Sign in
Contact
Sign in
Contact
  • May 12, 2026

What Should I Do After Receiving an Inheritance? (w/Examples) + FAQs

After receiving an inheritance, you should pause before spending, secure the assets, confirm the estate has cleared probate under state law, understand the federal tax treatment under Internal Revenue Code §1014, and build a written plan with a fiduciary advisor, a CPA, and an estate attorney. Rushing creates tax traps, family fights, and creditor exposure that quiet planning avoids.

The core problem is that inherited money arrives during grief, and the IRS rules in Publication 559 treat different assets in very different ways. A cash gift from a checking account is not taxed to you, but an inherited traditional IRA is fully taxable as ordinary income when you withdraw it under the SECURE Act 10-year rule. Missing a deadline can cost you a 25% penalty under IRC §4974, and missing a disclaimer window under IRC §2518 can lock in a tax bill you never wanted.

A 2024 study by the Federal Reserve Survey of Consumer Finances found that roughly 1 in 5 U.S. households has received an inheritance, and the average transfer was about $46,200, while the top 1% averaged over $719,000. Most heirs spend or lose half of an inheritance within five years, according to research from Ohio State University’s Center for Human Resource Research. This article protects you from that outcome.

Here is what you will learn:

Your First 30 Days: The Immediate Checklist

The first month after an inheritance sets the tone for every tax, legal, and financial choice that follows. Federal law, led by the Internal Revenue Code, does not freeze deadlines just because you are grieving. State probate codes, like the California Probate Code §8200, force executors to lodge the will within 30 days of death. Moving slowly is fine, but moving blindly is dangerous.

Start by gathering the death certificate, the will, any trust documents, and recent account statements. You will need between 10 and 15 certified copies of the death certificate, because banks, brokerages, the Social Security Administration, and the IRS estate tax unit each want an original. Order them through the funeral director or the county vital records office. Losing time here delays every later step.

Next, confirm who the legal fiduciary is. That person is usually the named executor in the will or the successor trustee in a revocable living trust. Under Uniform Trust Code §813, trustees must give qualified beneficiaries notice within 60 days. If you are a beneficiary and have not received notice, request it in writing.

Open a dedicated “inheritance holding” account at a separate bank from your main checking. This gives you a cooling-off period, keeps the money from being spent by mistake, and creates a clean paper trail for the IRS. A FDIC-insured account protects cash up to $250,000 per depositor.

Secure the Assets and Freeze Activity

Immediately lock down anything that could be stolen, lost, or damaged. That means changing locks on an inherited house, notifying the homeowner’s insurance carrier per standard ISO HO-3 policy vacancy clauses, and securing vehicles, jewelry, and firearms. Vacant homes without notice can lose coverage in as little as 30 days.

Freeze the decedent’s credit with all three bureaus using the FTC deceased credit freeze guidance to stop posthumous identity theft. Contact the Social Security Administration to stop benefits and claim any survivor payments. The SSA claws back any check issued for the month of death, even if it arrived the day before.

Make a written inventory with photographs of every meaningful asset. Courts rely on this inventory during probate, and insurers rely on it for claims. Without it, you risk disputes among siblings and denied coverage.

Notify the Right Agencies and Institutions

You must tell a long list of parties that the decedent has died. That list includes the IRS via Form 56, banks, brokerages, life insurers, pension plans, the Department of Veterans Affairs, Medicare, Medicaid, employers, and utility companies. Each has its own form and deadline.

The consequence of skipping notifications is real. Medicaid in many states, under the Medicaid Estate Recovery Program rules, can claim assets from the estate for long-term-care costs paid on behalf of the decedent. If you distribute assets before clearing these claims, you can be personally liable as a fiduciary.

A common misconception is that the post office forwards everything. It does not forward government benefit notices reliably, and late responses look like fraud. Send certified letters with return receipts.

Resist the Urge to Spend

Financial advisors call the first year the “danger year.” Sudden-wealth syndrome is a recognized behavioral pattern, studied by the FINRA Investor Education Foundation, where heirs make emotional purchases they later regret. Park the money for at least 90 days.

Do not quit your job, do not buy a boat, and do not lend to relatives during this window. The CFPB warns that beneficiaries are prime targets for affinity fraud in the year after a death. A brief pause, paired with a written plan, protects decades of future security.

