 2: Categorize assets. Take a complete inventory of all assets connected to the trust, distinguishing between liquid property (such as bank accounts and stocks) and nonliquid property (such as real estate, business interests, jewelry or physical collectibles). Knowing what the trust owns allows you to determine immediate management needs, insurance requirements and appropriate investment strategies.

Step 3: Review beneficiary assignments. Examine beneficiary designations across all relevant accounts and policies to ensure they align with the trust agreement. Verifying primary and contingent beneficiaries helps prevent assets from bypassing the trust unexpectedly or triggering unnecessary probate proceedings.

Step 4: Account titling. Confirm that all designated assets are formally re-titled in the legal name of the trust rather than the grantor’s individual name. Properly titling bank accounts, real estate deeds and brokerage holdings is essential to ensure you have legal control to manage, protect and distribute those assets.

Common problems and issues trustees encounter

Even with the best intentions, administering a trust rarely goes without a hitch. Most complications don't come from bad math or missing paperwork — they stem from human dynamics, vague trust language and the heavy legal burden placed on the trustee. Knowing the most common pitfalls ahead of time is the best way to protect both the trust's assets and yourself.

• Discretionary conflicts. Trust documents often give trustees discretion to approve or deny requests for funds (e.g., for health, education, maintenance and support). Deciding when to grant or deny requests can create friction with beneficiaries.
• Competing beneficiary interests:. Balancing the current income needs of lifetime beneficiaries (such as a surviving spouse) with the long-term capital preservation expectations of remainder beneficiaries (children from a prior marriage).
• Personal liability. Trustees can be held personally liable for financial losses resulting from improper investments, failure to pay taxes or misapplication of trust funds.
• Co-trustee deadlock. If multiple co-trustees are named without a clear tie-breaker mechanism, disagreements on investment strategy or distributions can paralyze administration.
• Administrative burden. Managing non-standard assets — such as closely held businesses, rental real estate or complex private equity investments — requires specialized expertise that many trustees might lack.

They trusted you for a reason

If you think you'll be managing a trust for your parents one day, take an opportunity to talk to them. An astonishing 51% of parents and adult children say they rarely or never discuss money, according to the Kiplinger Trillion Dollar Talk survey. The "element of surprise" is fun for birthdays or scavenger hunts, but that's not the case when you're on deck to assume an important responsibility.

Ultimately, serving as a trustee is less about mastering legal jargon and more about executing a series of thoughtful, deliberate choices over time. The real key to success lies in handling the trickier human and administrative moments — such as evaluating tough distribution requests, keeping peace among family members and maintaining pristine records to safeguard yourself from personal liability.

By honoring the boundaries of your role and making each decision with transparency and care, you can carry out the grantor’s vision with confidence and protect the people relying on you.

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The amounts are staggering. Over the next 20 years or so, U.S. households are expected to pass an estimated $124 trillion in financial assets to heirs and other beneficiaries, according to Cerulli Associates, a financial services research firm. That includes some $85 trillion going to the Gen X and millennial offspring of boomer and Silent Generation parents, with many trillions more headed to surviving spouses and charity.

Experts are calling it the greatest wealth transfer in history, and the drumbeat heralding its arrival grows louder every day.

To explore how American families are navigating this inheritance wave and offer smart advice to help them meet the challenge, Kiplinger commissioned an exclusive, national survey of more than 5,000 older parents and adult children, conducted by the research firm Morning Consult.

What we discovered is a mix of big hopes and deep uncertainty as the older generation prepares to pass down the assets they've built over a lifetime, the younger generation stands poised to receive them and concerns grow on both sides that outside factors could erode that wealth before it changes hands.

The results also make clear there is a big gap in expectations and knowledge between older and younger family members about the money and property at stake — in part because both sides are deeply reluctant to talk to each other about it. Among the survey's key takeaways:

• Nearly half of older parents expect to leave their kids a meaningful inheritance, but the majority of adult children don't think they're getting anything or aren't sure what might be left for them.
• The amounts involved for most families are not the life-changing windfalls recent headlines suggest but still have the potential for serious impact, from enabling the younger generation to buy a home to helping put their own kids through college.
• Many parents worry that a shaky economy and their own healthcare costs will upend their plans to pass down wealth — even as the children, facing big expenses of their own, wish their elders wouldn't wait so long to send money their way.
• Plans for gifting and inheritances live mostly in the dark because parents and kids would rather talk to each other about almost anything else — only sex and dating are more awkward topics.
• As a result, uncertainty casts a cloud over the inheritance process and keeps many families from taking the steps needed to make the most of these assets — moves that could also help parents and adult children forge an even closer bond.

"People are grappling with being asked to make important decisions that will impact their wealth and the assets they want to pass to future generations without having perfect information," says Valerie Galinskaya, managing director and head of the Merrill Center for Family Wealth.

"The individuals and families I see excel and do this most effectively don't wait for uncertainty to disappear. They build their plans and then adapt as life unfolds."

Here is what you need to know to ensure that you and the people you love plan for inheritance in a way that not only creates a smooth and effective transfer of wealth but also helps bring your family closer in the process.

The Great Wealth Transfer won't be great for everyone

Lest anyone feel bad that the assets parents intend to leave to children in their family can't be counted in eight or more digits, rest assured those megasize amounts that pundits are quoting about the Great Wealth Transfer aren't all they're cracked up to be.

More than half of the expected inheritances coming down the pike over the next two decades will be concentrated among the richest 2% of U.S. households, Cerulli estimates, leaving a lot less to be divided among everyone else.

How much less? About one-fourth of the parents who expect to leave an inheritance to their children estimate their estate will be worth less than $100,000, and about half put the total at less than $500,000, according to the Kiplinger–Morning Consult survey.

Just over one in 10 valued their estate at $1 million or more. Homes made up the greatest share of the wealth to be passed down, followed by life insurance, liquid savings and investments.

The numbers get whittled down even further when you consider that in many families these assets will be divided among more than one child. Roughly one in four parents thought each of their children would inherit less than $50,000 from them, with 44% estimating the amount per child would be less than $250,000.

Bequests in seven-figure territory were rare, cited by just 5% of the parents who expect to leave an inheritance. These findings are largely in keeping with Federal Reserve data, which shows that about half of heirs receive less than $50,000 and 30% of inheritances range from $50,000 to $249,000.

"That big, huge $124 trillion number is irrelevant to the vast majority of people — but it's not that there's nothing coming, either," says Teresa Ghilarducci, professor of economics at The New School for Social Research, who puts the number of adult children who can expect an inheritance at about 30 million.

That's a lot of potential heirs, but relatively few of them know what to expect. While nearly half of parents 55 and older expect to leave a meaningful inheritance for their children, only about one-fourth of adults ages 25 to 60 with at least one living parent think they'll receive one, the Kiplinger–Morning Consult study found.

Driving the disconnect: Relatively few families are talking about inheritance. Roughly two in five have never discussed the older generation's plans for passing along their assets, the survey reveals. And among those who have talked, it's mostly in generalities, such as whether the parents have a will or who will inherit something, rather than specifics, with details about the assets parents have, their value, or Mom and Dad's wishes regarding them.

"When families do not talk, everyone makes up a different story," Ghilarducci says. "That's when trouble starts."

"Parents may think they don't want to burden a child by talking about their death," says certified financial planner Douglas Boneparth, founder and president of Bone Fide Wealth, a New York City firm that specializes in advice for millennials.

"But not communicating a plan or conveying your wishes to the very person or people who ultimately will be responsible for settling your estate and dealing with your affairs will leave them in the dark and scrambling to figure things out while they're grieving over the loss of a loved one. It's an absolute kick in the pants and burdens them more than you could have imagined."

Lack of knowledge can also prevent the younger generation from making informed choices about their lives, financial experts say. That's especially true if the parents intend to gift money during their lifetime — say, to help with the down payment on a home or a grandchild's college education.

"Counting on nothing may seem like the safest approach for adult children, and the easiest emotionally," says adviser Stephanie McCullough, founder and CEO of Sofia Financial in Berwyn, Pa.

