Hitting milestone birthdays in your 50s, 60s and 70s brings far more than just celebrations — it unlocks major financial opportunities and introduces strict federal deadlines. From penalty-free 401(k) access at age 59½ to Social Security claiming choices and Medicare enrollment windows, timing your moves correctly is essential to preserving your nest egg

Test your knowledge of key birthday milestones to see if your understanding is as solid as it needs to be. Don't worry if you miss an answer; you can follow the links below the quiz to learn more about the importance of key ages.

More on retirement milestones, from the Kiplinger retirement team:

• The 9 Key Milestone Ages in Retirement
• Turning 65 This Year? Here Are 10 Key Things To Know
• The 7-Month Deadline That Determines Your Lifetime Medicare Premiums
• When To Take Social Security Payments: Your Age Matters
• What's My Social Security Full Retirement Age (FRA)?
• How to Calculate RMDs (Required Minimum Distributions) for IRAs
• The New 401(k) Mandate: Why a Forced Roth Could Be a Boon for Your Retirement

When Mike and Liz retired at age 63, they were looking forward to finally having an easy tax return. No more working meant no more worrying whether their company withheld enough taxes on their incentive plan payouts and stock vesting.

They'd hit their "retirement number" and had almost $2 million saved, much of it within traditional IRAs and 401(k)s. Required minimum distributions (RMDs) from these accounts were still more than a decade away.

Their initial plan was to live off their savings as well as withdrawals from their brokerage accounts until they took their Social Security benefits at the maximum amount at age 70.

So, when Mike and Liz came into my office for our quarterly meeting, they were quite surprised when I suggested that they make a sizable, taxable Roth conversion from their traditional IRA.

Liz asked, "Why would we voluntarily pay more taxes right now when our income is finally so low?"

I answered, "Because this may be the lowest tax rate you see for the rest of your retirement. It could be a once-in-a-lifetime planning opportunity."

Mike and Liz are in their "golden tax planning window" — the time between when you retire and when your RMDs start at 73 (or 75).

This is when the tax planning focus should shift from, "How do I enjoy a low tax rate today?" to, "How do I use this low-tax-year opportunity to create a strategy that could lower my lifetime taxes?'

What is the golden tax planning window?

The golden tax planning window is usually the period between when you stop receiving a paycheck and when you start receiving significant taxable retirement income.

For many retirees, this starts the year they retire and ends when they start taking Social Security, collecting a pension, or reach RMD age.

Not everyone has the same window, and you can't time it around your age alone. Some retirees might only have one or two years before a taxable income source kicks in. Others might have five to 10 years.

And if you have a large pension, deferred compensation payouts, passive income from owning a business or renting a property, or significant capital gains, you might not get a golden window at all.

Why Roth conversions are often recommended

While they were working, Mike and Liz were focused on lowering their current year's taxes through contributions to traditional IRAs and 401(k)s.

Entering retirement, they heard of Roth conversions but initially dismissed them because of two thoughts they had that many of their fellow retirees share:

• "I can't Roth convert. I don't have any income."
• "My account balances are so large. The conversion tax bill would be huge."

Yes, once you stop working, you may no longer have the taxable compensation needed to make a regular Roth IRA contribution. But you can still convert traditional IRA money to a Roth IRA, without earned income or contribution limits.

And Roth conversions don't involve the entire account. You can choose the amount you'd like to convert — from one penny up to the maximum amount within the account that's eligible to convert.

Which is why I believe the golden rule of Roth conversions is:

Choose the right year and the right amount of Roth conversions.

Roth conversions are often recommended when the tax rate you expect to pay on a conversion today is lower than the projected tax rate on traditional retirement account withdrawals in the future.

Your golden window helps you identify the right years to make the conversion and the right amount to convert in each of those years.

How to identify your golden tax planning window

Once you stop working, your monthly paycheck disappears. Your annual bonuses or stock compensation goes away.

That drop in income often creates an opening in the lower tax brackets to convert money from your traditional retirement accounts into a Roth IRA at a low tax rate.

You have the opportunity to report income from your traditional retirement accounts, during this time frame, at a current rate that may be lower than your projected future withdrawal tax rates.

This opportunity doesn't last forever. As your expected retirement income sources like pensions and Social Security start, your tax planning window starts to close.

If you're still in a relatively low tax bracket when you reach RMD age, this often signals the end of your golden tax planning window. The added taxable income from RMDs can often make more of your Social Security taxable, creating a higher tax cost than expected.

Another life transition that often signals the end of the golden tax planning window is the death of a spouse.

When the first person dies, the surviving spouse moves from the wider "married filing jointly" tax brackets to the much narrower "single filer" tax brackets. But the household's annual taxable income doesn't usually get cut in half like the brackets and standard deductions do.

Within the narrower single filer category, the widow's income can more easily reach the higher tax brackets, creating a tax hit called the "widow's penalty." While unpleasant to think about, this change in tax situation should be a key piece of proactive planning.

Finding the right Roth conversion amount

Once I'd explained to Mike and Liz the scale of the opportunity in front of them, they agreed that they should take advantage of their golden window.

"Let's do it! Should we convert our whole nest egg right now?" asked Mike.

"Not yet," I told them. "We need to look at each part of your retirement planning first, not just your tax picture."

Taxes are an important part of your retirement planning — but they are just a part of the whole picture. You need to coordinate your decisions on how much to spend in retirement, how to take Social Security and pensions, how to plan your taxes, how to invest and how to set up your estate plan.

I call the process of coordinating your retirement decisions your Retirement Master Plan. I share how to follow this process in five simple steps in my book Retire Today.

For Mike and Liz, we decided together when each of them would take Social Security. Then we mapped out their future tax situations in each year of their expected 30-year retirement.

Once they could see their projected tax rates each year, they could find the years when their tax rates were expected to be higher and lower.

For them, their marginal tax rates were projected to increase when they started their RMDs. They saw the rates projecting lower in the years before they were both claiming Social Security.

They were then able to determine how much to target for Roth conversions, when to do them and how best to pay the tax withholding for each year.

How to take advantage of your golden tax planning window

Mike and Liz spent decades planning how much they could put into their retirement accounts every month.

When they hit retirement, they thought the hard work had ended.

Thankfully, they discovered in time that the beginning of retirement is often the beginning of a golden tax planning window.

It's the time to think ahead and decide how you can intentionally pay taxes, through Roth conversions, to potentially manage your projected lifetime tax liability.

When you hit retirement, don't just push off your tax decisions until RMD time.

Project your taxes now and at each big change in your financial situation, such as starting Social Security, starting a pension and starting your RMDs.

Find out whether your golden tax planning window is open, how long it may stay open and how much of it you could use for Roth conversions each year — before that opportunity closes.

Related Content

• 8 Retirement Tax Strategies Your CPA Won't Tell You
• I'm a Financial Planner: If You're Converting to a Roth IRA, Don't Do It Like This
• Claiming Social Security Soon? 5 Smart Moves to Make Before You File
• Retiring in the Next 12 Months? Answer These 3 Questions Before Your Paycheck Stops
• 5 RMD Mistakes That Could Cost You Big-Time: Even Seasoned Retirees Slip Up

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.

529 savings accounts are a popular way for grandparents to help pay for education. Contributions to 529 accounts are treated as gifts to the beneficiary, and many states give residents who fund accounts in that state a deduction or credit on state tax returns. Distributions from 529 plans used for college, post-secondary credentialing programs and certain apprenticeship programs are tax-free.

And 529 accounts aren’t just for college. They can also help pay for K-12 education. Tax-free distributions of up to $20,000 per year per beneficiary can be taken from 529 accounts to pay tuition for elementary and secondary school. This amount can now also help cover the costs of materials for curricula and online studying, books, educational tutoring, fees for advanced placement tests or college admission exams, and educational therapies performed by licensed providers to students with disabilities.

The $20,000 annual limit doesn’t apply to 529 distributions used to pay for college, postsecondary credentialing programs or apprenticeship programs. Tax-free 529 payouts cannot be made to cover homeschooling expenses. You should know that not all states treat payouts for K-12 schooling as tax-free for state tax purposes, so be sure to check your state’s tax laws.

Leftover funds

What if the beneficiary decides to skip college? Or money is left in the 529 account after the beneficiary has completed school? You can always withdraw it and use the money for purposes other than education, but you will owe regular income tax and a 10% additional penalty tax on the withdrawn earnings.

There are several tax-saving options for handling unused 529 funds. For instance, under the federal tax laws, some 529 funds can be transferred tax-free to a Roth IRA for the 529 beneficiary in a direct trustee-to-trustee transfer. This relief, enacted under the 2022 SECURE 2.0 Act, is subject to important rules. The 529 account must have been open for at least 15 years, with the same beneficiary. There is a $35,000 lifetime cap on such transfers. 529 contributions made in the prior five years are ineligible for the transfer. And the amount of 529 funds transferred to the beneficiary’s Roth IRA in a year can’t exceed the annual contribution limit for Roth IRAs, which is $7,500 in 2026.

Note that any actual contributions made to any IRA owned by the beneficiary count against this limit. For example, let’s say a 529 account beneficiary contributes $3,000 to his traditional IRA in 2026. Only $4,500 of 529 funds can be transferred to his Roth IRA for 2026.

And if the beneficiary has already maxed out IRA contributions in a year, then no 529 funds can be transferred to a Roth IRA for that year.

There are a few other tax-saving options for dealing with excess 529 funds. You can keep the money in the 529 account in the event the beneficiary later decides to attend graduate school, participate in an apprenticeship program or enroll in a postsecondary credentialing program. Leftover funds can be rolled over from a beneficiary’s account to an ABLE account for a disabled beneficiary or the beneficiary’s disabled siblings.

Alternatively, you can roll over leftover funds to a 529 account set up for another family member, such as a sibling or parent. You can also use up to $10,000 to help pay off the beneficiary’s college debt (this $10,000 is a lifetime limit, not an annual limit).

Have a tax question? Write askkiplinger@futurenet.com.

Joy Taylor, the Kiplinger Tax Letter editor, will reply and, with your permission, choose a few queries for our online “Ask the Editor” feature. For past questions and answers go to www.kiplinger.com/tag/ask-the-editor.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that's right on the money.

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Most people treat their Medicare supplement plan the way they treat a landline: It's something they sign up for once, at 65, and never think about again.

That instinct might make sense for other types of insurance. But it's the wrong instinct when it comes to your supplement plan, and it can cost you hundreds of dollars a year, sometimes for a decade or more, without you noticing.

The part nobody expects: Identical coverage, different price

Here's what most people don't know about Medicare supplement, or Medigap, plans: They're standardized by the federal government. A Plan G from one insurance company covers exactly the same things as a Plan G from every other insurance company selling in your state. Same benefits, same rules, no exceptions.

The only thing that changes from carrier to carrier is the premium, and that gap is often much bigger than people expect. It's common to see one company quoting around $140 a month for a Plan G in a given ZIP code, while another quotes $240 for identical coverage.

If you live in Massachusetts, Minnesota or Wisconsin, your state uses its own Medigap plan structure instead of the lettered system, but the same principle applies: Compare identical coverage across carriers.

That difference isn't a mistake in the system. It's simply how a heavily regulated product still leaves room for companies to compete on price. Once you understand that the benefits can't differ, price becomes the only variable worth comparing.

If it helps to see the price comparison laid out visually, this video walks through a similar rate check, including how identical Plan G quotes can vary by $100 or more depending on the carrier.

Why the same plan gets more expensive every year you ignore it

Insurance companies tend to price Medigap plans competitively when they're trying to attract new customers, then raise those rates gradually in years two, three and four.

Meanwhile, a different, equally reputable company may be offering the exact coverage you already have at close to what you originally paid. The result is a slow drift where loyal customers end up paying the most for the same benefits, simply by not looking elsewhere.

Consider this scenario based on real-life patterns I often see in my practice: Carol enrolled in a Plan G at 65 for $150 a month and never revisited it. Eight years later, she was paying $310 a month for the same coverage, on the same plan letter, that a different company was now selling to new customers for $165.

Nothing about her benefits had changed. What had changed was the price she was willing to keep paying without checking.

The catch: You need to shop while you're still healthy

Here's the part that makes this more than a simple money-saving tip. When you first become eligible for Medicare, you get a six-month Medigap open enrollment window where you can buy any plan, from any company, regardless of your health.

Once that window closes, switching companies generally means answering health questions. Depending on your answers, you can be charged more or declined altogether.

Several states (including New York, Connecticut, Massachusetts and others with "birthday rule" laws) require little or no underwriting to switch, but check with your State Health Insurance Assistance Program (SHIP) to see your state's specific rules before assuming this applies to you.

That's the trap in Carol's story. The money was there to be saved every year she waited, but the ability to make the switch wasn't guaranteed to still be there when she finally looked. The right time to compare pricing isn't when you're sick and need to. It's now, while you still qualify for whichever plan turns out to be the better deal.

The piece that isn't standardized: Part D

If you go the Medicare supplement route, prescription drug coverage isn't included. You'll need a separate Part D plan, and unlike Medigap, these plans aren't standardized.

Premiums, deductibles and which medications are covered can vary significantly and can change from one year to the next, even if you don't change anything yourself. This is worth reviewing every single year, not every few years, during the annual enrollment window that runs from October 15 through December 7.

Even people who aren't currently taking any medications are better off enrolling in a Part D plan rather than skipping it. Going without one, if you don't have other qualifying drug coverage, can trigger a penalty that gets added to your premium for as long as you're on Medicare.

What to do this fall

You don't need to wait until something feels wrong with your current plan to check whether it's still the right price.

Pull your current Medigap premium and compare it against current rates for the same lettered plan from other carriers licensed in your state, not just your existing company.

Do this while you're healthy. If your health has changed since you last shopped, ask an independent agent what your options are before assuming you can switch freely.

Mark October 15 through December 7 on your calendar every year, and use that window to review your Part D or Medicare Advantage plan, even if last year's plan still feels fine.

The takeaway

Medicare isn't a decision you make once at 65 and close the book on. Your health changes, insurance pricing changes, and the marketplace shifts every year whether you're paying attention or not.

Reviewing your coverage every two to four years, and your Part D plan every single year, can mean meaningful savings without giving up a single benefit. The only real risk is waiting too long to look.

Related Content

• The '100% Overwhelming' Decision: What Do You Do About Medigap?
• How Medigap Insurance Is Affected by Preexisting Conditions
• Watch Out for the ‘Medigap Trap’
• 11 Costly Medicare Mistakes You Should Avoid Making
• The Social Security Number Most Couples Never Calculate (and Should)

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.

When drafting an estate plan, many people treat choosing an executor as a sentimental decision — a way to show trust or single out a reliable loved one. But serving as a personal representative is far more than a gesture of respect; it is a demanding, multi-year administrative and financial job. From navigating probate courts and liquidating real estate to settling final tax liabilities and resolving family tensions, an executor carries real legal responsibility during a time of grief.

To ensure your estate is settled smoothly and your legacy is protected, you need a clear strategy to identify, evaluate and formalize the right choice before you sign your legal documents. "When you name someone as executor, you may effectively be giving them a second job they never applied for," David Haughton, vice president of estate planning at Carson Group, told Kiplinger.

Here are six steps to help you choose the right person (or people) to be your executor.

