How should taxes affect my decision about a large inheritance?

Question

I received a substantial inheritance and am deliberately avoiding large purchases or investments until I have a plan. Some choices could create taxable income or gains while others may not. Where should taxes fit in the decision without letting them dictate what I do with the inheritance?

Soradin · Accepted Answer

As part of the financial analysis, a large inheritance does not require an immediate investment decision. Use after tax and after fee numbers when comparing options because headline returns or payments can hide the real tradeoff. For the household plan, put the decision into a written plan that shows how it affects retirement, taxes, emergency reserves, and other family goals.

How should taxes affect my decision about a large inheritance?

Soradin

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