"But if knowing that your parents plan to leave you some money might help you breathe a little easier financially now or do a little more for your own kids, it would be good to have some sense of it."

Uncertainty prevails — and paralyzes estate planning

There are plenty of reasons why many families shy away from conversations about money generally and inheritances specifically.

For starters, no one likes to talk about their own mortality or think about their parents dying. Or about the possibility that illness or disability might drain the older generation's savings.

Then, too, many boomers and members of the Silent Generation grew up in homes where talking about money was considered impolite or taboo. (Our survey found that families would prefer to talk about almost anything else — politics, mental health, you name it — than inheritances. Only sex was a more awkward topic.) And, especially at greater levels of wealth, parents may worry that learning of an inheritance could be de-motivating for their children.

Adult kids also don't want to raise the subject and risk coming across to Mom and Dad as grasping. "Bringing up a parent's finances can feel like you're being greedy or morbid," Boneparth says. "Millennials want to know but feel like they shouldn't have to ask."

Yet the top reason families stay silent, the Kiplinger–Morning Consult survey shows, is uncertainty. More than one-third of parents who haven't discussed inheritance plans with their adult children say there are too many unknowns about how long they'll live or how much money they'll have left.

Overall, the top worries among parents about the inheritance they've earmarked for their kids are that, given inflation and other economic pressures, they might not have much left to give and that long-term care or other health costs might deplete their estate. And that was true even at higher levels of income and wealth.

Another source of uncertainty for many parents is whether and how long they may need to help their kids financially now, given sometimes shaky career paths, high housing costs and, for some, hefty student loans, says David Chubak, head of wealth management and field management at Edward Jones.

The Kiplinger–Morning Consult study confirms that lots of parents are providing that support: More than four in five say they have given their adult kids financial assistance, from helping with expenses or debt to regular gifting.

"The reality is we live in an age of financial uncertainty and anxiety like no other," Chubak says.

Bundle all of that uncertainty together and it can become paralyzing, stopping parents from crafting an estate plan or talking about any plans that have been made, says Joshua Morris, vice president of thought leadership and research insights at the Fidelity Center for Family Engagement.

Parents in the Kiplinger survey who were uncertain about the value of their estate, for instance, were half as likely to have a will as parents who were confident about leaving an inheritance, and even fewer had discussed estate-planning issues with their kids.

"The senior generation often feel they need everything completely buttoned up before they say anything to their children, so feeling uncertain about one or two things regarding estate planning shuts down dialogue about everything," Morris says.

"And if you're not having dialogue, that compounds the uncertainty both generations feel, because without conversation, there's no flow of information or talking about concerns and wishes."

What the "kids" really need to know about inheritance

When it comes to inheritances, parents are usually most reluctant to share specific numbers, such as how much money they have saved or expect to leave to each child, financial advisers say.

"Mom and Dad worry if they tell the kids they have, say, a million dollars, the kids will think they're rich — the gifts should be bigger at Christmas, they should be doing more for the grandkids, and why aren't they helping me more when I'm struggling to pay my rent?" says Kurt Supe, a certified public accountant and retirement planner at Creative Financial Group in Indianapolis and CFD Investments.

"Meanwhile, the parents are thinking, We don't know if we have enough to last our lives, and a long-term-care event could wipe out half of what we've got."

If you'd prefer to keep the amounts to yourself, or you just don't know what they'll be, that's fine, advisers say. And if you choose to disclose, keep it to broad ranges and possibilities, because circumstances can change.

More important than the numbers, though, is sharing practical details, such as whether you have a will and, if so, where you've stored it, as well as insight into the reasons for key decisions, such as who your executor will be.

"A lot of times people think about disclosure as a light switch — you're either on or off," says Galinskaya at the Merrill Center for Family Wealth. "We prefer a dimmer-switch approach."

New research from the Fidelity Center for Family Engagement suggests what younger family members most want to know are details that will bring them peace of mind, instead of anxiously wondering what to expect. While the definition of peace of mind differs from individual to individual, and from family to family, common themes pop up.

For instance, a separate Fidelity study found that 76% of the younger generation want to know whether they are named as beneficiaries — something that applies to retirement accounts and life insurance policies as well as being named in a will or trust — but only 35% of baby boomers have shared this information.

A Merrill report identified clarity around expectations as the top concern of younger family members, including whether parents have specific wishes for how any money they inherit should be used. Adult children with a special-needs sibling might be concerned about whether their parents have made provisions for care when they're no longer around to provide it.

The key is to identify the issues that might cause confusion or anxiety in your particular family circumstances. And if younger family members approach the subject respectfully, they don't have to wait for parents to initiate the talk.

Says Boneparth, "The best thing a millennial child can do is give their parents a reason to have a conversation about their estate planning that has nothing to do with money. It's asking about their wishes, their values and their worries."

One exception to the suggestion that parents can stay tight-lipped about dollar figures is if you intend to provide financial gifts during your lifetime, because that knowledge might affect the decisions and choices your children make.

"Let your adult children know whether they can expect financial help from you at key moments in their life when a lump sum would really help, such as when they want to buy a house, or when they graduate from college, get married or have a child," says Ghilarducci. "Be frank and up front about what you have budgeted."

How families can set up for estate transfer success

A smooth transfer of wealth requires a clear plan that lays out who your heirs will be and how you want your assets divided among them. It should also appoint individuals you trust to settle your affairs, with legal documents in place to ensure your wishes are upheld. Few families, however, have such a plan in place.

"Most people take the ostrich approach: I'm going to stick my head in the sand and hope I never have to deal with this," Supe says.

In fact, only four in 10 parents in the Kiplinger–Morning Consult survey say they have a will, just over one-third have designated beneficiaries on retirement accounts or life insurance policies, and a scant 14% have written a letter of instruction outlining their wishes.

Wealthier families are far more likely to have the legal paperwork drawn up, but large swaths of them still go without. About one-third of parents with estates worth more than $500,000, for instance, don't have a will, and nearly half haven't documented what they want to happen to their personal possessions.

"A will is not just for rich people," Ghilarducci says. "Even a modest estate can include a house, retirement accounts, a car and personal property. Somebody has to sort all that out. Parents usually need a will, a financial power of attorney, a healthcare directive and updated beneficiary forms. A simple letter explaining where everything is can save the family a lot of grief."

Once the documents are drawn up, you'll need to communicate that information to your children and other loved ones. Let them know where the papers are stored, whether you place them in a digital file, a physical binder or both.

And it's not a one-and-done exercise; you'll want to revisit and update, as needed, every few years and after major life milestones.

"The plans that worked for you in your fifties may need to be adapted in your sixties, as well as once you retire, when your children get married or you have grandchildren, and then again in your seventies and eighties," says CFP Marguerita Cheng, CEO of Blue Ocean Global Wealth in Gaithersburg, Md.

You will also need to consider how taxes may impact a planned inheritance — an issue that causes a lot of confusion for both generations, the Kiplinger survey shows. None but the ultra-wealthy will owe federal taxes, with the amount exempt from estate taxes now at $15 million for individuals and $30 million for couples.

However, about a dozen states have estate taxes of their own, including Oregon (exemption: $1 million), Rhode Island ($1,838,056) and Massachusetts ($2 million). If you live in one of those states and calculate your net worth in seven figures, you'll want to consult a financial adviser about ways to minimize the impact.

A more pressing issue for most families: If you plan to leave money in a traditional IRA or 401(k) to your children, they could be in for a big tax hit. Under a recent rule change, heirs other than a spouse now typically have to withdraw all the money in these accounts by the end of the 10th year after the original IRA owner's death rather than stretching withdrawals over their life expectancy, and they'll pay taxes on the money at their ordinary income tax rates.

A possible double whammy: Those withdrawals could push heirs into a higher tax bracket.

"The biggest threat to eroding the value of an inheritance for adult children who are beneficiaries of traditional retirement plans is the possible tax hit," Supe says.