1. Understand the scope of duties

Ensure you know what you are asking someone to take on. An executor manages probate, locates and values assets, settles debts, files final federal and state tax returns and distributes remaining assets to beneficiaries. The role requires meticulous record-keeping and the ability to deal with court timelines and administrative friction. Understanding what the job entails will help you select the right person.

"I think what surprises executors most is how much more is expected from them beyond simply distributing assets," said Haughton. "It can be a significant time commitment, and the executor is expected to follow the documents and act in the estate’s best interest, even when the family’s expectations differ."

State law typically allows executors to claim reasonable fees paid from the estate. You should decide whether you want to specify compensation terms in your will or default to the statutory amount.

2. Identify potential candidates

Consider both personal contacts and professional options. When selecting an executor, you generally have three choices: A personal representative, such as a family member or friend; a corporate executor; or co-executors.

Because executors face personal liability for fiduciary errors or premature distributions, candidate selection must prioritize capability over sentimentality. Haughton advises that "you want someone who is organized, dependable, financially responsible and able to communicate calmly."

Potential red flags? He said someone with "unresolved family conflict, poor financial judgment or someone whose own circumstances may get in the way" would not be a good candidate.

Most people choose family members due to deep mutual trust and shared personal history. Often, the oldest child will be selected. However, Haughton stresses that just because a child is the firstborn doesn't mean they are necessarily a good fit for the role of executor.

Co-executors within families: Naming two people to act together — for example, two siblings — can lead to administrative deadlocks and delays unless they work exceptionally well together. A trusted friend might offer a layer of separation while maintaining a personal connection to your wishes.

Co-executors, personal and professional: Appoint a trusted friend/family member and a corporate fiduciary to act jointly. The personal representative provides insights into family wishes, while the institution manages the administrative heavy lifting. Read more about corporate executors below.

The hybrid alternative: Co-executors or directed fiduciaries

If you want the personal touch of a loved one combined with the legal weight of a professional, you do not have to choose strictly between the two. While family members often serve out of love and obligation, a professional brings fiduciary expertise, objectivity and operational continuity.

Appointing a corporate executor, including banks, trust companies and estate attorneys, is ideal for large, complex estates, business transfers or situations where family conflict is likely.

Most importantly, Haughton said that there should be a "reason to have both." He points out that it "can be a good thing when you want checks and balances or different perspectives, but it can also slow down decisions and create disagreements."

You should consider including a corporate executor under these circumstances:

• High potential for family conflict. Sibling rivalry blended families, disinheritance and unequal inheritances.
• Complex financial structures and high net worth. Tax exposure, illiquid/diverse assets and ongoing trusts.
• Closely held businesses or active operations. Managing or selling a family business upon the owner's death requires specialized business continuity expertise.

3. Evaluate essential traits and possible constraints

Assess candidates against the practical needs of your estate. Your executor must meet the specific criteria of the state where you live, but general requirements across state lines typically include age, citizenship, residency and legal capacity. Additionally, a felony conviction is often a disqualifying factor.

Be sure that your choice is at least 18 years old, of sound mind — that is not judged incapacitated by a court — and lives in-state. Out-of-state executors are often allowed if they appoint an in-state agent or post a bond.

Here are some factors to consider when choosing a family member or friend to serve as an executor:

• Location and proximity: A local executor can more easily inventory physical assets, handle mail and attend probate court hearings.
• Financial competence: They do not need to be a CPA or attorney, but they must be comfortable hiring professionals and managing accounts.
• Emotional neutrality: Choose someone who can remain objective and fair if family tensions or beneficiary disputes arise.
• Age and health: Ensure the candidate is likely to have the cognitive and physical capability to serve when needed.

4. Have a candid discussion before naming the executor

Never surprise someone with an executor designation. Sit down with your chosen candidate to outline your expectations, the general structure of your assets and where documents are stored.

Confirm they are willing and ready to accept the fiduciary responsibility. Serving as an executor is voluntary, and a court cannot compel someone to serve if they renounce the appointment.

Schedule a dedicated conversation to outline your estate's structure, the types of assets involved, and the general complexity they will encounter. Be transparent about your intentions regarding asset distribution — especially if your plan includes trusts, unequal inheritances, or specific conditions — so your candidate understands the interpersonal environment they will step into.

This conversation gives your chosen candidate a clear, pressure-free opportunity to accept the role or respectfully decline.

5. Designate a successor executor

Always establish a backup option. Life circumstances change. Name at least one alternate executor in case your primary choice predeceases you, becomes incapacitated, or declines to act when the time comes.

• The primary alternative: Name at least one primary successor executor in your will. If your primary choice predeceases you, suffers cognitive decline, moves abroad or resigns when the time comes, the court automatically appoints the successor without requiring a lengthy court hearing.
• Tiered succession and corporate backstop: For long-term security, name a named individual as primary, a secondary individual as first alternate, and an institutional trust company as the final contingent backstop. This prevents the court from having to appoint an unknown administrator of its own choosing.

6. Formalize the appointment and create an accessible operational plan

Make the choice legally binding. Your choice of executor carries no legal authority until it is properly executed in a valid last will and confirmed by the probate court following your death.

Work with a qualified estate planning attorney to draft your will, ensuring it explicitly grants your executor the necessary authority to handle some decisions, such as the authority to sell real estate, manage digital assets and retain legal or financial counsel without requiring prior court approval for every transaction.

Include specific language waiving executor bond requirements if you trust your candidate implicitly, which saves the estate thousands of dollars in premium fees. Finally, store your original signed documents safely and give your executor clear instructions on where to access your will, account inventories and essential property keys when needed.

Use your head, not your heart

Ultimately, the best executor for your estate is not necessarily the relative you feel closest to, but the person most qualified to handle the legal weight, administrative burden and interpersonal dynamics of the role. "People spend a lot of time thinking about who they trust and sometimes not enough time thinking about what they’re asking that person to do," Haughton cautioned.

Taking the time to evaluate candidates objectively, discuss your expectations openly and formalize clear primary and successor choices will save your heirs immeasurable stress and cost down the road.

Once you've made your selections, review your designations every few years or after major life changes to ensure your estate plan stays aligned with your wishes and ready for the future.

Related content

• Is Your Estate at Risk? The 5 Trusts You Need to Understand
• Probate: The Terrible, Horrible, No Good, Very Bad Side of Estate Planning
• Why Leaving an Equal Inheritance to Your Children Could Backfire

In the coming years, older generations — primarily baby boomers — are expected to pass tens of trillions of dollars to their heirs in what's colloquially known as the "Great Wealth Transfer." But cash and stock portfolios aren't the only assets changing hands.

A recent Kiplinger survey found that real estate accounts for about one-third of everything parents expect to leave behind.*

Yet, as houses are passed to the next generation, a surprising amount of uncertainty surrounds what happens next. The same study revealed that 43% of parents and 33% of heirs are left guessing about potential tax bills.

On the surface, inheriting a home comes with significant tax advantages designed to protect against capital gains tax — most notably, the "stepped-up basis" rule. Securing that protection often requires an accurate baseline value, whether through a date-of-death valuation or a retrospective appraisal.

By understanding how tax authorities calculate true property value, where the hidden pitfalls lie and discussing the future with your family, you can safeguard both your financial legacy and their peace of mind.

*Note: Conducted by Morning Consult on behalf of Kiplinger, this survey included more than 5,100 adults age 25 and older. All adult child respondents had at least one living parent, and all parent respondents had at least one child age 18 or older.

How the IRS values an inherited home

When passing a house to the next generation, a home's tax basis typically resets to the property's fair market value (FMV) as of the owner's date of death.

Because the baseline "steps up" to this new standard, heirs who sell the home shortly after inheriting it usually owe little to no federal capital gains tax.

However, whether heirs sell immediately, rent the property or wait years to sell, documenting the home's date-of-death value is essential to claim the stepped-up basis on future tax returns. (If an estate has a federal tax return, executors might be allowed to value the house six months after the date of death).

Unfortunately, when reporting a property's value on tax returns or estate disclosures, families can make the mistake of using one of two incorrect methods:

1. Property tax assessments. Local assessors determine values for property tax purposes, often using automated algorithms, valuation caps, or (at worst) outdated information. Because these figures are usually significantly lower than actual market value, using them might shrink your home's taxable baseline — exposing your heirs to unnecessary capital gains tax rates if they eventually sell.
2. Comparative market analyses (CMAs). A real estate agent's opinion or online estimate offers a helpful starting point for listing a home, but it lacks the formal, standardized methodology that federal tax law requires. As a result, the figure provided might not withstand IRS scrutiny.

To establish an official stepped-up basis for a property you plan to hold, rent or keep long-term, the general IRS "gold standard" requires a formal, qualified appraisal conducted by a licensed or certified real estate appraiser who specializes in retroactive "date-of-death" valuations.

What should an inherited home appraisal look like?

From the IRS point of view, a perfect appraisal occurs on the day of death. In reality, estate administration, probate and the natural grieving process mean months — or years — can elapse before anyone addresses the tax baseline.

That's where a retrospective (or retroactive) appraisal comes in.

Qualified appraisers can evaluate the home today and use historical market data, past comparable sales and public records to determine what the property was worth on a specific past date.

For the IRS to accept the report, the valuation must meet specific criteria:

• Professional credentials. A qualified appraiser with a recognized professional designation and verifiable real estate experience. The valuation must also adhere to the core principles and substance of the Uniform Standards of Professional Appraisal Practice (USPAP®).
• Detailed scope. The report should include specific important information, such as the exact valuation date, localized market comparisons leading up to that date and an analysis of the home's physical condition at the time.
• As-is condition. Reflects whether the property was pristine, outdated or in need of repair. Ideally, the home should not be renovated, repaired or staged before the appraiser documents its baseline state to ensure an accurate date-of-death valuation.

Formal inherited home appraisals typically range from $500 to $1,500 and might vary depending on such factors as area, size or property complexity, according to industry cost guides. Compared with potential tax liabilities and penalties, this can be a modest investment in protecting your estate (more on those later).

Quick sales of inherited homes

Do you always need a retrospective appraisal? No.

For heirs selling an inherited property within a six- to 12-month window in an open-market, arm’s-length transaction, the IRS and the U.S. tax court frequently accept the actual closing price as strong evidence of the date-of-death fair market value.

• This might make a separate date-of-death appraisal unnecessary for federal tax reporting, provided that local market conditions remained stable and no material alterations were made to the property during that time.
• If your heirs must file an estate tax return, tax experts generally recommend obtaining a formal retrospective appraisal to establish a stepped-up basis.
• A formal appraisal is often required to complete local probate court inventories. It could also serve as vital, objective documentation to protect the heirs if the IRS audits the tax basis or if beneficiaries dispute the asset's value.

Related: The Estate Tax Exemption Amount for 2026

The cost of an improper valuation

If the IRS audits an estate or personal tax return and finds an unverified or inflated property basis (resulting in a tax underpayment exceeding $5,000), the financial consequences for heirs can be steep.

Beyond paying back the original capital gains tax, the IRS imposes accuracy-related penalties:

• A 20% substantial valuation misstatement penalty. Applied to the tax underpayment if the reported basis is 150% or more of the actual FMV.
• A 40% gross valuation misstatement penalty. Doubled if the claimed basis is 200% or more of the true market value.
• A 20% consistency penalty. Applied automatically if a larger estate files a federal estate tax return, and an heir claims a higher basis on their individual tax return than what the estate declared.
• Compounding interest. Applied retroactively to both back taxes and penalties from the original tax filing due date.

Note on stacking: The IRS does not stack these three penalties on top of each other for the same pool of money; usually, the federal tax agency applies the single highest applicable rate (capped at 40% for a gross misstatement) plus the compounding interest.

Starting the conversation today

Discussing estate plans can feel daunting. The Kiplinger survey shows that talking about inheritance ranks among the most uncomfortable topics for both parents and heirs — more than politics and even end-of-life wishes.

But approaching the conversation thoughtfully today might help remove confusion during what will likely be an emotionally tumultuous time.

Here are a few steps to take now to ease the process of passing down an inherited home:

• Identify a certified appraiser. If your heirs plan to keep or rent the home, research reputable, state-certified appraisal firms in your area so your heirs have a trusted professional to call when the time comes.
• Organize household records. Maintain a designated folder with home improvement receipts, closing documents and property deeds. Remind heirs to keep records of appraisal fees and closing costs. These documents might help prove the home's tax basis (repairs generally do not add to the basis).
• Clarify the taxes. Many heirs incorrectly assume inheriting a house triggers an immediate, overwhelming tax bill. Explaining how the stepped-up basis works — and how you're setting them up to use it — can help them understand the financial picture more clearly.

By taking these small steps today, you do far more than shield your children from tax headaches and audit risks — you give them space to process their grief without the weight of financial uncertainty.

Estate planning is ultimately an act of care, and properly protecting your home’s value ensures your legacy remains the true gift you intended it to be.

This article does not cover state income tax and is for educational purposes only. The content does not constitute financial, legal, or tax advice. Talk to a trusted tax professional when necessary.

Read More

• About 40% of Heirs Say They Can’t Afford an Inherited Home
• How Inheritance Actually Gets Taxed: From Stepped-Up Basis to IRA Rules
• States That Won't Tax Your Death

The "Great Wealth Transfer" is shifting trillions of dollars between generations, but for many families, it is sparking a silent crisis. Despite the high stakes, inheritance remains a taboo subject — often more difficult to discuss than even dating.

This silence carries a heavy price: It opens the door to misunderstandings that can fracture sibling relationships during times of grief. To protect your legacy and maintain family harmony, it is time to move beyond silence.

Proactive, collaborative planning is the key to preventing conflict. If you're unsure where to begin, here are actionable tips from experts to help keep your family on the same page.

1. Break the ice creatively

Talking about estate planning is weird, especially if you have other siblings. The last thing you want to contemplate is the loss of a loved one; adding financial logistics to the mix can make an already uncomfortable conversation feel even more daunting.

However, there are easy ways in. Lindsay Bryan-Podvin, licensed master social worker (LMSW), financial therapist and founder of Mind Money Balance, told Kiplinger, "Be creative when opening the door to that kind of conversation. One jumping-off point could be a friend dealing with a parent passing away and all the hoops they had to jump through to settle the estate."

"This can open the door to asking if everything is in place." Podvin also recommends this become a conversation you have with other siblings and parents multiple times. "Keep in mind that each person might remember things differently when you chat, so having multiple conversations ensures everyone is on the same page and concrete details are ironed out."

This checklist can help you get the talks started:

• Schedule a time to talk with all siblings and parents in a distraction-free environment
• Ask open-ended questions, like, "What is your vision for your legacy?"
• Discuss crucial details, such as payable-on-death beneficiaries, funeral arrangements and estate plans.
• Acknowledge the emotional weight — both yours and your parents'.
• Establish a regular check-in cadence to keep the conversation open.

Before beginning, knowing how generations view money can help you understand others' perspectives.

2. Understanding the generational disconnect

Maggie Baker, Ph.D., financial psychologist and author of Crazy About Money, told Kiplinger that she believes older generations used to think it was a taboo topic to discuss.

That generational divide becomes clearer in a Morning Consult survey commissioned by Kiplinger as part of our Trillion Dollar Talk campaign, which found that adult children would rather talk to their parents about almost anything besides inheritance, including politics, their parents' physical and mental health, and when they'd be getting married or having kids. The survey also found that parents plan to split the inheritance evenly, while kids prefer to split it differently.

