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### Preparing for the Great Wealth Transfer
We are in the midst of the Great Wealth Transfer, a predicted titanic pass-down of assets from older generations to Gen X, Millennials, and Gen Z. According to financial research firm Cerulli Associates, $124 trillion will change generational hands through 2048.
That said, not everyone will receive a staggering amount of money—or any inheritance at all. Much of this wealth is concentrated within a small portion of the population. However, if you are inheriting wealth, you’ll have important choices to make. Planning ahead can help you avoid costly mistakes.
“This is something that’s really powerful, that could really propel your financial security,” says Fahmin Fardous, a certified financial planner with Zenith Wealth Partners in Morristown, New Jersey. “Let’s look at where you are, and let’s look at what your goals are in life.”
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### Prepare Before the Inheritance
Receiving large sums of money and losing a loved one are both experiences that can throw you for a loop, emotionally and practically.
“Grief can lead to rushed decisions,” says Scott Bishop, a CFP and co-founder of Presidio Wealth Partners in Houston. Establishing goals, understanding inheritance terms, and researching tax implications can put you in a better place to make smart choices, he adds.
In other words, laying the groundwork now prepares you for the hard work ahead.
“Emotionally, I often see people swing to extremes—either refusing to spend any money because it feels like ‘blood money,’ or spending too quickly because they don’t feel deserving of it,” says Mitchell Kraus, a CFP with Capital Intelligence Associates in Santa Monica, California.
No matter how you feel—happiness, sadness, or general overwhelm—it’s probably normal. “I’ve seen stress, I’ve seen excitement,” Fardous notes. Many clients have never had this kind of money before and don’t know what to do with it.
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### Avoid Common Inheritance Mistakes
All those emotions can make it hard to act thoughtfully on newfound wealth, especially if it’s life-changing money. One key mistake to avoid, Fardous says, is mentally spending the cash before you actually receive it.
“Whenever I see someone who’s received a windfall, they think of this wish list they’ve had,” Fardous explains. “And this money is getting spent in their head before it’s even hitting their bank account.” This mindset can derail long-term financial security before the inheritance has fully settled.
“Don’t bank on an inheritance until you have it,” Kraus advises.
Some people seek professional advice—which is good—but end up with advisors pushing high-commission products, which is not ideal. If you consult a professional, consider working with a fiduciary. This means they are legally obligated to act in your best interest.
Be sure to understand the difference between a fee-based financial planner, who may receive commissions for recommending products, and a fee-only planner, who is paid solely by clients.
People sometimes feel pressured by friends or family to take hasty action. Kraus recommends establishing a “90-day decision-free zone,” a period during which you avoid making any irreversible financial moves.
“It gives you a chance to reset, to think about what’s going on and how it’s happening, and that takes a lot of the pressure off,” Kraus says.
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### Have the Hard Conversations Early
Knowing what to expect can help you prepare for taxation and distribution. For instance, if you inherit an IRA, there are specific rules about when and how distributions must be taken. Taxes may also be due on what you receive.
If you have a relationship with your loved one where you can discuss what you might inherit, do so.
“I can’t tell you how many families I see where parents plan to leave a lot of money to their kids, but the kids worry about their parents’ financial well-being and save money just in case their parents need help,” Kraus says.
Having these conversations ahead of time can help. Ask about what you might inherit: money, property, investments, or any restrictions on those assets.
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### Make a Plan for Inherited Wealth
After taking time to absorb your emotions and situation, experts recommend focusing on a few priorities.
Consulting a professional about potential tax liabilities should be one of your first steps, Bishop advises.
Next, consider building an emergency fund and addressing any debt.
“We don’t want to allocate anything toward other goals without you having an emergency fund of three to six months’ worth of expenses in a high-yield savings account, and then making sure you don’t have any high-interest debt,” Fardous says.
After that, think about your goals. Do you want to contribute to your children’s college education? Buy a house? Boost your retirement savings?
“The first thing you don’t want to do is go out and buy three Ferraris,” Bishop jokes.
Think carefully about what’s important to you and what this money means for your life.
Where do you want to go next? Could this inheritance allow you to retire early—and do you want to?
“Think of it as an opportunity to reset your life,” Bishop says. “Big checks invite big mistakes. It’s important to slow down, have a plan, and then execute.”
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*Kate Ashford, WMS™ writes for NerdWallet.*
Email: [email protected]
Twitter: [@kateashford](https://twitter.com/kateashford)
https://www.sgvtribune.com/2026/01/24/great-wealth-transfer/