What to do? Supe suggests you might convert all or a portion of a traditional IRA or 401(k) to a Roth account over time. You'll pay income tax on the amount you convert, but your children will then be able to withdraw the money tax-free when they inherit — a strategy that makes sense if you are in a lower tax bracket than your kids, as is the case for many retirees with offspring who are in their peak earning years.

You'll want to make sure, though, that your withdrawals from the traditional plan don't push you into a higher income tax bracket or income tier for Medicare, which could cause your premiums to increase sharply.

McCullough says some people are reluctant to do the conversion and pay taxes up front because they've been taught to defer, defer, defer, and it's hard to break that mind-set. She says, "Think of the taxes you'll pay as part of what you're gifting to your children, a way to maximize the value of what they inherit from you."

Issues that can topple your inheritance plan

One of the thorniest challenges that many families face in transferring wealth to younger generations: The great now-versus-later debate.

Nearly twice as many adult children in the Kiplinger–Morning Consult study say they'd prefer their parents help them financially now, when their biggest life expenses are upon them, as those who say they favor getting a bigger inheritance later.

With older generations now living longer, healthier lives, it could be a long wait — 10 to 20 years or more — and millennials and Gen Xers are buying homes, raising children and paying for college now. Indeed, Fed data shows that inheritances in middle-class and affluent families most commonly go to recipients in their early to mid-sixties, when those heirs are often closing in on retirement themselves.

Many parents, however, aren't on board — with good reason. The largest segment of parents in the survey (42%) intend to wait to provide an inheritance, most commonly because they want to be sure they have enough money to support themselves throughout their lifetime. Just 14% said they would rather give more now to see their children benefit from the money.

Then, too, a lot of parents are already providing a generous helping hand. Nearly half of the parents in the Kiplinger–Morning Consult survey report they have provided financial help to adult children on an as-needed basis, nearly one-third have helped with other expenses and one-fourth have assisted with major life events.

Similarly, recent Visa research shows that one in four millennial homeowners received help with the down payment from their parents, and about the same number said they couldn't have purchased the house without it.

How can families navigate the competing, compelling needs of both generations? "It's a balancing act," says Cheng. "While parents don't want to give away too much during their lifetime, the flip side is that if you wait until you're gone, did your money really have the greatest impact it could have?"

Cheng suggests putting parameters around the financial help you offer now. For instance, you might provide money for a specific purpose rather than ongoing, unrestricted gifts — say, supplying the money for a down payment, paying for a grandchild's music lessons or sleepaway camp, or contributing to a 529 college-savings plan.

If you do choose to gift annually — in 2026, you can give up to $19,000 per recipient, without filing IRS paperwork; couples can give up to $38,000 — make it clear that you'll revisit your strategy every year and that you may not always be able to give the amount you've been giving, or be able to give at all, if your financial circumstances or needs change.

The key, says Galinskaya, is to avoid binary thinking. In other words, do not consider gifting to be an all-or-nothing proposition and that you'll have to do it forever once you start, or that you'll always have to give the same amount to each of your children. "There's a spectrum of options," she says.

For parents with more than one child, the question of fairness is perhaps toughest of all. Typically, parents are eager to avoid discord among siblings. That's likely why the vast majority of them in the Kiplinger–Morning Consult survey — 71% in all —said they intend to divide their assets equally among their children.

Sons and daughters, however, are less convinced that's the best approach. Although half of the adult children in the survey preferred an even split with siblings, one in five thought inheritances should be based on factors such as how much each of them had helped their parents or gotten financial help in the past (11%) or each one's financial need (9%).

Many also anticipated trouble ahead, with one-third of the adult children respondents expecting an inheritance to create conflict with their siblings. And experts agree: The risk is high.

"Adult children will often view inheritances through the lens of unresolved issues and patterns in the family, especially if the way assets are divided between siblings comes as a surprise to them," says financial psychologist Brad Klontz, coauthor of Psychology of Financial Planning. "Someone feels hurt and thinks, Oh, Mom must have loved you more than me, or You influenced our parents behind my back."

For many parents, it's their worst nightmare.

The best way to avoid that outcome is for parents to talk with their children in advance about how assets will be divided and, critically, why. "Err on the side of equality unless there's a good reason not to — and sometimes there is a good reason not to. Maybe one child works in the family business, one puts in more effort, another has special needs," says Galinskaya.

"A good outcome is less about whether dividing things equally or fairly is best and more about how you communicate your actions and explain the intent behind them."

Leaving a legacy beyond money

Experts say that's generally true of inheritance planning. "The biggest mistake parents can make is passing down money without communicating the family values that drive your thinking," says Klontz. "That could be and should be the most valuable part of your legacy."

Make sure the conversations you have as a family about transferring wealth are two-sided and collaborative, not just parents delivering news and rendering decisions from on high, advisers say. "It's Mom and Dad's money, and they get to choose what to do with it. But children should have a voice, if not a vote, in the process," Galinskaya says.

Rather than a single big talk, think in terms of having a series of smaller chats over a long period. "One misconception about the Great Wealth Transfer is that it is a single point in time, the reading of the will, like the movie scene where everyone is in the room and you find out where all the money goes," says Joshua Morris of Fidelity.

"We like to reframe the transfer as a transition that's happening over decades as parents move into and through retirement — planning, gifting and adapting plans along the way."

Fidelity uses the skiing concept of bunny slopes and black diamond trails to suggest how the conversations should move from initially low-stakes, emotionally easy topics — say, what to do with family heirlooms or where the will and other documents are stored — to more challenging subjects around inheritance and estate planning involving how assets will be divided and their value. (For more about the best ways to approach these conversations, see our article on talking to your adult kids about inheritance.)

Each conversation is an opportunity for parents and children to share feelings as well as facts, and for parents in particular to provide insight about what they view as the purpose behind the assets they've accumulated, big or small, and their wishes for the next generation.

"Whatever number is attached to the wealth you've built, it is the story of your career, the story of your life, and there's a vulnerability and emotionality attached to sharing your story that brings families closer together," Morris says.

Fidelity's latest research bears that out. It found that parents who regularly share planning details and keep family members informed are more likely to report peace of mind and confidence about the future than those who don't. Adult children will probably feel a lot better too.

Says Morris, "That's a payoff for families that goes far beyond money."

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Joseph Moore's oldest daughter was 10 years old when she raised the question some parents dread: Are we rich?

She'd noticed that, unlike her friends, she lived in a gated golf course community with celebrities as neighbors, Moore says. The family's affluent lifestyle reflected the wealth Moore had built through real estate investing. But he was quick to challenge his daughter's assumption.

"I said to her, 'No, I'm rich,' " Moore says. "'You have what you've put in your savings account.'"

The distinction was intentional. Moore wanted his daughter to understand he had worked to create his wealth, and she would have to do the same to create her own fortune.

That doesn't mean that Moore's oldest daughter and her younger sister won't benefit from the wealth he has amassed. Rather than save the conversation for adulthood, Moore has a multiphase plan for talking with his daughters, now 13 and 6, about money and how he will share his assets with them. The framework grew out of research for his best-selling book, How to Get Rich in American History: 300 Years of Financial Advice That Worked (& Didn't).

He's already started teaching them basic financial concepts and money-management skills. With his teenager, he has moved on to explaining the kinds of opportunities he'll pay for, such as college, a down payment on a home or a business venture. When his daughters are mature enough, he will share details about what assets he will pass on to them and others, including charities.

"I'd much rather them be handed these things in phases than think that there's some huge pot of gold that they're going to get at my demise," Moore says. The real inheritance he hopes to leave his daughters, he says, is competence: "That to me is the lesson of history, that competence outperforms trust funds."

Most families don't take such a deliberate approach. More than half of parents ages 55 and older surveyed by Morning Consult for Kiplinger say they rarely or never discuss money with their children.

Talking about inheritance is even more taboo. Both generations rank it as one of the most challenging topics to raise — more uncomfortable than talking about mental health, politics, or even your end-of-life wishes and funeral arrangements.

Financial experts say that avoiding these conversations can leave children unprepared to manage wealth and families vulnerable to confusion or conflict when assets eventually change hands.