Failing to discuss estate plans in concrete terms can create confusion later, especially when children are left to sort through documents and piece together their parents' wishes. What parents intend, and what they write down, can be difficult to parse.

An omission can be the focal point that drives division between siblings, where natural rivalries can already occur. That's why a change of approach can make all the difference when discussing inheritance. Instead of thinking of it merely in dollars and property, shift the focus to living legacy. What do you want your inheritance to communicate to your loved ones?

On this front, Baker recommends creating an ethical will. This ensures parents share their values about money with children so they can have trust and assurance.

Doing this can shift the focus away from talking about money only, which can be a taboo topic for older generations, and toward actionable strategies to ensure a living legacy they would be proud to bestow. Planning is vital now because when that day comes, grief can cloud clarity.

3. Prepare for the 'fog of grief'

Losing a loved one can be a surreal and extremely stressful experience. It impacts your physical, emotional, relational, spiritual and cognitive lives. It can make even simple things such as doing the laundry or cooking dinner seem like insurmountable tasks.

Another aspect that can add stress and sibling division, if not already planned, is end-of-life expenses. Podvin recommends, "Have a savings account earmarked for funeral expenses. Since it can take estates 12 to 18 months to settle, this prevents you or other siblings from going into debt to pay for the expense."

Here is my recommendation when searching for savings accounts:

Talk to your parents about designating one or more siblings as a payable-on-death (POD) beneficiary. Upon the loved one's death, the bank will release the funds to that beneficiary, who can use them to pay for funeral and other expenses as they arise without having to go through probate.

It's also important to take some time to heal. Grief can manifest itself in many forms, but so can comfort. One effective strategy is "body doubling" — asking a friend to accompany you on a walk or lunch. This simple presence can help you absorb their energy, reducing some of the stress and pain.

As you come together as siblings to make decisions, don't overlook this one component.

4. Address inequality and resentment directly

When you discover how your parents or older loved ones divided assets and cash, it could make one or more siblings feel overlooked. This is why it's important to share how you feel without attacking anyone else.

To demonstrate, if an aging parent falls ill, one sibling likely serves as a caretaker. One way to support someone who's already been stressed in that situation is for the other sibling(s) to acknowledge the caregiver's work.

Podvin recommends, "Make sure to give them a token of your appreciation. One way to do this could be paying for a trip so they can go away and relax after all the work they did or give them some money to help offset the work they missed while helping the loved one."

Regarding the difficulty of processing these feelings of missing out or anger, Baker suggests, "You should call on a financial therapist. Especially if you're hearing echoes from the grave. You can't resolve it because the person isn't there. With a therapist, they have an idea of how to stop the rumination."

Ultimately, direct communication between siblings and parents can help to eliminate many of the conflicts caused by inheritances. By finding creative ways in, ironing out concrete details in advance and sharing/acknowledging when one sibling has done more work than the other, it can reduce tensions from arising at a time when you should be coming together.

As parents, opening the door to this conversation also ensures you're leaving an inheritance that reflects your values and legacy.

If you expect to receive an inheritance, speaking with a financial adviser can help you make plans to maximize your wealth and achieve your financial goals while keeping in mind your relative's values, so you're not overwhelmed when you receive it.

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

More Trillion Dollar Talk

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• Why Leaving an Equal Inheritance to Your Children Could Backfire

Dear Wealth Wise: My husband and I are in our 40s with three kids. Life is expensive. We often ask my 72-year-old mom to help with costs like summer camp and after-school care. My dad passed six years ago and they saved a lot — probably a few million if I had to guess. Her home is paid off and she has few expenses. We need camp and after-school care so we can work. These are not luxuries; they’re necessities, and we can’t afford them on our own right now. My aunt says we’re taking advantage and that my mom should spend her money on herself in retirement. We’re honest with my mom about what the money is for (our kids do go to a nicer camp, not the cheaper ones). Are we really doing something wrong? I’m an only child and any money she doesn’t spend in her lifetime probably goes to me anyway. — Stretched Thin

Dear Stretched Thin: In the coming years, trillions of dollars will be passed down as part of the Great Wealth Transfer. But some well-off parents would rather give with warm hands and help their grown children financially when they truly need it, such as when they’re deep in the trenches of childcare expenses.

Here, our reader is clearly blessed with a well-off mother who’s generous with her resources. But is her aunt butting in for no good reason, or does she have a point about our reader potentially taking advantage? Here’s what the experts have to say.

Recognize that there’s actual concern for your mother

When you’re struggling financially, your mother is equipped to help, and your aunt keeps making unwelcome comments about the situation, it’s easy to see how tensions might escalate. But one thing to realize is that your aunt’s comments may not be intended as snide, says Will Haga, CFA and Wealth Advisor at Ullmann Wealth Partners.

"It is important to take a step back and put yourself in your aunt’s shoes and realize that she is approaching this with concern for your mother," he insists. "Your aunt’s primary concern is making sure that your mother can live a meaningful life while planning for future costs, such as long-term care."

As Haga explains, a 72-year-old woman could easily have 20 or more years of retirement to fund. And, he warns, "A single extended stretch of assisted living or in-home care can run well into six figures a year in many areas, and that kind of cost can erode the 'few million' quicker than you think."

Understand what the numbers look like on both sides

Maybe your mother can easily afford childcare costs like a nice camp. But if you don’t know for sure, Haga says, then that’s an important conversation to have.

"'Probably a few million' is a large range, and getting more detail on her balances, income, expenses, and plans for long-term care will help you understand the impact of today’s financial decisions," he advises.

Haga also thinks it’s best to work with your mother to arrive at a concrete amount she feels comfortable giving each year.

"Having a predefined number allows your mother to plan for the expense, allows you and your husband to budget accordingly, and removes the stress from the process," he explains. "I would plan to review this amount annually and give your mom the opportunity to make changes."

Brandon Agamennone, CRPC and wealth management adviser at Victory Private Wealth LLC, agrees that having an open conversation is key.

"The biggest mistake families make is treating financial support as an unspoken expectation instead of an intentional decision," he says. "I would encourage the conversation to shift from 'Can you help us?' to 'What role do you want your money to play in your family's life?'"

Agamennone says it’s also important for your mother to understand the "why" behind her financial gifts. She should figure out whether helping brings her joy or feels like an obligation.

Before asking your mother for money, make sure you are maximizing any Dependent Care FSAs available to you or your husband. You should also ensure that you are using the Child and Dependent Care Tax Credit. Always check whether you are leaving free tax money on the table before tapping into generational wealth.

Dig into the details

As the recipient of those gifts, Agamennone says you should communicate the following so your mother understands the whole picture:

• Your household budget.
• The amount of money you’re asking for annually and why.
• The steps you’re taking, if applicable, to improve your financial situation and rely less on her.

Then, if she agrees, you can explore the best way to give a gift.

She may use the annual gift tax exclusion to give you up to $19,000 (the 2026 limit), or you and your husband $38,000 total. She won't have to file any paperwork with the IRS, and the gift doesn't trigger taxes for the giver or receiver.

Another option is for your mother to pay the camp or after-school program directly. This strategy is often cleaner and avoids some of the emotional toll of giving you money. She should talk to her financial planner to ensure she's following tax rules.

"The healthiest family relationships are built when neither side feels guilty or entitled," Agamennone notes.

Give your mother an out

As much as you might appreciate your mother’s financial help, you shouldn’t feel entitled to it. You also shouldn’t make her feel coerced into subsidizing your costs, even if some of them are necessities.

"I think for the daughter that's taking her mom's money, it's important to make it clear to Mom that whether she says yes or no, she is still loved and accepted by the daughter," says Christian Bumpous, LMFT, LPC, and founder of Therapie.

"Right now, the mom might be saying yes out of love, but she might also be saying yes because she feels fearful that if she said no, she would disappoint the daughter," Bumpous explains. "I think a way to make this truly feel safe for everybody would be to give her the invitation to decline the request."

At the same time, Bumpous says it’s important to validate your aunt’s feelings and let her know you see her worry.

"Say something to the effect of, 'I see that you're worried about her, and I love that you look out for her,' while also holding the boundary that it's not for the bystanding sister to decide what happens with the money."

Bumpous also says it’s important to treat your mother’s financial resources as respectfully as you’d treat your own. The nicer camp, for example, may not be necessary if there’s a less expensive alternative that does the job of providing childcare.

He suggests that our reader ask herself, "Would I still pick this camp if I was the one paying?"

If the answer is no, he says, that might actually mean that the mother is really just paying for an upgrade. And in that case, he says, "The honest thing would be to tell Mom that it's an upgrade as opposed to an essential, and then Mom gets to decide if she wants to contribute or not."

Either way, Bumpous says, your best bet is to bring all the adults involved together for these open discussions — your mother, your aunt, and your spouse, who’s also the recipient of financial support.

"The more this can be a conversation amongst all parties, the easier this whole thing is going to get," he insists.

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.

More Wealth Wise Advice on Generational Wealth Transfer

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• 'Subsidized Adulting': Can You Afford to Help Your Children Financially?
• Should We Bankroll Our Son's $180K Law School Tuition Even Though We're Retired?

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When celebrating a major moment — a big birthday, graduation, marriage — no one wants to consider the financial implications.

But it could be a costly mistake not to take some time to figure out how each life milestone could impact your life savings.

I'm not suggesting leaving the party early. But afterward, find out what, if anything, you should do as a result of having a teenager, getting married or turning another year older.

Here are 11 significant life events and financial considerations for each, coming to you from the vantage point of an experienced senior wealth adviser at Carnegie Private Wealth.

1. When your child turns 13

There's no need to throw cold water on your new teen's celebration but having a 13-year-old means that your Child and Dependent Care Credit expires on the big day.

You'll need to adjust your tax withholdings, stop using pretax Dependent Care Flexible Spending Account (DCFSA) funds for that child's care (any expenses incurred on or after the 13th birthday are ineligible) and prepare for higher out-of-pocket costs for such things as after-school care and summer camp.

Thirteen is when your child becomes eligible for teen-specific bank accounts, which is convenient, since it's also when they can start earning independent income. That's an opportunity to drive home the money lessons you've been teaching up to now.

Money in a piggy bank isn't earning interest. Money in a real bank can. If you want to get serious about saving, consider a brokerage account for your teen.

2. Graduating from high school/turning 18

This is when parents can transfer full control of custodial accounts to their (now adult) child.

At 18, you have the legal right to sign independent financial contracts, open standard bank accounts and apply for credit cards without a co-signer.

Your 18-year-old should already understand the value of saving and the slippery slope credit card debt can be. Does your young adult understand how credit cards affect their credit and the importance of paying off the balance each month?

Before they head to the bank to apply for what might look like "easy money," impress upon them what an 18% to 22% interest rate means — and that building a good credit history is going to make life a lot easier.

3. Graduating from college/starting a first job

You'll need a budget that includes an emergency fund. Saving for long-term goals is important, too, but don't lose sight of the immediate future. A flat tire, a visit to urgent care, reduced work hours or a layoff are all reasons to keep some of your savings readily accessible.

Continue building a solid credit history. If you took out student loans, paying them back should be a priority.

4. Getting married

First, have honest discussions about your current financial standing. Discuss attitudes toward debt. It's very important to sign a prenup.

Becoming a two-income household means it's time to update your budget.

• Maximize your savings
• Decide if you'll have a joint account or separate
• Determine who's paying the bills
• Start a financial organizational system so passwords and account information are safely stored but accessible to you both

Either of you should be able to step in and handle the other's financial "job" if necessary.

5. Having a baby

Along with sleepless nights, you're about to encounter sticker shock over the price of diapers, formula, baby food and everything else little humans require.

But you'll be so enamored with your baby, you'll hardly notice. Now's the time to:

• Open a 529 college savings plan
• Add Junior to your health insurance
• Consider buying life and disability insurance
• Update your will — or get one, if you haven't yet

6. Buying a first house

Time for another new budget. While you're building equity as you pay down your mortgage, you'll also want more cash on hand for the inevitable home repair — because when the HVAC goes out, there's no landlord to call.

Set aside money for maintenance and repairs so an expensive surprise doesn't have to go on a credit card.

7. Turning 50

In my experience, that's when people really start to get serious about firming up retirement planning. It's a good time to evaluate: Do I have enough? And if I don't have enough, what do I need to do to catch up? There's still plenty of time.

8. Turning 65

The Medicare birthday is a big one. You can stop worrying so much about the health insurance burden and shift your thinking to long-term care. Talk to your financial adviser about where to invest the money, you're suddenly not having to spend on health insurance premiums.

9. Turning 75

Depending on when you were born, you might already be taking required minimum distributions (RMDs) from tax-deferred retirement accounts. RMDs generally begin at 73, but the starting age rises to 75 for people born in 1960 or later.

The government eventually requires you to start taking money out of most tax-deferred retirement accounts, and those withdrawals generally count as taxable income.

Talk with your financial and tax professionals about what you're required to withdraw and what to do with money you don't need for living expenses. If charitable giving is important to you, ask whether qualified charitable distributions make sense.

Between 75 and 80 is also when seniors — and their adult children — need to think about quality of life. Community is important as we age. I believe what keeps people excited about life is having friends and something to look forward to.

Loneliness and isolation are devastating to health and well-being. If you don't have people you enjoy spending time with, all the money you set aside for retirement is going to waste.

• Try a new hobby
• Get outside
• Make time for old friends and cultivate new ones

Your longevity depends on it.

10. When you become a grandparent

If you're able to help pay for a grandchild's education, a 529 plan is often a great place to start. The money can grow tax-free, and withdrawals are generally tax-free when used for qualified education expenses.

Before you start writing checks, think about your family as a whole. If one adult child has children and another doesn't, consider whether your giving creates an imbalance you didn't intend. Fair doesn't always have to mean equal, but it should be intentional.

11. Death of parents/inheritance

Receiving an inheritance can be emotional as well as financially complicated, so resist the urge to make major decisions immediately. Start by understanding exactly what you inherited — cash, taxable investments, retirement accounts, real estate or other assets — because different assets come with different tax rules.

You'll want to work with a CPA and your financial adviser before selling, moving or withdrawing inherited assets.

For example, inherited property generally receives a new cost basis based on its fair market value at the owner's death, while many non-spouse beneficiaries of inherited retirement accounts must empty those accounts within 10 years and might have distribution requirements along the way.

Before spending an inheritance, consider how it could strengthen your own financial future.

Life's milestones are worth celebrating. Just remember that once the bubbly is gone and the cake is eaten, a little financial planning can help you focus on what matters and make the most of what comes next.

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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.

Social Security needs more money, and some Congressional lawmakers want high earners to help provide it.

Sens. Elizabeth Warren, D-Mass., and Bernie Moreno, R-Ohio, are calling for the elimination of the Social Security payroll tax cap. The proposal would require people with higher wages to pay Social Security taxes on more of what they earn.

But changing the Social Security tax cap would be more complicated than simply asking high earners to pay more taxes. Key questions Congress would have to address include how to change the cap and whether additional taxes would increase Social Security benefits for high earners.

The clock is ticking. Without major changes, the Social Security retirement and survivor trust fund is projected to run short of money as soon as 2032, according to the latest Social Security Trustees' report. That could result in an across-the-board 22% reduction in benefits. Here's more to know.

How the Social Security tax limit works

If you receive a regular paycheck, you’re likely familiar with the 6.2% Social Security tax that helps fund retirement and disability benefits for millions in the U.S., since it can shrink your take-home pay. (Self-employed workers also pay Social Security tax on their earnings.)

