There's a lot of chatter about the Great Wealth Transfer — as much as $124 trillion that’s predicted to pass between generations over the next couple of decades. And much of that is likely to end up in the hands of women.
If you’re fortunate enough to inherit a windfall, be prepared to be patient. For starters, it can take time to gather the necessary documentation and navigate the legal niceties of inheritance (see our article on where to start if you've received an inheritance). And once you have the money in hand, "rule number one is don’t go out and spend it all," says Alexandra Armstrong, a certified financial planner and author of On Your Own: A Widow’s Guide to Emotional and Financial Well-Being.
Among people who inherit, there’s a tendency to want to do one of two things, says Armstrong: pay off the mortgage on the house or take your dream vacation. But before you do anything, consider the tax implications. For instance, if you have a low-interest-rate mortgage that’s tax-deductible, you may be better off keeping it and putting the bulk of your inheritance to work in other ways. If you inherit your spouse’s IRA, you can roll the money into your own IRA. But if anyone other than a spouse inherits an IRA — say, an adult child or a sibling — the money must be withdrawn over 10 years, and payouts are taxable.