"I have seen many families really struggle, be torn apart due to surprises about things that came out after people passed away," says Ruschelle Khanna, a therapist with 25 years of experience working with high-net-worth families and author of Inherited Trauma and Family Wealth.

One reason many find it difficult to have these discussions is that there's little historical precedence for having them, Moore says. In the past, few families had the type of wealth that could be bequeathed to the next generation. Since the shift from pensions to 401(k)s began in the early 1980s, Americans have been retiring with more liquid assets that can be passed on when they die, Moore says.

Known as the Great Wealth Transfer, $105 trillion is expected to be handed down — largely by high-net-worth households — to heirs through 2048, according to the consulting firm Cerulli Associates. After removing the top 1% from the equation, there's still an estimated $36 trillion that will be transferred from boomers to their Gen X and millennial children over the next two decades, according to Visa Business and Economic Insights.

"This is a newer conversation for middle-class families," Moore says. "If your parents didn't sit you down and explain how you were going to inherit your wealth, you don't know how to do it with someone else."

That doesn't mean you can't learn. Experts say productive inheritance conversations aren't about revealing dollar amounts all at once. Instead, they recommend treating them as an ongoing dialogue that evolves with your child's age and maturity and any changes in your own circumstances or views. Here's how to start.

The case for talking about inheritance

When it comes to inheritance, there's a transparency gap. Nearly half of parents expect to leave money or assets to loved ones when they die, but only about one-fourth of adult children expect to receive an inheritance, according to the Kiplinger–Morning Consult survey.

The most-common reasons parents give for not talking are that there are too many unknowns, they don't have a clear plan or that they simply haven't gotten around to having the conversation, the survey found.

"I have had clients say, 'I don't care what happens because I'll be dead,'" says Sandi Bragar, chief client officer at wealth management firm Aspiriant in San Francisco.

If you die without any estate-planning documents, such as a will or trust, that spell out who gets what when you die, your state's laws will determine how your assets will be distributed. "People of all net worths ought to have a plan," says Michael Whitty, an estate-planning attorney with Smith, Gambrill and Russell in Chicago. "Even if they are of very modest means, they should have at least a will."

Online will and trust creation services, such as LegalZoom, Trust & Will and Quicken WillMaker & Trust, are low-cost options. However, Whitty advises working with a professional who can ask the right questions about your wishes to tailor estate-planning documents to your needs, rather than trying to rely exclusively on self-help services.

Once you have a plan, it's important to let your family know that you have one and to share some details. "One of the biggest mistakes is not communicating with your children or asking your advisers to communicate on your behalf," says Dawn Jinsky, a partner with Plante Moran Wealth Management in Ann Arbor, Michigan. "They need to hear it from you."

If they don't, your children could make assumptions about the reasons you won't share inheritance information with them. They might think that you don't trust them with money, Jinsky says. Or they might have unrealistic expectations about what they will inherit.

Lack of communication can also leave children unprepared for the wealth they receive or roles they'll have to fill. "For example, if a child is meant to become a trustee of a trust, we want to help the client make sure the child has the skills and competency to fulfill the responsibilities of the trust," Bragar says.

Plus, an unwillingness to discuss your plan and explain the reasoning behind your decisions can lead to resentment or disputes among your children.

"There are plenty of stories of families throughout history who go to the will reading to find out that what they had assumed would be a fair and equitable distribution was not," Moore says. "Your legacy is forever locked into that last moment of conflict."

When to have conversations about inheritance

The best time to start talking about inheritance isn't when you're drafting your estate plan. Ideally, parents should start laying the foundation for discussions as soon as their children can understand the concept of money. "The families that do this the best begin as young as possible," Khanna says.

When children are in elementary school, conversations can focus on family values and money-management basics. As children mature, parents can gradually introduce more information about family finances, including goals for their wealth and, eventually, details about their inheritance planning, Whitty says. The goal is to avoid leaving children to fill in the blanks.

"If you're silent, the kids might think, I don't know if I'll get anything, but I may get a lot," Whitty says. "That could distort their motivations about their own careers, personal development, even their choice of a potential spouse."

Parents who missed earlier opportunities shouldn't assume they have waited too long. Experts say discussions with adult children are essential — as long as they happen before a crisis forces the issue.

"I'm sure a lot of these conversations occur on the deathbed," says David Russell, a wealth adviser with Argent Trust in Ridgeland, Missouri. "At that time, it's too late to do anything planning-wise."

Don't let reluctance to talk hold you back. "If you're not ready to jump into the conversation, find an adviser as soon as possible," Khanna says.

She recommends working with a financial planner with experience facilitating family money talks. (You may be able to find one using the directory at 2164.net/advisors, which lists financial pros who focus on multigenerational planning and family philanthropy.)

If emotional barriers are getting in the way, a financial therapist can help you address fears that are preventing you from sharing inheritance information with your children. You can find a financial therapist through the Financial Therapy Association

What to share about inheritance

Before you talk, Bragar recommends identifying what you hope to achieve. "How do you want your family to think about the wealth that will be left?" she says.

"When people care about their family members and want there to be some level of harmony, it's easier to go into the conversation when you visualize what is important."

Then, consider the questions your children might have. "What type of information might they need about you to live their lives stress-free?" Bragar says. For example, they might be wondering whether you have enough money to live comfortably in retirement or to pay for long-term care.

Bragar says some parents are reluctant to spend savings because they want to leave more for their children — even though that can be the last thing the children want.

Russell has what he calls "who does what when" meetings with his clients and their children to foster conversations about both wealth transfer and long-term-care planning. The focus on logistics can help keep emotions at bay to ensure a more productive discussion, he says.

To replicate the process, parents can create three columns on paper or a computer document to list the people they expect to be involved with their finances as they age and after they die, what role each person will play, and when they are expected to fill those roles. Parents could add a fourth "Why" column to explain the reasoning behind their choices, Russell says.

Note that there's not a column for "How much." Russell says that most of his clients aren't willing to share the details of how much they have.

Other financial advisers meet with the same resistance. "Clients feel like communication means opening the curtain and sharing everything," Jinsky says. "You don't need full transparency with your children."

There are a handful of reasons why it could make sense not to share specifics about how much your children or family members will inherit. For starters, you might end up needing to spend more of your savings than you think, especially if dementia or another chronic condition forces you to pay hundreds of thousands of dollars for many years of care.

Another reason: You might change your mind. "Don't lock yourself into a conversation your children will remember," Jinsky says. For example, one of her clients who lived to age 96 changed her estate-planning documents 32 times — every time she did or didn't get a call on her birthday.

However, Jinsky cautions that full disclosure is needed in some circumstances, such as when you've legally appointed your child to manage your assets when you die. "If you're in your eighties and your child is the trustee, that is a pull-the-curtain-and-share-everything moment," she says.

Another reason parents might opt for sharing some details with children about what they can expect to inherit or receive while you're still living: If knowing, even just broad ranges, might help them make more-informed financial and estate-planning decisions in their own lives, Whitty says.

How to keep inheritance conflict to a minimum

Experts recommend having a family meeting with all of your children to share your inheritance plans if everyone gets along well. This holds true even if you plan to divide your assets unevenly or give the bulk of your wealth to charity, your place of worship or a similar organization.

Children who are mature and have a strong relationship with their parents and each other should understand why, for example, their parents plan to give more to a child with special needs, Whitty says.

When a family meeting isn't the best choice: "If there is resentment, jealousy or in-fighting, or any sort of disrespect, maybe you want to have those conversations individually," Khanna says. It also can be helpful to have a third party, such as an attorney, financial adviser or therapist, mediate potentially difficult inheritance talks to "slow the conversation down and hold space for big feelings," she says.

Another option is to write letters to your children to explain your decisions. This tactic can also be effective if you have children who are unwilling to engage in a conversation because of their fears about aging and death, Khanna says.

Although it's your money at the end of the day, and the approach you choose is ultimately up to you, Khanna says, "I always try to encourage families to make compassionate decisions knowing the impact it will have on people."