But you might not know that, depending on your income, the Social Security payroll tax doesn't necessarily apply to all your wages. This is known as the Social Security tax cap or tax limit.

For 2026, Social Security taxes apply to the first $184,500 you earn.

• Employees pay 6.2% on those wages, while employers pay another 6.2%.
• Once your wages reach $184,500, you stop paying the Social Security portion of the payroll tax for the rest of the year.

A worker earning $200,000 and a worker earning $1 million both pay Social Security taxes on $184,500 of wages. The worker earning $1 million doesn't pay the 6.2% Social Security tax on the remaining $815,500.

That tax limit also affects future benefits. The Social Security Administration uses your earnings history to calculate your Social Security benefit, but that calculation doesn't include earnings above the tax limit.

Essentially, the current Social Security payroll tax system caps both how much high earners pay into Social Security and how much those earnings can increase their future benefits.

The question now is: What would happen if Congress lifted that ceiling?

Proposal to eliminate the Social Security tax cap

Warren and Moreno want to eliminate the current tax limit, which would subject wages above $184,500 to the 6.2% employee Social Security tax if enacted at the current rate.

They say the change would ask the highest earners to contribute to Social Security at the same rate as other workers.

"This is a no-brainer: The wealthiest Americans, who have benefited the most from America's opportunities, should contribute the same percentage of their income as a factory worker in Chillicothe, Ohio, or a teacher in Worcester, Mass," Moreno stated in a release regarding the proposal.

• For a worker earning $1 million, that would make another $815,500 of wages subject to the Social Security tax.
• At the current 6.2% rate, that's about $50,561 more in Social Security taxes for the employee.
• The employer would generally owe another $50,561.

Warren and Moreno say the additional revenue could help protect Social Security benefits without raising the payroll tax rate for most workers (i.e., those whose wages remain below the taxable maximum).

"That one reform alone would impact about 6% of all households, the highest-earning Americans, and would protect Social Security benefits for at least two decades," Warren said in a Senate Finance Committee hearing in August.

Eliminating the Social Security tax limit would bring in substantial additional revenue, but how much it would improve the program's finances would depend, in part, on what happens to benefits for high earners.

For example, using its 2025 Trustees Report assumptions, the Social Security Administration modeled what would happen if the tax cap were removed. In one version, high earners would pay Social Security taxes on all their wages but wouldn't receive extra benefits based on the additional taxes they paid. That would close about 67% of Social Security's long-term funding gap.

But what if those extra taxes also counted toward future benefits?

• High earners would get larger Social Security checks in retirement.
• That would mean more money coming into Social Security now, but also more money going back out later.
• Under that approach, the change would close about 48% of the long-term funding gap.

In other words, the more benefits high earners get from their extra taxes, the less the tax increase would help Social Security's finances.

• The Tax Policy Center estimates that taxing all wages for Social Security would bring in about $2.5 trillion over 10 years (2026 through 2036), affecting about 6% of U.S. households.
• The Tax Foundation estimates that the change could bring in about $3.2 trillion over roughly 10 years, from 2027 through 2036. But after factoring in possible economic changes, it estimates the gain would be closer to $1.5 trillion.

*The estimates use different assumptions about how people and businesses might respond to higher payroll taxes and whether high earners would get bigger Social Security benefits in return for paying more.

Either way, the analyses show that eliminating the tax cap could bring more money into Social Security. But such a measure wouldn't be enough to fix the program's long-term money problems on its own.

Impact on high earners?

For most workers, eliminating the Social Security tax cap wouldn't change their paychecks. The proposed change would affect workers who earn more than the 2026 tax limit of $184,500.

At the current 6.2% tax rate, here's what such a tax change might look like for high earners:

• $200,000 salary: About $961 more in Social Security taxes each year
• $500,000 salary: About $19,561 more each year
• $1 million salary: About $50,561 more each year

Employers also pay a 6.2% Social Security tax, so their payroll taxes would also increase on those additional wages.

Note: Such a change would apply to wages, not all income. For example, capital gains and dividends generally aren't subject to the Social Security payroll tax. Two people with the same total income could see different impacts depending on how they earn their money. The above examples are for educational purposes only and are not based on existing law.

The proposal raises another important question: Would high earners get more Social Security benefits because they're paying taxes on more of their wages?

That matters because it could reduce how much the tax change helps Social Security. Giving high earners higher benefits would mean more money going back out of the program later.

The Social Security Administration estimates that eliminating the tax cap without giving high earners extra benefits would close about 67% of the program's projected long-term funding gap. If those newly taxed earnings also counted toward future benefits, the improvement would be about 48%.

Social Security solvency: Bottom line

For now, the Warren-Moreno approach remains a proposal. While eliminating the taxable maximum isn't a novel idea, the latest push is noteworthy since Social Security's financial outlook is top of mind for many lawmakers, workers and retirees.

Whether Congress takes this idea further, or pursues other proposals such as a flat-rate Social Security cost-of-living adjustment (COLA) or adding a new tax on net investment income above $400,000 in addition to eliminating the Social Security tax cap remains to be seen.

In the meantime, the SSA is expected to announce the 2027 Social Security tax limit in mid-October. That number will determine how much of a worker's wages are subject to the 6.2% Social Security tax next year. Stay tuned.

Related

• Social Security Tax Limit for 2026
• What a New Flat-Rate SS COLA Would Mean for Retiree Taxes
• 7 New Tax Brackets Proposed for High Earners
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Fifteen years ago, Ray and Diane Kessler's investment manager recommended a chip company she was following. They bought 125 shares of Nvidia for about $1,500, mostly to be agreeable, and then forgot about it. Two stock splits later, they hold 5,000 shares worth roughly $1 million. Their cost basis is still $1,500.

Ray is 65 and Diane is 63. Both are working and earning well, but they plan to retire soon. They live in California, and they are uneasy about how much of their portfolio rides on one stock. So they asked their adviser how to diversify out of it without losing a third of the value in capital gains tax.

She told them what most advisers would. A large gain can be trimmed at the edges, harvested against losses or spread across tax years, but each leaves you still owning the gain. Only two things eliminate it: Hold the asset until you die, so your heirs inherit it with a stepped-up basis, or give the asset to charity.

Neither one fit. Waiting decades for the step-up meant holding one undiversified position, and giving away a million dollars was not an option. So: Sell, pay the tax, reinvest the rest.

What nobody asked was how long the Kesslers were likely to live.

The IRS thinks you're average

There is a third option. You transfer the shares into an irrevocable trust, called a charitable remainder unitrust (CRUT), and the trust sells them. Because the trust is tax-exempt, no capital gains tax is due on the sale, so the whole amount stays invested and diversified at once.

The trust then pays you a set percentage of its value, recalculated each year, for life, for both lives or for a term of years. Whatever remains goes to the charity you named, and you take an income tax deduction up front for the calculated value of that future gift.

The IRS determines that gift value on the day of funding, using actuarial tables built from census data, currently Table 2010CM. Those tables describe the general population.

But the people who fund these trusts, like the Kesslers, are affluent, insured and longer-lived than average. Insurance companies know this and price annuities off a separate annuitant table.

The IRS assumes you will live as long as the average American. If you live longer than that, the trust runs longer than the deduction was calculated for, and every extra year compounds.

Why the mismatch pays

Both the deduction and your maximum payout are fixed on the day of funding. The trust runs on your actual life.

If the Kesslers sell, they realize a $998,500 gain and pay 33.1% in combined federal and California tax, leaving $669,496 to reinvest. In a CRUT, the full $1 million stays invested. At a 6% payout, that is $60,000 in the first year against $40,170 from an equal draw on the reinvested proceeds.

The trust doesn't make the tax disappear. The payments are taxable, and in year one both paths deliver similar after-tax spending money. What differs is that the tax is spread across decades while a larger base compounds.

Better than what, exactly?

A trust isn't good or bad on its own, only better or worse than what you would otherwise have done. There are three realistic alternatives:

• Sell and reinvest. Pay the tax now, rebuild in a diversified portfolio.
• Hold and leave it. Keep the stock, live on other money, pass it to the children with a stepped-up basis.
• Hold and live on it. Keep the stock and draw the same 6% from it.

In research published in the August 2026 Journal of Financial Planning, I tested a trust against all three, simulating 10,000 market futures and running the same family down both paths in each one. A "win" means the family finished that future with more spendable wealth, in today's dollars, from the trust. So a 66% win rate doesn't mean 66% more money. It means the trust came out ahead in about two thirds of the futures tested.

What longevity does to the numbers

The third alternative is the hardest for the trust to beat: It pays identical income and still passes a stepped-up estate to the children. Under IRS life expectancy, a couple aged 63 and 65 beats it with a trust 28.2% of the time.

However, give that couple seven more years and the number is 96.4%.

No other variable came close. The deduction was locked at the start on an average life. The years the trust actually ran were not.

Where this doesn't work

All of this assumes you have no charitable motive and are measuring nothing but dollars. If you do want to give, any asset at any basis will do.

For everyone else, basis moves the answer more than longevity does. The trust beats all three alternatives when basis is under roughly 11% of current value and loses to all three above 25%. Long life improves those odds without reversing them. The Kesslers sit at 0.15%.

Across 500 randomly drawn household situations, varying age, basis, payout and home state, the trust was the better choice in about a third of them. That is not a coin you have to call blind. Every one of those variables is knowable before anything is signed.

The up-front deduction is what most people ask about first, and it matters least. Tax legislation in 2026 added a 0.5%-of-AGI floor and capped top-bracket filers at 35 cents per dollar. Over a long trust, the tax on the payments takes back much of what the deduction gives.

Outcome

The Kesslers funded a two-life trust in November, with the full million still invested. Buy an annuity and the insurer prices your health. Fund a CRUT and the government prices it off a table that assumes you are average. Few advisers will raise it on their own, because it is filed under charity. Ask.

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• For High-Net-Worth Retirees, Tax Planning and Estate Planning Are the Main Events
• Give More But Pay Less: An Essential Guide to Tax-Smart Charitable Giving in 2026
• Four Clever and Tax-Efficient Ways to Ditch Concentrated Stock Holdings, From a Financial Planner
• Tied Up in Knots Over a Concentrated Stock Position? This Strategy Will Help You Unravel

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.

Roth conversions get a lot of enthusiastic press, and most of it is deserved. Moving money from a traditional IRA into a Roth can reshape your tax picture for decades and ease the required minimum distribution burden later in retirement.

But somewhere along the way, "conversions can be smart" curdled into "conversions are always smart," and that's where I start to worry.

A Roth conversion is a tool, not a virtue. There are specific situations where they're the wrong move — and sometimes an expensive one. Knowing when to hold off is just as valuable as knowing when to act.

Here are five times a Roth conversion usually doesn't make sense.

1. You're in a high-income year

The entire logic of a conversion rests on paying tax now, at today's rate, to avoid tax later. That only works in your favor if today's rate is lower than the rate you expect to face down the road.

Convert during a peak earning year, when your income is already pushing the top of a bracket, and you're doing the opposite: Paying tax at one of the highest rates you'll ever see.

If you're still working and at the height of your career, or you had an unusually large income event this year, that's generally the worst possible time to stack a conversion on top.

The better move is often to wait for a lower-income year, which for many people arrives after they stop working but before required minimum distributions begin at age 73.

2. You'd have to use the IRA itself to pay the tax

This one is a quiet deal-breaker that people miss. A conversion works far better when you can pay the resulting tax bill from outside funds in a taxable brokerage or savings account.

If the only way to cover the tax is to pull extra from the IRA you're converting, you erode the whole benefit. You're shrinking the amount that actually makes it into the Roth, and if you are under 59½, the portion withheld for taxes could itself trigger a penalty.

Picture converting $100,000 and needing roughly a quarter of it to pay the tax. If that quarter comes out of the IRA rather than a separate account, only three-quarters of the money reaches the Roth, and you've lost years of potential growth that qualified Roth withdrawals would have delivered tax-free.

When there's no outside cash to pay the tax, a conversion frequently doesn't make sense. The answer is to wait until you have the liquidity to do it right, or to convert a smaller amount you can actually afford to cover.

3. You expect your tax rate to fall in retirement

Not everyone faces higher taxes later. Plenty of people will drop into a lower bracket once the paychecks stop, especially if they don't have enormous traditional balances generating large future RMDs.

If you genuinely expect your retirement tax rate to be lower than it is today, converting now means voluntarily paying a higher rate to avoid a lower one. That is backward. The conversion crowd sometimes assumes everyone's taxes are headed up, but that is an assumption, not a fact, and it deserves to be tested against your actual projected income.

For some people, simply taking ordinary distributions in retirement at a modest rate beats prepaying tax today. The only way to know is to project your retirement income honestly, including Social Security and any pension, rather than assuming the worst about future rates.

4. The money will pass to heirs who get a step-up anyway

Estate considerations can flip the entire calculation. Consider someone late in life with a serious health situation, whose assets are likely to pass to heirs before long.

Traditional IRA dollars left to heirs are taxed as those heirs withdraw them, which is a real consideration. But other assets, like appreciated stock in a taxable account, generally receive a step-up in cost basis at death, which can wipe out the embedded capital gains for the heirs.

In a case like that, spending energy and tax dollars converting a traditional IRA may make less sense than simply leaving the accounts as they are and letting the estate planning rules do the work.

This is exactly the kind of situation where a reflexive "always convert" instinct can cost a family money rather than save it. It is worth coordinating with an estate planning attorney before acting.

5. State taxes erase the federal benefit

Federal brackets get all the attention, but your state often wants a cut of a conversion, too. If you live in a high-tax state today and realistically plan to retire somewhere with low or no income tax, converting now can mean paying state tax you could have sidestepped entirely by simply waiting until after you move.

The federal math might look fine in isolation, but once you layer your current state's tax on top of the conversion, the case can fall apart.

The decision and your geography are tied together, and analyzing the conversion without your specific state in the picture can lead you somewhere you wouldn't choose if you saw the full bill.

The pattern worth noticing

Look at these five situations and a theme emerges. A Roth conversion isn't good or bad on its own. It's good or bad relative to your specific circumstances:

• Your current bracket vs your expected future bracket
• Whether you have outside cash to pay the tax
• Your estate plans
• Your state

Strip away those specifics and "always convert" is just a slogan. What makes the slogan dangerous is that it sounds responsible. It carries the glow of disciplined, forward-thinking planning, which is exactly why people follow it without checking whether it fits their own numbers.

I'm not arguing against conversions. Used in the right years, with the tax paid from the right place, they remain one of the more useful planning tools available to people heading into retirement.

I am arguing against treating them as automatic. The same move that helps one person in a low-income gap year can hurt another who is at peak earnings, short on outside cash or about to relocate to a no-tax state.

Before you convert, the honest question isn't "Should everyone do this?" It's "Does this make sense for me, this year, given everything else?"

Sometimes the answer is an enthusiastic yes. Sometimes the most valuable thing a conversion analysis produces is the decision to wait.

Both are wins, and knowing the difference is what separates a real strategy from a popular one.

A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59½ or prior to the account being opened for five years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

Related Content

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• How to Coordinate Claiming Social Security With Your Tax Bracket
• The 7 RMD Tax Traps Waiting for You in Your 70s — and How to Start Disarming Them in Your 60s

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.

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. 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, 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 might feel resentful, while the one who already benefited might not remember your help.

Without a change to your estate plan (sometimes called a hotchpot clause), the equal division can 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 nonprobate assets further reduce the chance that the plan unravels in court," he says.

Sacrifices might 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 with 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 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 the late 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

Most of my clients spend three decades focused on one number: How much they've saved.

As they approach retirement, the question shifts. How much can we spend and keep the plan on track?

That shift catches more people off guard than anything else I see in the practice I founded, MOKAN Wealth Management. It centers on one portfolio decision that, made before you stop working, might be among the most consequential financial moves a preretiree can make.

The risk nobody considers

The first 10 years of retirement are the most consequential, financially speaking. If the market pulls hard during that stretch and you still need income, you're in a position when selling becomes unavoidable. Since every dollar pulled from a 401(k) or IRA is taxed as ordinary income, you often have to sell more shares just to cover the tax bill.

Consider a retiree who needs $60,000 a year from a $1.5 million portfolio, and the market drops 20% in year one. To generate that same $60,000, they now must sell a larger share of a smaller pie and pay ordinary income tax on top of it.

If they need $80,000 pretax to net $60,000 after taxes, that could mean liquidating more than 5% of an already reduced account in a single year, before the market has had any chance to recover.

The market pulls back. You sell more. You owe more tax. Those shares are gone before the recovery arrives. This isn't a rare scenario. It's predictable, and it has a name: Sequence of returns risk.

There are steps you can take to avoid having to deal with this issue.

Step No. 1: Buy yourself time

Time is the one thing that changes everything in a downturn. If you don't have to sell, you can wait for a recovery. The problem is that most retirement plans don't build in that time.

Downturns vary widely in length. The 2020 pullback took about six months to recover. The 2022 decline took roughly two years. The dot-com decline from 2000 to 2002 took about seven years, and the 2007 to 2009 financial crisis took about five and a half. A retiree who needs income every month doesn't have seven years to wait.

The solution is what I call a Retirement War Chest. About three years before retirement, set aside four to eight years of portfolio income in a separate reserve, sized to your specific income plan, tax strategy and spending goals. Not a vague percentage, not a target-date fund — your specific number.

That reserve funds your lifestyle and buys your growth investments time to recover without forcing a sale at the worst possible moment.

Step No. 2: Build it to hold up

The War Chest is not the place to chase yield or take on credit risk. It needs to be stable, liquid and predictable — which points to laddered short-term U.S. Treasuries.

Consider a hypothetical $825,000 War Chest:

Each rung matures and rolls forward, so the reserve keeps generating predictable income without ever touching the market.

This example is illustrative only. Every household's number looks different, depending on spending, Social Security timing and other income sources.

Step No. 3: Let the rest of the portfolio do its job

The War Chest is not the whole portfolio; it's the piece that buys time. The rest needs to stay invested and growing, because a 62-year-old couple could easily have 30 years of retirement ahead of them, and inflation doesn't take time off.

A hypothetical portfolio averaging a 10% return with an 18% standard deviation would produce returns from -8% to 28% in roughly two out of three years, and from -26% to 46% in about 19 out of 20 years. Occasionally it will perform well outside that range in either direction.

Those difficult years on the low end are exactly what the War Chest is built to absorb, so the growth portion of the portfolio never has to sell into them.

Past performance does not predict future results, and every portfolio's actual range will differ based on how it's built and what it holds.

The part most advisers miss

A market pullback can also open a better Roth conversion window. When account values are down, converting the same number of shares costs less in tax. The War Chest covers spending while the conversion happens, and when the market recovers, that growth occurs inside the Roth account, tax-free from that point forward.

Few advisers connect these two ideas. The War Chest is not only a spending reserve; it's what makes it possible to act on a tax opportunity during the exact years the market is presenting one.

The bottom line

The Retirement War Chest is not complicated. It is disciplined. The goal was never to sidestep market volatility. Markets will do what markets do. The goal is to ensure volatility never forces a sale at the wrong time.

One shift, made before you retire is what it takes to walk into the next 30 years on your own terms.

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• 9 Tax Surprises Retirees Don't See Coming Until It's Too Late
• The Midterms Offer a Unique Tax Planning Opportunity, But Most Retirees Miss It

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 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

Finding love later in life can bring a renewed sense of possibility, but it can also come with homes, retirement accounts, trusts, business interests, adult children and estate plans that make financial decisions more complicated.

According to a widely cited figure from the U.S. Census Bureau, the average age of widowhood is just 59.

Meanwhile, a recent study found divorce rates among adults age 50 and older — known as "gray divorce" — have more than doubled over the past 30 years and now account for nearly 35% of all divorces. The number of adults ages 40 to 59 marrying for the first time has more than quadrupled.

The result? More people than ever are entering — or re-entering — the dating world later in life.

For those who formally couple, an increasing number are choosing to cohabitate — either before marriage or instead of it. In 2000, fewer than 1 million adults age 50 and older lived with an unmarried partner.

The National Center for Family & Marriage Research found that by 2022, that number had grown to around 4.6 million, a nearly fivefold increase.

But living together without marrying doesn't eliminate financial risk. In many cases, it can increase it because fewer automatic legal protections apply, and those protections vary by state.

Married couples benefit from family law, which governs issues such as asset division and financial support if a relationship ends. Unmarried couples generally receive only the protections they put in writing.

If you move into a partner's home, contribute to renovations or commingle assets without a formal agreement, you could walk away with little — or nothing — if the relationship ends. You may also have no legal claim to assets if your partner dies without naming you in an estate plan.

Whether you marry or simply share your life with someone, there are important steps you should take to protect one another financially and build a stronger partnership — especially as you age.

1. Share the full financial picture

It's hard to know how to protect each other financially until you understand what each of you is bringing into the relationship.

Take the time to ensure both partners have a full financial picture of the other's net worth, income sources today and in retirement, obligations to children or ex-spouses, business interests, real estate holdings and current estate plans.

But don't stop there — talk about how each other's wealth was created and what challenges shaped that journey. These details make up your money story, which can explain your perspectives, behaviors and triggers around financial matters.

You may have inherited money after a contentious family dispute, making you guarded about transparency. Your partner may have gone through a divorce where finances were weaponized, making them anxious about merging accounts.

Understanding these histories — not just the numbers — can help both of you approach money conversations with more patience, less defensiveness and a clearer sense of where concerns are really coming from.

2. Agree on priorities and contingencies

Just as each of you brings a unique financial picture and personal history to the relationship, you also bring different priorities, concerns and goals. One partner may be focused on navigating a significant wealth disparity, while the other is concerned about preserving an inheritance for children while still building a shared future.

Perhaps you've moved into your partner's home and are wondering what would happen if they passed away before you, or how best to structure household expenses and shared financial responsibilities.

Whatever your concerns may be, open and honest communication is essential. Discuss not only what matters to each of you, but why it matters. Walk through potential "what if" scenarios together and identify solutions before they become challenges.

These conversations can help align expectations, reduce misunderstandings and create a plan that reflects the needs and priorities of both partners.

3. Formalize the plan

Good intentions aren't enough when life gets complicated. If you want your wishes honored and your loved ones protected, you need legally binding documents — and there is no one-size-fits-all solution.

The right strategy depends on your circumstances and may include a cohabitation or prenuptial agreement, wills, trusts, beneficiary designations, powers of attorney and property agreements.

For example, if you're living in a home owned by your partner or fiancé, a cohabitation agreement alone may not protect your right to remain there if they pass away.

Likewise, if you're remarried and want to provide for a spouse while ultimately preserving an inheritance for your children, that often requires a thoughtful combination of estate planning strategies, trusts and marital agreements.

It's about creating the right structure — not simply checking documents off a list. Regardless of your circumstance, it all comes down to understanding what you want to accomplish, then working with an estate planning attorney, tax professional and financial adviser, as appropriate, to put the right solutions in place.

The takeaway

The goal is not to protect yourself from your partner. It's to remove ambiguity so the relationship you're building together — whether it comes with a marriage certificate or not — is grounded in clarity rather than assumptions.

The couples who navigate this well aren't necessarily the ones with the least wealth disparity or the simplest family dynamics. They're the ones willing to have uncomfortable conversations early, put appropriate legal protections in place and view financial transparency as an act of love rather than a sign of distrust.

Related Content

• Estate Planning and the Legal Quirks of Retiree Cohabitation
• How to Handle Money Together in a Second Marriage
• Money Questions Couples Should Ask Before Combining Finances or Planning a Future Together
• To Love, Honor and Make Financial Decisions as Equal Partners
• How Women Can Navigate Competing Priorities as They Age

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.

Women are stepping into the retirement conversation with more power and purpose than ever.

They control a growing share of household wealth, typically outlive their spouses and increasingly hold full authority over the financial decisions that shape their later years.

For advisers, this isn't just a demographic shift. It's one of the most meaningful opportunities in the profession.

Women bring real strengths to the table. They tend to save diligently, take measured risks, plan for the people they love and stay the course when markets get loud.

As an adviser, your job isn't to fix them. It's to meet their readiness with experience, curiosity and genuine support. Then you can help them turn a lifetime of resilience into a lasting strategy.

Three forces that shape the planning conversation

Women's retirement math is shaped by three structural realities. Understanding them isn't about dwelling on setbacks. It's about spotting where thoughtful planning creates the biggest wins.

The pay gap has a compounding effect. Women working full-time still earn about 81 cents for every dollar a man earns, which amounts to roughly $542,800 in lost earnings over a 40-year career — and more than $1 million for many women of color. That ripples through Social Security, pensions and every retirement account.

The opportunity: Catch-up contributions, tax-efficient savings and income strategies designed to help close the gap on purpose.

Caregiving reshapes the earnings curve. Nearly half of all women who left their jobs in 2025 did so to care for children or aging parents (or both). That pause can mean lost income, halted contributions and zeros in the Social Security calculation.

Yet these same women are extraordinary planners. Show them how to rebuild momentum after a career break, and you become indispensable.

Longevity multiplies everything. Women generally live longer and are more likely to manage money solo later in life. Longevity is a gift, and it raises the stakes on long-term care costs, estimated at $171,000 for women over the course of retirement vs $98,000 for men, as of 2025.

Stress-testing a plan to age 95 or 100 isn't an uncomfortable question. It's a powerful one.

Life doesn't move in a straight line

Even the strongest plan needs room to adapt. A few transitions can reshape a woman's finances, and advisers who anticipate them are far better positioned to help.

Gray divorce. Divorce rates for couples over 50 have roughly doubled since the 1990s. Income often drops while fixed expenses hold steady.

The key moment is before the decree is signed, when you can help a client understand spousal benefits, pension sharing and separate property. These are proactive conversations, not reactive ones.

The sandwich generation squeeze. Many women support adult children and aging parents at once. Your most valuable contribution is often a simple, compassionate reframe: Children can borrow for education or a first home. No one borrows for retirement.

Helping a client hold that boundary, without judgment, is genuinely impactful work.

The confidence gap. Some women hesitate to engage with the math, shaped by decades of social norms and a fear of missteps. The good news? Confidence is built, not born. Small steps compound just like savings do.

Move your clients forward

A few straightforward approaches can help turn readiness into action for your clients:

• Encourage small, consistent learning. Fifteen minutes a week with a podcast or a well-chosen article gradually shifts how a client relates to her finances.
• Make fears specific. Vague anxiety overwhelms. Named, concrete worries become solvable problems.
• Create a low-noise environment. Retirement is a decades-long strategy. Clients who understand that don't react to every headline.
• Automate where possible. Removing willpower from savings decisions is one of the most practical moves in your toolkit.
• Make the relationship feel safe. A client who feels respected, heard and free to ask questions stays engaged. That's not just a warmth metric. It drives retention and referrals.

Transform their approach

While an independent do-it-yourself attitude is possible for many women entering retirement, the stakes in the planning process can be high, and a well-coordinated adviser and team deliver value that is hard to replicate.

A personalized strategy accounts for the specifics of real life: Career breaks, catch-up windows, spousal preservation and longevity projections tailored to the client in front of you. Templates don't serve this market well.

Technical depth is where integrated teams can shine. Tax-efficient income structuring, Social Security claiming and legacy planning aren't separate conversations. They're interconnected, and coordinating across them produces a meaningfully better outcome.

Emotional steadiness is the most undervalued layer. During divorce, widowhood or a major caregiving transition, clients need someone who can hold the long view calmly while everything else feels uncertain. That steady, objective presence is one of the most important things you can offer.

Practical next steps

A few places to sharpen your approach as an adviser:

• Audit your discovery process. Does it systematically address caregiving history, career-break gaps and longevity concerns? Build those questions in as standard practice, not a special track.
• Build a transitions playbook. Gray divorce and sandwich generation pressures rarely come with advance notice. Equip your team with a clear, thoughtful process before the call comes in.
• Lower the entry barrier. A 15- to 30-minute strategy conversation can help deliver more clarity than weeks of private worrying. Make that easy to access.

The time is now

Women are ready to take the reins of their financial futures, and they're doing it with strength, savvy and a clear sense of what matters. The barriers are real, but they're context, not destiny. What comes next is written by the choices made today.

The adviser who meets that readiness with experience, genuine curiosity and real support won't just help women reach financial sovereignty. You'll earn the trust, the loyalty and the referrals that follow for years to come.

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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.

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.

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• 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.

When you think about the inheritance you'll pass 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 such as 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, said 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)," Farr said.

To help prevent these problems, your executor needs to know about all of the insurance policies you have, even those 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 more than 5,000 Americans Kiplinger conducted in partnership with Morning Consult.

But if your heirs don't know that life insurance policy exists, they might not know to file a claim. 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 could 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 might 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 might 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 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 such as home insurance, car insurance or term life insurance. 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 this information in a spreadsheet on your computer. Farr recommends updating it annually, as details such as 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's accessible enough to the person who needs the document, but secure enough that no unauthorized person can get your detailed policy information.

Related content

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• Avoid These 12 Common Estate Planning Mistakes
• How Much Life Insurance Do You Need?
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For Generation X, those born from 1965 to 1980, retirement looks vastly different from what it did for many of their parents and grandparents.

As traditional pensions phased out, more responsibility for saving and investing shifted to individual workers. Instead of relying on one predictable source of retirement income, many have had to piece together their own retirement nest eggs across 401(k)s, IRAs, Roth accounts, health savings accounts (HSAs) and other investments.

For the generation nestled between baby boomers and Millennials, saving for retirement isn’t the only priority.

According to the Pew Research Center, 54% of adults ages 40 to 49 and 45% of those ages 50 to 59 fall into the "sandwich generation," meaning they have a living parent age 65 or older and either a minor child or an adult child they are financially supporting or have supported.

Managing that dual financial obligation moves retirement planning out of standard blueprint territory and into a situation in which you're essentially building a custom plan. That plan must balance caregiving expenses with your own future savings and navigate income limits, IRS rules and other potential trade-offs.

Knowing which tax credits, deductions, and strategies might apply can help. Here are seven worth thinking about.

Retirement savings tax breaks and strategies for Gen Xers

The following strategies are presented for educational purposes only. Every person's financial situation is different. It's good to consult a trusted tax professional or financial adviser who knows your circumstances, particularly if you're unsure or have questions about the best tax strategies for you.

1. Caring for an aging parent? You might be able to claim them as a dependent

If you’re helping support an aging parent, you already know how quickly caregiving costs can add up. What you might not know is that some caregivers might be able to claim a parent as a dependent.