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

More Trillion Dollar Talk

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• These Are the 2 Legal Documents Everyone Should Have, Courtesy of an Estate Planning Attorney
• Is Your Will 'Fair'? Estate Planning Is About More Than Money

For over a century, Kiplinger has been dedicated to empowering our readers to manage their finances in order to better their lives. We're now on the brink of one of our biggest financial challenges yet, as an estimated $124 trillion is expected to be passed to heirs and other beneficiaries over the next 20 years in the U.S.

That's why we've been digging into Americans' feelings and preparedness around estate planning and inheritance. With Morning Consult, we surveyed over 5,000 older parents and adult children as part of our Trillion Dollar Talk campaign and found staggering differences between expectations and reality, as well as a deep reluctance for families to talk about inheritance and estates with each other.

Among the highlights of our research, we found that:

• Roughly two in five families have never discussed inheritance plans – and parents report having shared more than their children recall hearing.
• 60% of adult children would rather talk to their parents about politics than inheritance, while 80% of parents would rather talk to their kids about their physical health than the inheritance plan.
• Nearly twice as many parents expect to leave a meaningful experience (46%) as adult children who expect to receive one (23%)

The top reason parents say they are avoiding the conversation is that there are too many unknowns, including what their estate will be worth after covering healthcare costs and inflation.

It's this uncertainty that Kiplinger wants to conquer, to help our readers feel more confident in their finances and in talking about their finances. If families are not open with each other now, problems are brewing in the future (especially as a third of adult children reported they expect that an inheritance will create conflict with their siblings).

The largest wealth transfer in U.S. history is underway but many families are avoiding those awkward conversations about inheritance and estate management.

Take this 10-question quiz and discover your inheritance readiness profile: Are you a Wealth Steward, an Informed Strategist, or a Novice Navigator? We have tips for each profile to safeguard and make the most of your inheritance.

An inheritance can bring significant opportunities, but it also comes with complex financial and legal responsibilities. Whether you expect a windfall soon or simply want to be prepared for the future, identifying your strengths and blind spots is a good first step.

Sudden wealth doesn't change who you are. It does reveal how prepared you are.

I recently read a news story in which a lottery winner who received a jackpot worth more than $167 million had reportedly been arrested four times within 14 months of receiving the money.

Such stories often generate headlines because they reinforce the belief that sudden wealth changes people.

After more than 25 years as a financial planner, I don't believe that's entirely true.

I believe sudden wealth reveals whether someone has developed the habits and discipline necessary to manage it.

While lottery winners capture the headlines, they're among the least common examples of becoming suddenly wealthy.

Sudden wealth typically arrives in four main ways:

• Inheritance
• The sale of a closely held business (liquidity event)
• A significant legal settlement
• On rare occasions, a lottery or other unexpected windfall

Although each situation is unique, they all have one thing in common. Money that was once unavailable suddenly becomes accessible. That transition is both psychological and financial.

People who accumulate wealth over time (commonly decades) become accustomed to seeing money in their accounts and formulating successful financial and emotional discipline.

• They watch retirement accounts fluctuate with the markets without panic
• They realize that consistent contributions, compounding returns and time is what it took to get to a particular level

The goal is to make work optional through having a balance sheet that yields enough to replace your income.

For some, their balance sheets aren't there yet, or maybe they were never working toward financial independence, then one day the inheritance arrives or the settlement comes in. Whatever the source, the money is available, and it is now a spendable currency.

Real-life examples

I've watched families respond to this moment very differently.

Years ago, I worked with a blue-collar worker and father who spent his entire working life doing everything right. He lived modestly, saved consistently and built a meaningful estate because he wanted to leave something for his three children.

After his passing, two of the children requested checks rather than seeking guidance or developing a long-term plan. Within a couple short weeks, their inheritance was spent on a trip to Las Vegas. The third sibling made some responsible decisions, but within a relatively short period, those funds had also been depleted.

It would be easy to conclude they simply made poor choices. I see it differently. They inherited the money. They never had the opportunity to develop the habits that created it.

I've also witnessed the opposite. A client's mother accumulated substantial wealth during her lifetime and explained not only what she hoped her daughter and son-in-law would receive, but what she hoped the wealth would accomplish.

Today, they continue to manage those assets thoughtfully, taking disciplined annual distributions while preserving the portfolio for future generations.

The difference between these two families wasn't as much about the size of the inheritance. It was the mindset, and the steps below can help anyone with mental framing and decision-making related to sudden wealth.

4 steps to staying wealthy after experiencing 'sudden wealth'

1. Do nothing.

When a significant amount of money suddenly appears on your balance sheet, resist the urge to act.

In most situations, I recommend making no major financial decisions for four to six months. Don't purchase a vacation home, quit your job or make large investments simply because the money is available. The assets aren't going anywhere.

What often changes during that time is your perspective.

2. Understand what you have.

Before making any financial commitments, determine the tax consequences and legal obligations associated with your newfound wealth.

Depending on how the assets were received, there might be income taxes, capital gains taxes, inheritance taxes, trust provisions, estate planning implications or other considerations that affect what's truly available.

3. Decide what this wealth is meant to accomplish.

Start with your own household. Does this wealth provide financial independence or greater flexibility?

Once your household is secure, consider whether you want to help family members, support charitable causes or strengthen your community.

Finally, revisit your estate plan so your own legacy reflects your new financial circumstances.

4. Create a sustainable spending plan.

What lump sum amounts are immediately required? Evaluate what impact spending today has on future income.

Risk tolerance and time horizon will influence what amount of annual distribution is sustainable.

Look for articles on strategies and options on calculating a safe withdrawal rate and methodologies of creating a paycheck from your portfolio.

The real measure of success

After more than two decades helping families navigate life's biggest financial transitions, I've come to believe that sudden wealth isn't really about money. It's about stewardship.

Money can be transferred in a single day. The judgment required to preserve it often takes time to develop.

Whether your wealth arrives through an inheritance, the sale of a business, a settlement or an unexpected windfall, the greatest responsibility isn't deciding what to buy. It's properly preparing before starting to deploy your newfound resources.

Related Content

• Suddenly Inherited Money? The Critical Steps You Need to Take First
• Treating Your Inheritance as 'Extra Money' Is a Sure Way to Blow It: Instead, Use This Simple Technique for Financial Windfalls
• What Not to Do After Inheriting Wealth: 4 Mistakes That Could Cost You Everything
• Your First 5 Potential Moves When Inherited Wealth Makes You Rich Overnight
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

While Roth conversions are often talked about in retirement planning, they aren't the right strategy for everyone.

For retirees with modest savings and no pension, leaving traditional accounts untouched until it's time to start RMDs can work well. But retirees with pensions face an entirely different tax reality.

In a recent article, Joe F. Schmitz, a CFP® and CEO of Peak Retirement Planning, explains why Roth conversions are so important for retirees with pensions. Schmitz is a regular contributor to Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation.

Check out these five questions to test your knowledge about Roth conversions, pensions and taxes.

Good luck! (Don't worry if you miss an answer: You can follow the links below the quiz to brush up on your knowledge.)

Related Content From Adviser Intel

• Why a Roth Conversion Is Wrong for Most People But Often Right for Pension Holders
• When Is a Roth Conversion a Bad Idea? 6 Situations Retirees Should Consider Carefully
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Americans who are over the age of 55, mainly baby boomers, own more than half of the country's wealth. Over the next two decades, it will be passed down to the generations that follow, marking the greatest wealth transfer in our country's history.

While many of us look at inheritance as something purely for the wealthy, 66% of Americans either expect to or have already received an inheritance from their parents, according to a survey from Choice Mutual.

Receiving any kind of inheritance can be overwhelming, and being unprepared can lead to losing much of that money to poor financial decisions or taxes. If you think you may be a part of the Great Wealth Transfer, either as a provider or a beneficiary, here's how to avoid those pitfalls.

1. Start conversations now

One of the biggest issues with the trillions of dollars expected to be passed down during the Great Wealth Transfer isn't the money itself, but beneficiaries being unprepared to manage the assets they receive.