Generally, to claim a parent as a dependent on your return, the parent must meet several IRS requirements (including gross income below $5,300 for 2026), and you must provide more than half of their total support.

Other requirements apply, particularly when siblings share expenses or caregiving responsibilities.

If your parent qualifies as your dependent, certain medical expenses you pay on their behalf might also be eligible for the medical expense deduction if you itemize and meet the applicable IRS requirements.

2. Don’t overlook the Child and Dependent Care Credit

If you’re helping support an aging parent while also paying for childcare, those expenses can put added pressure on your budget.

The Child and Dependent Care Credit can help eligible taxpayers offset some of those costs. This non-refundable tax credit is designed to offset a portion of the costs associated with childcare for dependents while the parent or guardian is working, looking for work or attending school.

• For tax year 2026 (returns you typically file in early 2027), the credit allows for a maximum of $3,000 in qualifying expenses for care related to one qualifying individual.
• If your household has two or more qualifying individuals, this cap increases to $6,000.
• The credit is applied at a maximum rate of 50%, but the exact percentage depends on your adjusted gross income (AGI).

For a Gen X household already balancing caregiving costs with retirement savings, exploring the specifics of this credit to see if you can benefit might be worthwhile.

3. Put your health savings account (HSA) tax advantages to work

An HSA might start as a way to pay for medical bills, but it can also play a role in longer-term planning. For eligible taxpayers, HSAs offer a combination of tax advantages that can make them useful well beyond current healthcare expenses.

Contributions can be deductible, money in the account can grow tax-free, and withdrawals for qualified medical expenses are tax-free.

• For 2026, the HSA contribution limit is $4,400 for self-only coverage and $8,750 for family coverage.
• Eligibility requires an HSA-qualified high-deductible health plan (HDHP), although 2026 rules also provide for certain bronze and catastrophic plans to be treated as HSA-compatible.

For example, someone who makes the full $8,750 family contribution and can deduct the entire amount while in the 24% federal marginal tax bracket could reduce federal income tax by approximately $2,100.

That combination can make an HSA another piece of the retirement puzzle, particularly for Gen Xers who expect health care costs to remain an integral part of their financial picture later in life. But keep in mind that HSAs aren't right for everyone.

4. Once you get a 401(k) match, ask where the next dollar goes

Getting your full employer retirement plan match is an important part of retirement saving, but what happens after that? The answer isn’t necessarily to put every additional dollar into the same account.

• For 2026, employees can contribute up to $24,500 to a 401(k), 403(b), governmental 457 plan, or federal Thrift Savings Plan.
• Workers age 50 and older can contribute an additional $8,000, while those who turn 60 through 63 during 2026 have a higher "super catch-up" limit of $11,250.

Once you’ve met your match, there’s another question worth asking: ‘Where should my next dollar go?’

A traditional 401(k), Roth account, HSA and taxable investment account each have different tax implications, so the right choice can depend on your income, tax bracket, employer plan and expectations for your future retirement income.

The advantage of an à la carte approach is the flexibility to choose the pieces that make the most sense for your situation. You don’t have to put everything in one place. You can build a plan that works for you.

5. Your retirement savings could earn you a Saver's Credit tax break

Saving for retirement can help you build a nest egg, and for some taxpayers, the contribution itself can also qualify for a tax credit.

The Saver’s Credit, officially called the Retirement Savings Contributions Credit, is available to certain taxpayers who contribute to an IRA or employer-sponsored retirement plan.

• For 2026, the credit can be worth 10%, 20%, or 50% of eligible contributions, depending on adjusted gross income and filing status.
• Up to $2,000 of contributions per person can be used to calculate the credit, making the maximum credit $1,000 for an individual or $2,000 for a married couple filing jointly.

For 2026, the credit is available to taxpayers with an AGI below $40,250 for single filers, $60,375 for heads of household, and $80,500 for married couples filing jointly.

The credit is nonrefundable, meaning it can reduce the federal income tax you owe, but you won’t receive a refund for any amount that exceeds your tax liability.

If you’re already contributing to a retirement account, check whether you might qualify for the credit. Just keep in mind that beginning with contributions for 2027, the Saver’s Credit will be replaced by the Saver’s Match.

6. Make the most of your charitable giving in 2026

Charitable giving can offer tax benefits, but the rules depend on how you give.

Beginning in 2026, taxpayers who take the standard deduction can also deduct up to $1,000 in qualifying cash contributions to eligible organizations, or $2,000 for married couples filing jointly, subject to the applicable rules.

For taxpayers who itemize deductions, 2026 also brings a new 0.5% of AGI floor for charitable deductions.

For people making larger charitable gifts, more specialized strategies, such as charitable gift annuities, might also be worth exploring.

A charitable gift annuity can provide a stream of income in exchange for a charitable contribution, although the tax treatment depends on the gift's structure and the donor’s circumstances.

How you give might be as important as how much you give.

7. Retirement isn't just what you save; it’s what you get to keep

Your retirement account balance tells only part of the story. What matters is how much of it you ultimately get to keep.

A dollar in a traditional retirement account can have a different after-tax value from a dollar in a Roth account or a taxable investment account.

Traditional retirement accounts provide a tax benefit today in exchange for paying ordinary income taxes on withdrawals later. Roth accounts work differently. Given that contributions are made with after-tax dollars, qualified withdrawals are generally tax-free.

For Gen Xers who are still years from retirement, that difference matters. You don’t need to predict exactly what tax rates will look like decades from now. You just don’t want all your future retirement income sitting in the same tax bucket.

Strategically saving and earmarking money across differently structured accounts can give you more control of your money in retirement. You might be able to choose where to draw income based on your circumstances and tax situation at the time, including how much taxable income to recognize each year.

That’s why tax planning shouldn’t stop once you’ve decided how much to save. It should be part of the retirement plan itself.

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• 6 Tax Reasons to Convert Your IRA to a Roth (and When You Shouldn't)

It’s common advice to try to enter retirement debt-free. The fewer fixed costs you have once your job-related paycheck disappears, the less financial stress you might have.

But should your mortgage be an exception? For people who locked in pandemic-era mortgage rates in the 3% range or lower, perhaps it should be. Here’s why having a mortgage in retirement could actually work to your benefit.

The liquidity might be invaluable

If you have a decent amount of retirement savings, you might be able to use some to pay off your mortgage balance before your career wraps up. But Steven Rogé, CFP, chief investment officer and CEO of R.W. Rogé & Company, says carrying a mortgage in retirement could make sense for liquidity reasons.

“It preserves liquidity that can't be pulled away from you,” he explains. “Compare that to a line of credit against your portfolio, where you could face a margin call that forces you to sell assets, often appreciated ones, with tax consequences.”

Rogé also cautions clients set on being mortgage-free in retirement that once that loan is paid off, there’s no "undo" button. Before throwing a pile of money at that mortgage, consider the rate you’re paying and how those monthly payments fit into your budget. If your rate is low and your payments are manageable, keeping cash on hand for unplanned expenses could be a smarter bet.

Rogé also says that if you pay off your mortgage ahead of retirement and change your mind, it can be tricky to get a new loan.

"Banks want to see income, and few of them care much about the assets you hold," Rogé explains. (Though some asset-depletion mortgages may help high-net-worth retirees secure new financing.) Given today’s borrowing conditions, you’re likely to end up with a significantly higher interest rate.

Another thing to keep in mind is that maintaining liquidity doesn’t just give you more options for dealing with unplanned expenses. It could also be your ticket to fulfilling some of your retirement goals and maximizing years of good health, says Greg Corneille, CFP, wealth adviser and founder at Choice Wealth Management.

"When planning for retirement, we don't always think about the importance of maximizing those early retirement years in which we're likely to be most healthy and active,” Corneille says. "If money that could be used to pay off a mortgage can instead produce income in excess of the mortgage payments, then that extra income can be used to get the most out of those peak retirement years — travel, being active and pursuing things you enjoy."

There might be tax benefits to reap

In addition to liquidity, carrying a mortgage in retirement could mean scoring an extra tax write-off, Rogé says.

"Not every retiree itemizes now that the standard deduction has increased," he says. "But those who do can still claim the home mortgage interest deduction, which effectively lowers your mortgage rate on an after-tax basis."

Rogé says, "The cash to pay off a mortgage has to come from somewhere. Usually that means selling appreciated assets and paying tax on the gain, or taking an IRA distribution and paying tax on the distribution." That extra income might, in turn, trigger Medicare premium surcharges, known as IRMAA.

In other words, paying off your mortgage could create a secondary tax burden, whereas carrying it could help from a tax perspective.

You might out-earn your mortgage rate

The amount of interest you’re paying on your mortgage should help inform your decision. But Rogé says that if you’re sitting on a 3% mortgage rate or lower, you can pretty easily earn a higher return in a relatively low-risk portfolio, which makes the case for keeping the loan.

"You can generally earn a higher return on your investments than your 3% mortgage costs you. It isn't guaranteed, but even a 3-month T-Bill yields more than that mortgage rate today," Rogé says.

He also reminds borrowers that 3% interest rates aren’t available anywhere today and might not be for a long time. Before giving up that rate, see what your options are for making money off it.

Moreover, a fixed-rate 3% mortgage is a fantastic hedge against inflation. You get to pay back the bank over 30 years using "cheaper," depreciated dollars, while your home's equity theoretically rises with inflation.

You might have a better use for the money

If you have a nice amount of savings, paying off your mortgage might be do-able. But Rogé says that if you have a low mortgage rate, you could be better off doing something else with your money.

Many of his clients, for example, have large traditional IRA or 401(k) balances that will be subject to required minimum distributions (RMDs) and the taxes that come with them. Roth conversions can fix the problem, Rogé says, but the cash to pay taxes on a conversion needs to come from somewhere.

In that case, "the cash you would have used to pay off the mortgage can do that job instead," Rogé says.

It’s a matter of personal comfort

While keeping a mortgage in retirement has benefits, your decision should ultimately boil down to your specific financial situation and how you feel about carrying debt vs being debt-free.

Georgia Bruggeman, CFP, founder and CEO of Meridian Financial Advisors, says, "Whether to keep a mortgage or not in retirement is not just a math question but a comfort question."

"Some people," Bruggeman explains, "are just really uncomfortable carrying a mortgage. In these cases, it makes sense to develop a plan to just pay more toward the principal to pay off the mortgage sooner."

But if you’re not particularly bothered by the idea of retaining some debt, keeping your mortgage in retirement could give you the best of many worlds — more financial flexibility, tax breaks and the option to keep other funds invested for added growth.

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It happens daily. Someone joins a local social media group asking for recommendations for an estate planning attorney. In a matter of minutes, the comments start coming.

"You have a will — that's enough."

"You don't need an attorney."

"Just get a Lady Bird deed."

While most of the comments are probably coming from a good place, turning to social media for estate planning guidance overlooks one important fact: No two estate plans are the same. A strategy that worked well for one family may be inappropriate for another because everyone's goals, dynamics and circumstances are different.

Before taking advice from a fellow social media user, keep in mind that the most valuable part of estate planning isn't choosing the right documents — it's asking the right questions and seeking guidance from a licensed professional.

While there's a lot of misinformation on social media, the estate planning advice you'll get there isn't necessarily wrong — it might just be the wrong fit for your plan.

Consequences of poor estate planning

For example, let's consider a mother who signs a Lady Bird deed leaving her home equally to her children. This estate planning tool allows homeowners to transfer their property to chosen beneficiaries upon their death, maintaining complete control and ownership of the home while they're still living.

Unfortunately, one child passes before her, leaving their children behind. As the deed was never updated, it's unclear whether the surviving sibling or the grandchildren will get the deceased child's share. That decision could become an expensive battle that gets hashed out in court.

In many cases, parents know what they want to happen but don't update their estate plan to reflect those wishes as life changes. If plans aren't updated regularly, or properly drafted, the way assets are distributed may not align with what the owners intended.

Start by asking the right questions

The estate planning process doesn't begin with a document, it begins with asking the right questions.

To better understand your family, an estate planning attorney might ask questions such as:

• What do you want your plan to accomplish?
• If one of your children dies before you, who do you want to receive that child's share?
• Do any beneficiaries have a disability or receive government benefits?
• Could a beneficiary's divorce or financial difficulties affect an inheritance?
• Have there been any major life changes, such as marriages, divorces, births or deaths, since your plan was created?

The answers you give will help determine which estate planning tools are most appropriate.

Social media strategy

The next time someone online recommends an estate planning strategy, keep in mind that no one on social media knows your family's dynamics.

An estate plan that's worked well for someone else doesn't make it the right plan for you.

An estate planning attorney asks the questions that reveal what you want your plan to accomplish.

Simply having legal documents in place isn't enough, especially when they don't reflect your current wishes.

Once your plan is drafted, it should be reviewed periodically to ensure it aligns with your current circumstances.

Related Content

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• Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary Forms

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.

It's been said, "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 more than 100 trillion to spouses, children and other heirs — a phenomenon dubbed the "Great Wealth Transfer."

We'll see what 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.

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 a cushier post-career lifestyle. Some in that number might already be thinking several decades down the road when it's time to repay the gesture by passing along 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 from 1926 to 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."

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

That's where we'll start our search for stocks that you can use to build your own wealth, to the point at which 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 all the way to 1668 with the founding of Germany's Merck Group, which created the American affiliate we 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 (cancer fighter), 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? 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 important, 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."

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 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?

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. After a big leap in online buying adoption during COVID, e-commerce's penetration growth has moderated.

Walmart is also the second-largest online retailer in America. It's a distant second to Amazon (AMZN), but e-commerce accounts for roughly a quarter of Walmart's total U.S. sales, which 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. 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 if that continues, shareholders should keep enjoying higher and rising yields on cost.

Walmart also repurchases gobs of its own stock, spending from $2 billion to 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.

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." Amazon believes AWS alone could become a $1 trillion-a-year business.

The argument for AMZN to continue creating wealth in 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 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 went 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. 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. 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 such as the iPod, iPad and iPhone.

But the reason 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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Sometimes it seems people spend more time researching what smartphone to buy than how to strategize Social Security in retirement. Many don't realize that starting Social Security benefits too early or too late can cost you considerably.

How do people approach Social Security strategy?

Nearly one third of people claim Social Security benefits as soon as they turn 62, according to the Congressional Research Service. When they do that, they permanently reduce the dollar amount of their Social Security checks by 30%.

On the surface, this seems short-sighted. After all, a few years of being patient can get you the entire benefit you're entitled to, and if you wait a few years beyond that, you can even increase your checks by 8% for every year you wait until you turn 70.

While it's definitely true that you leave Social Security money on the table each month when you claim early, sometimes there are extenuating circumstances that make it a sensible decision.

Involuntary retirement is all too common. A person in their late 50s or early 60s, working a good job and on track for their retirement savings goal, suddenly loses their job. Paychecks stop, and finding comparable employment at that age is undeniably difficult.

In cases like that, people often need to claim Social Security early for financial survival.

Other reasons to file early include receiving a serious diagnosis that may cut your life short; if you're unlikely to live for 20 more years, it might make more sense to start benefits now so you can begin using that money immediately.

On the other end of the spectrum, about 10% of people wait until age 70 to claim Social Security, gaining them an additional 8% in their checks for each of the three years they delayed their benefits.

That's a tempting proposition. After all, where else can you get a guaranteed 8% boost in today's market? That's potentially a large amount of additional money you will collect, especially if you live into your 90s.

Market conditions can also influence early claiming. If the market drops 40% right as you retire, your $500,000 nest egg is suddenly reduced to $300,000. That can understandably cause you to panic and jump at the quickest way to make up for that lost money.

However, in doing so, you risk the market recovering before you actually need to tap into Social Security to survive. If the market recovers a few days after it falls, but you've already activated Social Security, the extra income you'd planned on by delaying benefits will be permanently inaccessible.

How should you strategize your Social Security benefits?

Many people think Social Security decisions are just about simple timing: Start benefits early and risk getting less lifetime money, or start them late and risk passing away before the extra income makes up for the money you didn't get while you were delaying benefits.

This is known as the "break-even analysis." How long do you need to live to make the shorter collection of larger checks net you more money than the longer collection of smaller checks? That analysis needs to consider much more than just the simple math of lifetime benefit calculation.

For example, every year, Social Security adjusts its benefit checks to account for inflation in what's called the Cost of Living Adjustment (COLA). If you get $1,400 a month in 2026 after starting benefits at age 62 and the COLA for 2026 is 3%, you will get $1,442 a month next year. If you delayed benefits until 70, you'd be making $2,480 a month in 2026, and the 3% COLA would increase that to $2,554 a month.

Those increases cause your benefits to compound dramatically over decades of retirement.

You also need to take taxation into account. Retirement accounts such as IRAs have required minimum distributions (RMDs). The government requires you to take a certain percentage of your retirement account as income each year after you turn 73. That income is taxable, which means the larger your RMD, the larger your tax bill will be.

In some cases, you can reduce your lifetime taxation by delaying Social Security benefits and living on your retirement accounts until you turn 70, as this means your RMDs will be smaller.

Seek professional guidance

This article is just a small taste of the often bewildering complexity of properly strategizing Social Security. Making this decision on your own is risky and could cost you lifetime benefit amounts, unnecessary taxation or both. It's important to work with a financial adviser to help chart the best path forward for your unique situation.

Related Content

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• Should You Claim Social Security Early or Late? A Financial Adviser Weighs In
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• 4 Steps to Take if You Lose Your Job Near Retirement

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.

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.

More Trillion Dollar Talk

• The Great Wealth Transfer Is Creating a New Generation of Family CFOs
• Could You Handle a Sudden Windfall?
• Manage an Inheritance Like a Pro in Just 7 Steps
• How to Organize Your Financial Paperwork for Your Heirs

My wife and I don't take the same vitamins. We don't follow the same workout plan. We don't have the same diet. (The last one is on me. I should eat healthier food.) Think of retirement planning for women and men as a daily vitamin. They should be different by design.

This can apply to both accumulation for retirement and retirement income planning. For today's purposes, we are going to focus on retirement income planning, where our practice, Exit 59 Advisory (I'm the president), is focused.

Below are four areas where planning for women and men should vary and a few things you can do to prepare.

Longevity planning

The obvious fact that women live longer than men is the first domino that falls and creates many of the less obvious dominos falling in its wake.

If you're going to live a longer life, lifetime income sources are more valuable. Receiving $10,000 per month is more valuable if you receive that amount for 30 years instead of 25. (Duh.) So, what can you do about it?

• Consider delaying claiming Social Security or, if you're married, having your spouse delay claiming. That 8% delayed retirement credit you get paid to wait becomes more valuable the longer you collect the benefit.
• Pension options should be considered in the context of a longer life expectancy: Pension formulas are typically based on unisex mortality tables, so your pension benefit does not change because you're a woman. This makes lump sums less valuable typically than lifetime income streams. And single life annuities, all else being equal, are more advisable than joint options that may make more sense for men.
• Consider other lifetime income sources: A private annuity will factor in the fact that you are a woman. However, if you're married, it may make sense to consider joint income annuities. If you just find comfort in knowing you'll have basic expenses covered for a long life, it's worth getting a quote from an insurance agent.

Asset allocation vs asset purpose

Because women live longer, they should have more of their assets in equities as a hedge. However, this increases sequence of returns risk — the risk that the market drops significantly as you start withdrawing.

It also requires riding an investment roller coaster that is twice as scary when you don't have a paycheck.

The concept of asset purpose is similar to a bucketing strategy in that it will allow you to take more risk with buckets of money that you won't need for a long time. You can carve out a portion of your assets for end-of-life and long-term care. Those funds can be aggressively invested, and likely the risk endured, because you probably won't need them for a longer number of years.

Things like travel funds, an expense that spikes early in retirement, would be more conservative. Expenses needed within two years in this strategy would be kept in cash to account for the possibility of a significant market downturn.

In the aggregate, you would end up with a higher equity allocation over time as you spend down the more conservative buckets early in retirement.

Long-term care

I always used to joke in the continuing education sessions I taught on this topic that men who go into a nursing home hate it and then die. Women go in, make friends and live forever. I was only sort of kidding.

Women are not only more likely to need long-term care, since they don't receive the reciprocal care from their husband who has already died, but they tend to need care for about twice as long as their male counterparts. Not fair, I know.

When we build out financial plans, the long-term care expense we stress-test is about twice as high for women as it is for men.

If you don't have a plan, or want to stress-test it yourself, you can access a free version of the planning software we use.

Estate planning that actually matters for you

It is notoriously difficult to get male clients to tackle estate planning. I suspect that's because it's something solely for the benefit of someone else.

If you are a married woman, you should feel more confident that you are doing estate planning for you — and if you don't, things are going to get messy.

I typically encourage our clients to review beneficiary designations annually and a written estate plan (wills, trusts, etc.) every five years or if something material has changed.

This will almost never feel like a priority until something bad has happened. It pays to spray for weeds before they take over your lawn. Trust me: I know.

I really am just scratching the surface on this topic and plan to come back to it in future columns.

Notably not mentioned is the impact of being a caregiver and the outsized impact and obligation this comes with for women.

In this context, it can take you away from your peak earning years. That impacts Social Security, pensions and investment accumulation, not to mention the reality that mental and physical strain can make it easy to take your eye off the ball (your own finances). The former is hard to prevent; the latter is also difficult, but preventable.

This all seems very unfair to women.

Here's the silver lining and forgive the generalization: Women are also better planners.

Related Content

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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.

A family vacation home isn't just an asset on a balance sheet. It's where holidays happen, where grandchildren learn to fish or ski, and where family traditions and values get passed down almost as much as the property itself.

That is exactly why a vacation home deserves its own planning conversation — one that is fully integrated into the rest of your estate plan. Without a plan, a home that was meant to bring a family together can end up doing the opposite.

Why a vacation home is different from other assets

A primary residence often has a relatively straightforward path: It's sold or one person inherits. A vacation home can be more complicated because several family members may expect to share it. And "sharing" a single piece of property among siblings, cousins or in-laws is rarely simple once the original owners are gone.

A few things make vacation homes uniquely tricky to plan for:

• Shared but unequal use. One sibling may visit every summer; another may live across the country and rarely use it. Yet costs and decisions are often expected to be split evenly.
• Ongoing expenses. Property taxes, insurance, maintenance and repairs don't pause when the owners pass away, and often the children were not aware of how much it cost to maintain the property. Someone has to keep paying, and disagreements over who pays what — and how much — can quickly become a source of family conflict. Sharing actual numbers related to expenses is essential to helping the next generation make sound decisions.
• Out-of-state or out-of-country property. A vacation home located in a different state or country from the owner's primary residence can create additional estate administration, probate or tax considerations, depending on the jurisdiction and how the property is owned.
• Sentimental value vs financial value. Family members don't always agree on whether the goal should be to keep the property in the family at almost any cost or to treat it as another asset that can be divided or sold.

What can go wrong without a plan

Families that don't address the vacation home specifically tend to run into the same handful of issues:

• Co-owners disagree about selling, renting or remodeling, with no mechanism to break a tie
• One branch of the family uses the property heavily while another resents paying a portion of the upkeep
• Ownership becomes diluted over generations as the property passes to more heirs, each owning a smaller fractional share, until decision-making becomes unworkable
• One child is left managing the property and bearing the costs, without authority to make important decisions or sell the home if necessary

The common thread is that simply deciding who gets the house isn't enough. A good plan also needs to address how the house will be owned, used, paid for and, eventually, sold or transferred.

Planning tools families can consider

There is no single "right" answer. The appropriate structure depends on your family's goals, the number of heirs involved and how long you hope to keep the property in the family. That said, a few tools come up often in this kind of planning:

• A trust. Placing the property in a revocable living trust can help it pass to heirs without going through probate and allows the original owners to set clear terms for how the property should be used, maintained or eventually sold.
• An LLC or family entity. Some families place the vacation home into a limited liability company or family limited partnership, with each heir holding a membership share rather than a direct deed interest. A manager can be appointed with primary decision-making authority. This can make it easier to set rules around usage and buyouts, and can simplify what happens if one heir later wants to sell their share.
• A co-ownership or usage agreement. Whether or not a trust or LLC is used, a written agreement spelling out how the home will be used and paid for is one of the most practical tools available. It can address a usage schedule, how expenses are split, what happens if someone wants out and who has final say on big decisions, such as major repairs or a sale.
• Gifting strategies. Depending on the value of the property and the family's broader estate plan, gifting an interest in the home during the owners' lifetime may be worth considering. For some families with significant estate tax exposure, more specialized strategies, such as a qualified personal residence trust (QPRT), may also be appropriate. These strategies can have meaningful estate, gift and income tax consequences, so they should be evaluated with your financial adviser, tax professional and estate planning attorney.
• An honest conversation about selling. Not every family will decide to keep the vacation home. Sometimes the most practical plan is to sell the property and divide the proceeds, especially if heirs live far away, have different financial situations, have challenging relationships with each other or simply don't have the same attachment to the property as the original owners.

Before deciding on your approach, there is a more basic question to answer: Does the next generation actually want the house?

Parents sometimes spend considerable time and money creating a structure designed to keep a vacation home in the family without first asking whether their children even want to own it together. One child may treasure the idea while another would prefer to receive other assets. Knowing your children’s preferences in advance can shape the entire plan.

Planning is more than paperwork

Legal documents matter, but they aren't the whole solution. Some of the most effective planning and conversations happen around the kitchen table, not in an attorney's office.

• Talk to the next generation before drafting anything. Find out who actually wants to keep the property. Some heirs may prefer receiving a like amount of assets instead of a portion of the family home.
• Put usage and expense expectations in writing. Even within a formal ownership structure, clear expectations give family members something concrete to point back to when questions arise. Some families even use an app or shared calendar to reserve times and track usage.
• Name a decision-maker or manager. Whether it is one heir, a rotating role or an outside property manager, someone should have clear authority to handle day-to-day issues.
• Revisit the plan periodically. Family circumstances change. Children marry, move or have children of their own, financial situations evolve and the property itself may become more expensive to maintain. A plan that made sense 10 years ago may not fit the family today.

The takeaway

A vacation home can carry sentimental meaning that a typical asset does not, which is exactly why it deserves a deliberate plan rather than an assumption that "the kids will work it out."

The right legal structure — whether a trust, an LLC, a usage agreement or some combination — depends on the family's specific goals. What matters most is starting the conversation early.

Begin by talking with the people who may eventually inherit the home. Ask whether they want it, how they envision using it and whether they're prepared to share the tangible responsibilities and realistic costs that come with ownership.

From there, you can build a plan around what the family actually wants rather than what you assume it will want. That conversation may ultimately do as much to preserve the family vacation home — and the relationships surrounding it — as any legal document.

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• Your Estate Plan Isn't 'Done' Until You've Completed These Five Steps, From an Estate Planning Attorney
• An Attorney's Guide to Your Evolving Estate Plan: Set-It-and-Forget-It Won't Work

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.

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 might come with distribution requirements that incur penalties if they're missed. The investments themselves could carry high fees or risks that don't make sense for your situation. Sorting it all out might 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 might 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. 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. Along the way, required minimum distributions (RMDs) might 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 might also be charging a fee.

Then there are the costs of sorting out the inheritance itself. You could 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."

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 might be the sneakiest of all: The cost of holding onto a portfolio 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 might 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.

More Trillion Dollar Talk

• The Best Stocks to Gift Your Grandchildren
• Critical Questions to Ask a Financial Adviser About an Inherited Stock Portfolio
• I'm a Retirement Editor, But My Parents' Estate Tripped Me Up with a Snake, a Gun and a Mystery Box

This story began with a phone call from brother and sister "Lisa" and "Michael," who are both in their mid-40s. Their call was like no other I have received in all my decades of law practice.

"Mr. Beaver," Lisa began, "we have read your column for years and need your help. What can we do to prevent our mother from going forward with plans that will wind up killing our father?"

I, of course, asked them to please be specific. What plans? What's going on?

A matter of Mom's self-image

"Dad has been a beloved pediatrician his entire career in our town," Michael explained. "Mom's self-image has always been as 'Dr. Y's wife,' which, in her mind, gave her social status and made her feel important, a somebody. She always refers to herself as 'Dr. Y's wife.' That is her identity. Recently, Dad was diagnosed with Alzheimer's, and over her protests and denial ('Those neurologists don't know a thing! Dad is fine!' she insists), he had to close his medical practice.

"It was as if someone turned off a switch for her. In her mind, Mom no longer has the celebrity status of being married to a physician beloved by his patients and their families. Instead, she told people that Dad had embarrassed her! It was so upsetting, Mr. Beaver!

"Mom told us, 'I can't face people. We have to leave town.' She made a down payment on a house hundreds of miles away, where they do not know anyone, and she plans to move there with Dad. This will cut him off from all his friends, people who would want to help them in any way possible. He does not want to move but has always been passive in their marriage."

Lisa added, "This move will isolate him and impair his mental and physical health at a time when he needs support from the many people in town who care. We need direct, actionable advice from someone who has experience with these issues, a road map to follow on things we could do that might alter her desire to move away."

Listen before taking action and lead with empathy

Data on migration patterns shows that roughly 22% of people move to a different county following a dementia diagnosis — a rate significantly higher than for other major health events.

To get some advice to help Lisa and Michael, I spoke with Boca Raton, Florida-based Jill Poser, founder of Life Care Concierge of South Florida, a nurse-led care advocacy practice. Recognized as an expert in aging life care management, private duty home care and life care planning, she holds the Certified Dementia Care Partner (CDCP) designation provided through the Alzheimer's Foundation of America.

Poser began our Zoom interview by pointing out, "A diagnosis of Alzheimer's or another form of dementia severely impacts a couple's relationship, often causing a deep loss of identity."

She offered these four recommendations to consider, focusing on addressing Lisa and Michael's mom's grief and identity, continuing care for their father and legal issues.

1. Focus on Mom's grief and her identity fears

Listen to Mom and ask her what she fears. What is the basis of those fears?

View her behavior as an expression of grief and belief that she is losing her identity as "Mrs. Dr. Y."

Approach her from a position of empathy rather than accusation.

For example, don't say, "You are so wrapped up in yourself! Moving away where he has no one will shorten his life."

Instead, show compassion and avoid using "you must" statements: "We know how much you love Dad. How can we support you?"

2. Explore aspects of identity that will strengthen her public role as Dr. Y's wife

Suggest she get involved in social activities, philanthropy, clubs or sports.

Say: "You both loved tennis, and Dad is an excellent pianist, so create sports and music scholarships in both your names for students at our local college. This way, both of you will be so appreciated for giving back to our town."