Although it may be uncomfortable, discussing the plan for these ahead of time helps family members know exactly how much they will receive and what taxes they might expect.

If beneficiaries don't have a chance to discuss the inheritance before their loved one passes away, they may end up making important decisions while they're grieving.

Bringing the topic up well beforehand will give them time to plan before their emotions take over, helping reduce the likelihood of poor decisions or impulsive spending.

Some of the most successful inheritances I have seen are among families who prioritize these conversations.

2. Avoid spending sprees

If you suddenly receive a windfall, it can be tempting to spend money on the things you've always dreamed of. You may want to buy a bigger house, a more expensive car or finally take that extravagant vacation. But going on a shopping spree can lead to disaster.

Your dream items will come with additional costs, such as taxes, insurance and maintenance, and those will stick around long after the initial purchase.

You should look at your inheritance as a long-term investment, not an excuse for a one-time splurge. If you have a good plan for the assets, they should help provide financial security for years.

Using the money to pay down any debts you have or starting an emergency fund is much more valuable than spending it on an asset that will eventually lose its value.

3. Consider tax implications

While the tax implications that come with an inheritance will depend on what you inherit and where you live, receiving an inheritance can trigger estate, capital gains, inheritance or income taxes.

For example, while many people may believe they will owe federal income taxes on any inherited money they receive, that may not be the case. Cash that is passed down from a person who has passed away is not considered taxable income for the beneficiary.

If you are gifted a property as an inheritance, receiving it is not taxed in most cases. However, depending on how you plan to use it, you need to consider a few things:

• Ongoing property taxes, insurance and maintenance costs
• Capital gains tax if the property value increases significantly before it is sold
• How you will use the property (personal, investment, rental) determines which tax deductions you can take

Most people don't have a full understanding of which processes will be triggered when estates are handed down. It's important to work with a financial professional before signing anything.

4. Build a strong team

Being part of the Great Wealth Transfer may be life-changing, but it could also be overwhelming. You may be faced with financial decisions you've never had to navigate before.

Having a strong team of professionals, such as a trusted financial adviser, tax professional or estate attorney, can help everyone involved avoid costly mistakes and create strategies that align with their goals.

A large inheritance is a life-changing event, and surrounding yourself with the right people can be the difference between enjoying it and watching it disappear.

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• Preparing for an Inheritance: Don't Let Your Blessing Become a Curse
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• Four Things to Know About Managing a Loved One's Finances
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

The ultra-wealthy don't just have more money than 62% of Americans. They have a handful of estate-planning secrets to help protect and pass on their wealth. From revocable trusts and Roth conversions to tax-efficient investments, these high-level tactics are designed to minimize taxes, shield assets, and create a lasting legacy.

And what a legacy. Baby boomers are expected to pass down $84.4 trillion to their heirs by 2045 as part of the "Great Wealth Transfer." Roughly half of that amount will come from high-net-worth and ultra-high-net-worth households. The good news? Many of the proven strategies used by these households can be adapted by retirees with modest incomes, without breaking the bank.

Matt Odgers, co-founder of Opelon LLP, says one of the biggest misconceptions is that estate planning is a tax strategy used only by the wealthy. "For most retirees, it has nothing to do with tax. What wealthy families are really buying is control and privacy; it's a clean handoff, and those things cost the same for everyone."

Here are 8 powerful estate planning secrets the rich actually use that you can realistically "steal."

1. The revocable living trust

The ultra-wealthy rarely let their assets go through probate. Instead, they place most of their major assets, including homes, investment accounts and other property, into a revocable living trust, Odgers says.

“The wealthy aren't leaning on a will. A will does not avoid probate, and probate is generally slow, public, and costly. A revocable living trust does the quiet work instead.”

How you steal it: Place major assets in a revocable living trust to avoid probate and allow a seamless transfer to your heirs. A living trust is flexible and can be set up easily with an attorney for about $400–$4,000. Then, “fund” the trust by transferring your house, bank accounts, and other assets into the trust’s name. Don't worry. The trust can be changed or revoked anytime during your lifetime, giving you full control while also protecting your family from the hassle of court delays and probate (and high fees) later.

2. The gift tax exclusion

The ultra-rich understand that making a gift or leaving their estate to their heirs doesn’t ordinarily affect their federal income tax, according to the IRS(pdf). With a bit of strategic planning, they avoid tax implications by using both the annual gift tax exclusion and the lifetime exemption, while shielding their wealth from future tax increases.

How you steal it: You don’t need to be rich to benefit from the annual gift tax exclusion. In 2026, you can gift up to $19,000 per recipient (child, grandchild or anyone else) completely tax-free. A retired couple can gift $38,000 per person annually. Over 10–15 years, this can move significant money out of your estate while helping your loved ones when they need it most.

3. Spousal Lifetime Access Trusts (SLATs)

A SLAT is an irrevocable trust that one spouse creates for the primary benefit of the other spouse. Ultra-wealthy couples use SLATs to remove assets from their estate while still allowing their spouse to receive income or even principal from the trust if needed during their lifetime.

How you steal it: Create an irrevocable trust for your spouse by transferring assets, such as cash, investments, or property, into the trust. That removes the assets from your taxable estate immediately. Your spouse can serve as a beneficiary and can access the funds if needed during their lifetime. This is particularly useful for retirees who want to shield their assets from the high costs of long-term care or future changes in tax law.

4. Life insurance

Permanent life insurance — either whole or universal life — is a favorite strategy among the wealthy because it passes money to heirs completely income tax-free. To maximize this benefit, high-net-worth families often avoid owning policies directly. Instead, they place them inside an Irrevocable Life Insurance Trust (ILIT). When structured properly, an ILIT keeps the death benefit out of the taxable estate, giving heirs tax-free cash to cover estate duties, debts or living expenses without forcing a fire sale of the family home or core assets.

How to steal it: Use permanent life insurance placed in an Irrevocable Life Insurance Trust (ILIT) to leave tax-free money to heirs while keeping it out of your taxable estate. You can often cover the premiums using your annual gift tax exclusion. In the end, you get to leave behind tax-free money for your family while protecting the assets you've worked so hard to build.

5. Family LLCs

By bundling assets — such as real estate or a family business — into a Family Limited Liability Company (Family LLC), the ultra-rich can transfer non-controlling shares to their heirs over time at a discounted valuation. This strategy lowers the gift's taxable value, preserving more of the owner's lifetime exemption and reducing future estate taxes.

How to steal it: Even with more modest assets, you can set up a Family LLC with the help of an estate planning attorney. But the main point is that anyone can benefit from holding assets in entities like trusts or family LLCs. “Heirs can secure access, enjoyment, and management without direct ownership,” says estate planning attorney Kevin Quinn, President at Legacy Counsellors, PC. “This structure shields wealth from creditors, divorces and lawsuits, while ensuring a structured legacy for future heirs.”

6. TOD and POD designations

Transfer-on-Death (TOD) and Payable-on-Death (POD) designations on brokerage accounts, bank accounts, certificates of deposit (CDs), and even some vehicles allow funds to be transferred directly to a beneficiary upon the account holder's death, bypassing probate. Many people overlook TOD and POD designations in estate planning — but not the wealthy.

How to steal it: Setting up TOD and POD designations on your accounts allows assets to transfer directly to beneficiaries upon your death, bypassing probate. Through your financial institution, you choose your assets, fill out a form and name your intended recipients.

However, because TOD and POD designations supersede instructions in a living trust, they must be carefully coordinated. For the best protection, complex assets like real estate are placed in the trust, while simpler accounts — such as checking, savings or CDs — can name the revocable trust as the TOD or POD beneficiary. This keeps your cash out of probate while ensuring every dollar is distributed according to your estate plan.

7. Roth IRA conversions

It's no surprise that the ultra-wealthy are obsessed with managing future taxes and carefully time their Roth conversions to pay taxes when the rate is lowest, giving their heirs tax-free money down the road.