3. Preserve routine and familiarity for Dad where possible

The siblings should stress the importance of stability and how a familiar environment is crucial for someone with cognitive decline. Routines, longtime friends and known surroundings reduce disorientation and the risk of behavioral decline or wandering.

Point out that in town Mom has a support system that is already in place, but moving away would be a major disruption and could accelerate Dad's functional decline. The responsibility of caring for Dad would be entirely on her shoulders.

Be strategic about this. For example, try something like, "Mom, let's assume that you decide to remain in town. Tell us about the support you would like and think about who you already lean on in times of stress. These are good reasons to remain here. We know the burden will be significant, and you can count on us to be here to help in any way we can."

4. Discuss care management and seek professional support

"A dementia diagnosis is one of the heaviest, world-altering moments (for couples)," Poser says. "It often triggers a fight-or-flight response — the urge to run away, to leave town to escape the reality of the situation. That's a common human reaction to fear and grief."

She adds, "For that reason, among many others, these adult children should suggest hiring a care manager or appropriate professionals to evaluate their father's home-care needs, provide ongoing counseling for their mother and help facilitate difficult family discussions. And be ready to act as a neutral mediator in family discussions."

The key to preventing the move

My advice? Lisa and Michael need to immediately consult with an elder law attorney/conservator who, in most states, could try to obtain a court order that would prevent their mother from isolating their father.

At a hearing, a judge can consider why the move is proposed and whether it is in their father's best interest. Dad's opinion can also be considered, if he is able to express it.

Poser concluded our interview with this observation that should apply to all of us who were raised by loving parents: "Growing up, our parents protect us. Growing older, we protect them."

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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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.

For most of my career, I've watched Americans think about life insurance the same way. It's something you buy to protect your family if something happens to you. That's still true, but it's no longer the whole story.

Not only are people living longer, but roughly 11,000 Americans reach retirement age every day, according to the Alliance for Lifetime Income by LIMRA, and trillions of dollars are beginning to move from one generation to the next.

As a result, families are asking harder questions about retirement planning, how to make their savings last and how to leave something behind. Life insurance, when used well, can help answer all three of these questions.

Most insurers are now focused on developing products that solve real protection and long-term financial needs, with products that are less market-sensitive and more capital-efficient for the people who own them.

Consumers should view life insurance through the same lens. Before you buy a policy, here are five questions worth asking.

1. What do I want this policy to do?

Term life insurance is built to protect your family during your working years. It's affordable, straightforward and often the right first step. Permanent policies, including indexed universal life insurance, can do more. They build cash value over time that you may be able to access later in life.

It's important to be clear on what you want the policy to do. If you need coverage only for a set period, term may be the right answer. If you want a policy that can not only provide financial protection for loved ones, but also transfer wealth to the next generation, you are likely looking at a permanent product.

2. How does the cash value grow, and what happens when markets drop?

If you're considering permanent life insurance, ask how the cash value grows and what protects it when markets turn. Some products tie growth to a market index with a floor that limits losses in down years. Others carry more direct market exposure.

There is no single right answer. What matters is that you understand how your policy performs in both a good year and a bad one, how much risk you're comfortable taking and how that fits with the rest of your savings.

3. How can I use this policy during my lifetime?

A life insurance policy is not only for after you're gone. Many permanent policies let you access the cash value through loans or withdrawals while you're living. That flexibility can be useful as your financial needs change over time.

Also ask about riders, as some policies let you access part of the death benefit early if you face a chronic or serious illness. Those benefits can matter as much as the payout itself.

If you're working with a financial professional, ask them to explain how using a policy's living benefits could affect the death benefit.

4. How does this policy fit with everything else I'm planning?

Life insurance works best when it's part of a comprehensive plan. As part of your retirement planning, for example, assess your 401(k), your IRAs, your Social Security timing and all other assets together.

A financial professional can help you see how a policy supports the rest of the plan, including how it can:

• Protect a spouse
• Cover taxes on an inheritance
• Give you flexibility if one part of the plan doesn't perform as expected
• Help replace income that could be lost when a spouse passes away, including income sources for Social Security benefits

5. What do I want to pass on?

Life insurance has long been one of the most efficient ways to transfer wealth. In most cases, the death benefit is income-tax-free to your beneficiaries It can arrive at a time when families need it most, helping to replace lost income and provide financial stability during a difficult transition.

Think about what you want to leave behind and then ask whether your policy is built for that specific outcome.

Making life insurance part of your comprehensive financial plan is all about finding the right policy that can do real work for you over a long life, while helping to protect the people you care about most. Start with what you want and let the product follow.

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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.

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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For many retirees, few acronyms generate more anxiety than IRMAA.

Countless articles, videos and financial discussions warn retirees to stay below the next Medicare premium threshold. But what if avoiding an IRMAA surcharge causes you to pay more over the course of retirement?

In many cases, that's what can happen when annual tax planning takes priority over lifetime tax planning.

The income-related monthly adjustment amount (IRMAA) is the Medicare surcharge higher-income beneficiaries might pay for Medicare Part B and Part D coverage.

Because IRMAA is based on your modified adjusted gross income (MAGI) from two years earlier, many retirees become intensely focused on staying below the next surcharge threshold.

That focus is understandable — but it can also be expensive.

Many retirees reject Roth conversion strategies or other tax-planning opportunities solely because they might temporarily increase Medicare premiums. In some cases, avoiding an IRMAA surcharge can ultimately result in paying significantly more in lifetime taxes.

• The better question isn't: "How can I avoid IRMAA this year?"
• Instead, ask: "How can I minimize the total taxes and costs my family is likely to pay over the course of retirement?"

Those are two very different objectives.

Think beyond this year's tax return

Traditional tax planning often centers on reducing this year's tax liability.

Lifetime tax planning takes a broader view by evaluating how today's decisions affect taxes, retirement income and wealth in the next 20 to 30 years.

That distinction matters because strategies that intentionally increase taxable income today — such as Roth conversions — can sometimes reduce taxes substantially later.

Depending on the circumstances, converting part of a traditional IRA to a Roth IRA could:

• Reduce future required minimum distributions (RMDs)
• Lower taxable income later in retirement
• Reduce the taxation of Social Security benefits
• Provide additional tax-free assets for future spending
• Improve tax flexibility throughout retirement
• Reduce taxes for a surviving spouse
• Leave heirs with more tax-efficient inheritances

None of those benefits can be evaluated by looking at only one tax year.

Focus on the right goal

Key takeaway: IRMAA is an important planning variable — but it should rarely outweigh a well-supported strategy that meaningfully reduces lifetime taxes.

Understanding the tax valley

Many retirees experience a period after they stop working but before claiming Social Security and before required minimum distributions begin.

During these years, taxable income might be temporarily lower than it will be later in retirement.

Financial planners often refer to this as a tax valley — a window that might present an opportunity to recognize income at relatively favorable tax rates.

Consider a hypothetical married couple, both age 63, with $2 million in traditional IRAs.

Because they recently retired, they temporarily find themselves in the 24% federal income tax bracket. Their retirement income plan projects substantially higher taxable income once Social Security benefits begin and required minimum distributions become mandatory.

Suppose they convert $150,000 per year to Roth IRAs over several years. The conversions increase their taxable income enough to trigger higher Medicare premiums through IRMAA.

At first glance, paying higher Medicare premiums seems undesirable.

However, those same Roth conversions might significantly reduce future required minimum distributions, lower future taxable income, reduce taxes for a surviving spouse, create greater tax flexibility later in retirement and leave heirs with more tax-efficient assets.

If a temporary Medicare surcharge of several thousand dollars helps reduce projected lifetime taxes by six figures, many retirees would likely consider that an attractive trade-off.

The numbers — not the premium increase alone — should drive the decision.

IRMAA is one variable — not the objective

Retirement planning requires balancing many competing financial factors:

• Federal income taxes
• State income taxes
• Social Security taxation
• Required minimum distributions
• Medicare premiums
• Estate planning
• Legacy goals

Each deserves consideration, but the mistake is allowing any one of those to dominate the entire planning process.

IRMAA should be viewed the same way investors evaluate transaction costs or capital gains taxes. It is a legitimate expense to consider — but not necessarily a reason to abandon an otherwise beneficial strategy.

Waiting can be expensive

Many retirees assume paying less tax today automatically leads to paying less tax overall.

Unfortunately, that assumption often proves incorrect.

Traditional IRAs continue growing tax deferred. Larger account balances frequently produce larger required minimum distributions, which could:

• Push retirees into higher tax brackets.
• Increase the taxable portion of Social Security benefits.
• Trigger higher Medicare premiums later in retirement.
• Increase tax burdens after the death of a spouse, when the surviving spouse begins filing as a single taxpayer.
• Leave beneficiaries inheriting taxable retirement accounts that generally must be distributed within 10 years under current law.

Ironically, retirees who spend years trying to avoid modest IRMAA surcharges today might pay larger Medicare surcharges later because their required minimum distributions have become substantially larger.

Every recommendation should begin with a projection

No two retirees have identical circumstances.

The appropriate Roth conversion strategy depends on numerous variables, including expected investment returns, future tax rates, longevity, charitable giving goals, pension income, state taxes, estate-planning objectives and anticipated spending needs.

For that reason, sophisticated retirement planning relies on long-term projections rather than general rules.

Stopping a Roth conversion because it crosses an IRMAA threshold might feel prudent, but without a lifetime analysis, it's impossible to know whether that decision improves a retiree's long-term financial outcome.

The goal isn't to win this year's tax return

The Internal Revenue Service calculates your taxes one year at a time — your retirement plan shouldn't.

The objective of retirement tax planning isn't minimizing taxes this year — nor is it minimizing Medicare premiums this year.

The objective is maximizing after-tax wealth throughout retirement while preserving flexibility for future spending, charitable giving and legacy planning.

Sometimes that means staying below an IRMAA threshold.

Other times, the math clearly supports accepting a temporary Medicare surcharge because doing so produces substantially larger long-term tax savings.

The answer depends on the analysis — not the acronym.

The Centers for Medicare & Medicaid Services (CMS) establishes IRMAA as an income-based adjustment to Medicare premiums, while IRS rules govern the taxation of Roth conversions in the year they occur.

Neither rule suggests retirees should automatically avoid Roth conversions because of a temporary increase in Medicare premiums. Instead, both reinforce the importance of evaluating tax decisions within the context of an overall retirement income strategy.

The most ideal retirement tax plans rarely optimize a single year — they optimize a lifetime.

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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.

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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As an estate planning and elder law attorney for more than three decades, I can tell you that many people believe they've protected their assets by signing a revocable living trust.

They haven't.

Every year, I meet intelligent, financially successful families who have done almost everything right. They've accumulated retirement savings, worked with financial advisers, signed comprehensive estate planning documents and funded a revocable living trust.

Then one spouse develops Alzheimer's disease, Parkinson's disease or another chronic illness requiring years of home care, assisted living, memory care and eventually nursing-home care.

That's when they discover that their perfectly drafted trust is of no help, because it was designed to solve a different problem.

The ultimate question is not whether you have a trust. It's whether you have the right trust for the problem you need to solve.

A revocable living trust (often abbreviated as an RLT) is one of the best estate planning tools available. Unlike a will, an RLT trust protects your assets from probate and provides many other benefits, making it one of the most popular estate planning tools in the country.

But an RLT does not protect your assets from lawsuits or the potentially catastrophic expenses of long-term care.

Why doesn't an RLT protect assets?

The answer is simple.

An RLT works because you effectively remain the owner of all trust assets, and you retain complete control of those assets, including the ability to remove any or all assets from the trust at any time.

Because the assets remain yours, they remain available to pay any bills you owe, including long-term care bills. The assets in your RLT are treated as if they still belong to you and remain available to creditors, including the biggest creditor most people face in their lifetimes — a nursing home.

People often spend thousands creating and funding an RLT believing they've solved both the probate and the long-term care problem, when they've solved only the probate problem.

Unfortunately, many estate planning attorneys never explain this distinction because most don't practice in the area of Medicaid planning. They never discuss the irrevocable Medicaid Asset Protection Trust (MAPT) as an option.

As a result, many families discover the difference only after a health crisis, when planning options are limited.

What an RLT does well

None of this diminishes the value of an RLT.

I regularly recommend revocable living trusts to clients. My firm has prepared thousands of revocable living trusts.

A properly drafted and funded revocable living trust:

• Avoids probate
• Provides continuity if you become incapacitated
• Controls how and when beneficiaries receive an inheritance
• Keeps your affairs more private than a probate estate
• Can protect young or financially inexperienced beneficiaries from receiving large distributions outright
• Can provide ongoing asset protection to trust beneficiaries through the creation of spendthrift trusts, sometimes called dynasty trusts or beneficiary asset protection subtrusts

These are all important benefits. But none of them matter if you die broke because you spent all your money paying for long-term care.

As good as the revocable living trust is, in the past 15 years, my firm has prepared more MAPTs than revocable living trusts because once older clients understand the distinction, many choose a trust that not only avoids probate but also helps protect assets from long-term care costs.

We call our version the Living Trust Plus®. It's a proprietary MAPT system that we license to attorneys throughout the country to offer this type of planning to their own clients.

But most estate planning attorneys don't offer this type of trust planning. Helping clients protect their assets from long-term care costs is not on the radar of many estate planning attorneys.

Medicare won't pay the bill

Another common misconception is that Medicare will pay for long-term care. It won't.

Medicare doesn't pay a penny for long-term care. Families must rely on their own income and assets, long-term care insurance, certain veterans benefits or Medicaid, which is the biggest payor of nursing home expenses in the country.

What makes a Medicaid Asset Protection Trust different?

A MAPT is designed to solve not only the probate issue, but two additional problems. I call my version of the MAPT the Living Trust Plus because it protects your assets from probate plus lawsuits plus long-term care expenses.

Instead of retaining ownership of trust assets, you give up ownership and the ability to reclaim the protected assets. That creates the protection.

However, despite giving up ownership, you can retain a high degree of control of assets in the trust.

You can be the trustee of your own trust, meaning you can control how the assets are invested, whether your home gets sold and when assets get distributed to a trust beneficiary. You can even change the beneficiaries of the trust.

If you, as trustee, decide to distribute assets to a trust beneficiary, such as an adult child, that child can use the distributed money however they see fit, and you can't control what the child does with that money or have any type of agreement on how they use their money.

The child can spend the money for themselves, or they can, if they wish, spend the money for your benefit.

Planning using a MAPT must begin years before nursing home care is needed. The five-year Medicaid lookback period means waiting until a nursing-home admission or after a stroke could eliminate this planning opportunity.

Readers interested in learning more about Medicaid Asset Protection Trusts and other planning tools can find additional educational resources in our Elder Law Learning Hub.

For readers who want a more comprehensive discussion of probate avoidance, Medicaid Asset Protection Trusts and long-term care planning strategies, my bestselling book, Protecting Your Assets from Probate and Long-Term Care (Second Edition): Don't Let the System Bankrupt You and Your Loved Ones, explores these issues in greater detail.

Related Content

• Who Needs a Trust and Who Doesn't? A Financial Planner Explains
• Is Your Estate at Risk? The 5 Trusts You Need to Understand
• Revocable vs Irrevocable Trusts: It Comes Down to Control vs Protection
• What Assets Should Not Be Placed in a Revocable Trust?
• What You Need to Know About Long-Term Care Before You Need It

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.

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