How to steal it: Ryan Maynard, Managing Partner at Vaquero Private Wealth, offers this advice. “Convert traditional retirement money to a Roth during your low-income years — often the stretch after you stop working but before Social Security and required minimum distributions (RMDs) begin. In those years your taxable income can be unusually low, so you convert at a very low ordinary rate and move that money into a Roth, where it grows and comes out tax-free for the rest of your life and for your heirs.” This strategy works especially well for retirees with smaller nest eggs.

8. Long-term capital gains

The ultra-wealthy value long-term capital gains because they are taxed at much lower rates than ordinary income. By holding investments for more than one year, they can pay significantly less tax on their profits. Besides that, they can afford to hold assets for years or even decades because they don't have to rely on selling them to cover daily living expenses.

How to steal it: Try to hang onto your investments for at least a year before you sell them. You’ll often qualify for the lower long-term capital gains rates, which are usually 0%, 15%, or 20%, instead of getting hit with regular income tax rates. You don't need to be ultra-wealthy to take advantage of this. “It is one of the most valuable breaks in the tax code,” Odgers adds, “and it is not based on your estate size.”

Use the best strategies for you

You don't have to copy the ultra-wealthy exactly. Mixing and matching just a couple of these ideas can make a real difference and protect your savings, cut taxes, and leave more for the people you love.

Trent Von Ahsen, CFP®, and Managing Partner at Cedar Point Capital Partners, offers a final word. “There are clearly some differences, but I do think the biggest misconception about estate planning is that it's only for the ultra-wealthy. Affluent families may use some sophistication. But overall, I'd say the same underlying principles are available to basically anybody."

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If you’ve inherited a house, you’re not alone. Data show that 38% of people in the U.S. report real estate as part of their past or expected inheritance.

But once the deed is in your hands, you’re probably wondering what comes next. Beyond deciding whether to keep it, sell it, or rent it, there’s one almost universal question: What are the tax implications?

There's good news: Inheriting a house doesn’t automatically mean you’ll owe taxes to the IRS or your state. But what happens next depends on several factors, including whether you decide to sell the property and how the step-up in basis affects your tax bill.

Here’s more of what you need to know.

What happens with taxes if you inherit a house

Inheriting a house doesn’t automatically trigger federal taxes. Instead, you’ll need to decide what to do with the property. Whether you sell it, keep it, or turn it into a rental, each option can have different tax implications.

One of the most important tax rules for inherited property is the step-up in basis. A home’s basis is the amount the IRS uses as the starting point for calculating capital gains tax.

Think of the home’s basis like a car’s trip odometer. Resetting the trip odometer doesn’t erase the miles already driven. Instead, it creates a new starting point, tracking only the miles driven from that point forward.

• When you inherit a home, the IRS generally measures your gain from the home’s fair market value on the date of death instead of what the previous owner originally paid.
• The step-up in basis doesn’t change what the house is worth. It changes where the IRS starts measuring your gain.

For example, your parents bought a home decades ago for $150,000. By the time you inherit it, it’s worth $700,000. If you later sell the home for $750,000, your taxable gain would be $50,000, not $600,000.

That’s because your taxable gain is based on the appreciation that occurred after you inherited the home, not when your parents owned it.

Selling, keeping, or renting inherited property

Selling an inherited home is often one of the biggest financial decisions you’ll make after inheriting property. A Real Estate Inheritance Report from Trust & Will finds that 56% of heirs choose to sell an inherited home, making it the most common path forward.

• Fortunately, you won’t pay capital gains tax on the difference between what the original owner paid for the home and its fair market value when you inherited it. Instead, the IRS uses the home’s stepped-up basis as the starting point for calculating your taxable gain.
• That means when you sell, you’ll owe capital gains tax only on any appreciation that occurs after you inherit the home.
• If you sell the home soon after inheriting it for about its fair market value, your taxable gain may be minimal.

What if you decide to keep the house? Keeping an inherited home doesn’t create an immediate federal tax bill. You’ll still be responsible for ongoing costs like property taxes, homeowners insurance, and maintenance. If you eventually decide to sell the home, the stepped-up basis will determine how your capital gains are calculated.

Some beneficiaries—roughly 17%—decide to turn an inherited home into a rental property. If you do, rental income is typically taxable. You may also be able to deduct certain expenses related to the property.

Depending on your situation, you might qualify to claim depreciation, which can affect both your annual taxes and your capital gains calculation if you eventually sell.

Estate and inheritance tax considerations

If you’ve inherited a house, you may also be wondering whether you’ll owe inheritance tax or estate tax.

For most families, the answer is no.

The federal government doesn’t impose an inheritance tax, and only a handful of states do. Furthermore, the federal lifetime estate and gift tax threshold sits at $15 million per individual ($30 million for married couples), meaning it generally applies only to exceptionally large estates.

Whether either tax applies depends on factors like the overall size of the estate, where the deceased lived, and state law.

Where you live matters with inheritance

While federal tax rules dominate the conversation, state-level rules can create unexpected financial surprises. But the baseline rule is the same: Nearly all state tax codes conform to the federal step-up in basis, resetting the property's starting value to its fair market value on the date of death for state capital gains purposes.

However, state rules diverge from IRS rules in several key areas:

State Capital Gains Rates: If you hold the home and sell it after it appreciates further, any post-inheritance gain is subject to state income tax alongside federal capital gains tax.

In high-tax states like California, New York, or Minnesota, state capital gains tax rates can add 8% to 13%+ to your tax bill.

State Inheritance and Estate Taxes: Five states—Pennsylvania, New Jersey, Maryland, Kentucky, and Nebraska—levy a state inheritance tax on certain heirs.

Additionally, twelve states and Washington, D.C. enforce state estate taxes with exemptions far lower than the federal threshold—in places like Oregon or Rhode Island, kicking in on estates valued as low as $1 million or $1.8 million.

Local Property Tax Reassessments: In some jurisdictions, transferring title triggers a local property tax reassessment. The capped property tax rate the previous owner enjoyed could reset to current fair market value, significantly increasing annual holding costs.

Key questions to consider before making a decision

Before deciding whether to sell, keep, or rent an inherited home, take time to evaluate a few financial factors:

• What is the home’s official stepped-up valuation? Securing a professional, independent appraisal as of the date of death establishes your baseline basis and protects you if you sell later.
• Can you afford the ongoing carrying costs? If you plan to keep the home, calculate the true cost of holding it — including updated local property taxes, insurance premiums, utilities, and deferred maintenance.
• Are there co-heirs or sibling dynamics to navigate? If you inherit with siblings, clarify whether everyone agrees on selling or keeping the property, or if one party needs to buy out the others.
• What are the local property tax reassessment rules? Check with the local tax assessor to see if transferring title triggers an immediate tax reassessment that could increase annual property taxes.

Inheriting a home: Frequently asked questions

Tax laws are complex, and every beneficiary's tax situation is unique. The information provided here is for general educational and informational purposes only and does not constitute formal tax, financial, or legal advice. Be sure to consult a qualified tax professional, CPA, or estate planner to evaluate your specific circumstances before making any financial decisions.

Do you automatically pay taxes when you inherit a house?

No. Inheriting a house by itself won’t trigger federal taxes. Taxes may arise later depending on what you do with the property.

Can you sell an inherited house immediately?

Generally, yes. Many beneficiaries sell an inherited home shortly after probate or once they have the legal authority to do so. However, the timing depends on the estate administration process and state law, so consult a trusted professional to understand any timing restrictions that may apply to your situation.

How is capital gains tax calculated on an inherited house?

In many cases, capital gains are calculated using the stepped-up basis, meaning the home’s fair market value on the date of death becomes the starting point for measuring future gain.

What if I inherit a house with my siblings?

If you inherit a house with your siblings, you may become co-owners of the property. Together, you’ll need to decide whether to keep the home, sell it, or rent it out. If you sell the home, each beneficiary’s share of any capital gain is based on their ownership interest and the home’s stepped-up basis.

Can I live in an inherited house without paying taxes?

Usually, yes. Moving into an inherited home doesn’t automatically create a federal tax bill. However, you’ll likely become responsible for ongoing expenses like property taxes, homeowners insurance, and maintenance.

If you later sell the home, your taxes will depend on the selling price and your stepped-up basis.

What if the house was held in a trust?

It depends on the type of trust. Many homes held in a revocable living trust receive the same step-up in basis as homes passed through a will.

Some trusts, however, have different tax rules that can affect your tax situation. If you’re unsure how the trust is structured, consider consulting a tax professional before selling the property.

Do I have to pay property taxes on an inherited house?

Yes. Once you inherit a home, you’ll typically become responsible for ongoing property taxes, just as any other homeowner would be. Depending on where the property is located, you may also need to update or reapply for property tax exemptions after ownership changes.

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Passing down your life savings shouldn't require surrendering thousands of dollars to court fees and probate lawyers. Yet every year, millions of families watch their inheritances chipped away by those costs.

To bypass the costly court process, some households turn to a trust.

It sounds simple enough — until you look at the price tag. With trust setup costs routinely running into the thousands, plus a dizzying choice between revocable and irrevocable options, it's easy to wonder:

Is a trust worth the headache, or is a basic will enough?

The short answer: it depends.

While an irrevocable trust can shield your wealth from taxes and nursing home costs, its legal complexity and ongoing maintenance fees might not suit your family.

On the other hand, a revocable trust can spare your kids the nightmare of probate court, but paying higher setup costs upfront doesn't always guarantee a net payoff for smaller inheritances.

We'll break down the differences between wills and trusts, what each really costs, why your state's laws change the math and how to choose the option that leaves the most money for your heirs.

Wills vs revocable and irrevocable trusts: Key differences

Before we dive into the numbers, let's start with the structural differences between a standard will, a revocable trust and an irrevocable trust.

Key differences are highlighted in the table below.

*Changes might be made easier by an independent trustee through a process of "decanting" — pouring assets from an old trust to a new one with approval — if your state allows.

**However, if you have a "grantor trust," the creator of the trust still pays the taxes on their personal return, thus potentially saving some money.

As you can see from the table, one of the general main advantages of a fully funded trust is skipping probate court.

• This can save your heirs time, keep legal filings private and prevent your personal estate details from entering public record.
• In addition to these benefits, an irrevocable trust removes assets from your taxable gross estate, shielding wealth from transfer taxes and potential creditors.
• If you anticipate needing long-term care (e.g., a nursing home), an irrevocable trust (such as a Medicaid Asset Protection Trust) can safeguard your savings while helping you qualify for government assistance, provided it's established well outside Medicaid's look-back window.

All those advantages come with one big disadvantage: Higher upfront costs.

You'll typically pay higher legal and accounting fees to set up your trust than you would for a standard will. The key question for most families is whether paying those higher fees today will save their heirs enough in court costs and taxes down the road to make the investment worthwhile.

How much do wills and trusts really cost you?

From a purely financial standpoint, the cost-benefit analysis of a trust hinges on location, estate complexity and overall asset value.

For instance, an estate that passes through a standard will might undergo probate for some or all its assets. Probate expenses (court and attorney fees and filing costs) generally run 3% to 8% of the probate estate's gross value, according to industry-wide averages.

But if your assets pass automatically through joint ownership or designated beneficiaries (such a 401(k) or IRA), probate might be minimal or bypassed entirely.

Below is a cost comparison showing what you might pay today vs what your heirs could pay later if you chose a will vs a trust. The data is compiled from nationwide legal surveys, consumer finance benchmarks and historical probate data.

Note: The table utilizes national averages for probate and administrative costs, not estate tax rates. Exact numbers vary depending on your geographic location, state laws, attorney rates and complexity of assets.

Households who opt for a revocable trust might do so to pay a larger amount upfront today to help save their kids from paying thousands in probate fees decades later.

But the savings aren't quite as high as you might think. Consider these facts, assuming a standard 2.5% to 3% long-term inflation rate, and an estate worth roughly $300,000 to $400,000.

• If a revocable trust saves your kids $15,000 in probate fees 30 years from now, those future savings might only be worth roughly $6,000 to $7,000 in today's dollars.
• If you paid $2,000 in setup costs today to save a net $5,000 in inflation-adjusted dollars down the road, it's still a win — but it's not the huge $13,000 windfall it would appear to be on paper.
• Whether those net savings of $5,000 justify the upfront effort and expense depends on your family’s priorities, estate complexity, and location.

Why where you live matters

Federal estate taxes typically only apply to very high-net-worth individuals ($15 million per person in 2026). However, individual state laws can dramatically alter the math for average-income families.

First, a handful of states impose their own estate or inheritance taxes with much lower thresholds. Second — and more commonly — probate fees, legal mandates, and court procedures vary widely from state to state.

That's why where you live (and die) matters to your heirs.

To see how this works, consider the following scenario.

A parent passes away, leaving $100,000 in non-real-estate probate assets to a child serving as an executor. In one scenario, the parent lived in Florida. In another, they lived in Missouri.

Note: The example provided represents averages and is not indicative of a particular taxpayer's financial situation.

In the table, the heir can save $3,355 more in Florida compared with Missouri. Why? There's a specific state rule about inherited personal property in the Show-Me State.

Under Missouri law, the threshold to file a simplified small estate return is capped at $40,000. That means the heir is forced into a standard, full court-supervised administration (the $3,300 in attorney fees).

Conversely, Florida allows a $100,000 estate to bypass the traditional court-supervised administration via Summary Administration (which applies to nonexempt personal assets up to $150,000 and exempt primary homestead property), meaning the heir can avoid formal executor appointments and ongoing court oversight entirely.

Meanwhile, in higher-cost states such as California or New York, statutory attorney fees and executor commissions can push probate expenses significantly higher, making revocable trusts far more attractive than standard wills in those states.

Do tax benefits outweigh the setup costs?

It depends entirely on your estate size and which type of trust you choose.

Revocable trusts vs wills.
A revocable trust or a standard will offers no direct income tax savings during your lifetime (beyond basic inheritance tax rules). Any income generated by assets inside either flows to your personal tax return (Form 1040) using your standard individual tax brackets.

From an annual tax perspective, a revocable trust and a standard will are treated almost identically. Don't expect to recoup your upfront setup costs through annual tax savings; they simply don't exist for wills and revocable trusts.

Irrevocable trusts.
An irrevocable trust offers structural estate tax savings by removing assets from your taxable personal estate. However, that benefit comes with two important annual tax trade-offs:

• Compressed tax brackets. If an irrevocable trust retains income rather than distributing it to beneficiaries, that income might be subject to the top federal tax bracket at much lower thresholds than an individual return. As a result, maintaining an irrevocable trust (non-grantor) can actually lead to higher annual taxes, even if it lowers the overall tax burden for your heirs when you pass away.
• Recurring maintenance costs. Because trust assets are legally separate from your estate, you must file a separate annual fiduciary tax return (Form 1041). This adds recurring accounting expenses every year.

Typically, irrevocable trusts make the most financial sense if your total net worth exceeds the federal estate exemption (over $15 million in 2026), if you live in a state with high death taxes, or if you need to protect assets from creditors or long-term care costs. In those specific scenarios, the long-term tax and asset protections can outweigh the setup and maintenance fees.

How to save your kids the most money

Ultimately, whether a trust or a will saves your kids the most money depends on high-end estate and gift taxes, as well as how you want to approach probate.

Here are a few sample scenarios outlining when a will vs a trust could be more beneficial for you or your heirs:

However, these scenarios don't cover every person's unique financial situation. Before deciding, review your state’s specific inheritance and probate rules, take inventory of how your accounts are titled, and consult a qualified estate planning attorney or tax professional.

This article does not cover state income tax and is for educational purposes only. The content does not constitute financial, legal, or tax advice.

Read More

• How Your Inheritance Gets Taxed: From Stepped-Up Basis to IRA Rules
• Avoiding the Widows' Penalty Tax Trap After a Spouse Passes
• States That Won't Tax Your Death
• Estate Tax vs Inheritance Tax: Who Actually Pays the Bill?