Understand What You Actually Inherited

Not all inheritances are taxed the same way, and not all assets transfer the same way. The IRS classifies inherited property by how it was titled and what kind of account held it. Cash from a checking account, a brokerage holding appreciated stock, a Roth IRA, a traditional 401(k), a life insurance policy, and a home each follow their own rule.

Cash inheritances are generally not income to you under IRC §102. Life insurance proceeds paid by reason of death are also excluded from gross income under IRC §101. Inherited traditional retirement accounts are different because the decedent never paid tax on that money. You pay it when you withdraw.

Understand titling before you touch anything. Joint-tenancy-with-right-of-survivorship assets pass outside probate under state law, and payable-on-death (POD) accounts pass automatically to the named beneficiary. Trust assets pass under the trust document, not the will.

Cash, Brokerage, and Real Estate

Plain cash is the simplest asset. You deposit it, report nothing as income, and move on. Still, the estate itself may owe federal estate tax if it exceeds the 2026 unified credit exemption, which is indexed annually.

Brokerage accounts and real estate are where the step-up in basis under IRC §1014 saves heirs enormous amounts. Your cost basis resets to the fair market value on the date of death. If your mother bought Apple stock at $5 and it was worth $190 on her date of death, your basis is $190. Sell it the next week for $192 and you owe capital gains on only $2 per share.

Real estate works the same way. Get a qualified appraisal as of the date of death to lock in the stepped-up basis. Without that appraisal, the IRS can challenge your basis during audit.

Retirement Accounts: IRAs and 401(k)s

Inherited traditional IRAs and 401(k)s are governed by the SECURE Act of 2019 and SECURE 2.0. Most non-spouse beneficiaries must empty the account within 10 years of the original owner’s death. Annual required distributions may also apply if the decedent had already started RMDs.

The consequence of missing a required distribution is a 25% excise tax under IRC §4974, reduced to 10% if corrected within two years. A named beneficiary cannot just ignore the account and hope it goes away. The IRS sees it through Form 5498 reporting by the custodian.

Spouses have a unique option. A surviving spouse can treat the IRA as their own and delay distributions until their own RMD age under the Treasury Regulations §1.408-8. This choice is nearly always better than the 10-year rule for spouses under age 73.

Life Insurance, Annuities, and Trust Distributions

Life insurance death benefits pass income-tax-free under IRC §101(a). But the proceeds are included in the decedent’s gross estate if the decedent owned the policy, which matters for large estates that cross the federal exemption.

Annuities are messier. Non-qualified annuity gains are taxed to the beneficiary as ordinary income under IRC §72. You can sometimes stretch payments over life expectancy, which softens the tax hit.

Trust distributions depend entirely on the trust language. A well-drafted dynasty trust can keep assets protected from creditors, divorce, and future estate taxes for generations. Read the trust before you cash anything out.

Taxes: Federal, State, and the Step-Up in Basis

Federal law imposes an estate tax on the estate, not the heir. For 2026, the unified credit exemption published by the IRS Estate and Gift Tax page shields a large amount per decedent, with a 40% top rate above the exemption. The Tax Cuts and Jobs Act sunset is set to cut that exemption roughly in half after 2025, so heirs of 2026 decedents should confirm the exact figure with a CPA.

Only six states impose a state inheritance tax: Iowa (phasing out), Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Twelve states and the District of Columbia impose a separate state estate tax. Maryland is the only jurisdiction that imposes both.

The step-up in basis is arguably the most powerful wealth-transfer feature in the tax code. Combined with the IRC §121 home sale exclusion, an heir who moves into an inherited home for two years can often sell it tax-free. Coordination with a CPA is critical.

The Federal Estate Tax Exemption

The executor must file IRS Form 706 within nine months of death if the gross estate exceeds the exemption. Portability elections under IRC §2010(c)(5) preserve a deceased spouse’s unused exemption for the survivor. Missing the portability election is one of the most expensive mistakes in estate planning.

An executor who fails to file Form 706 when required can face penalties under IRC §6651 of 5% per month, up to 25%. Personal liability attaches if distributions happen before tax is paid. File the return even when you think the estate is under the exemption if portability matters.

A common misconception is that Form 706 is only for billionaires. For a surviving spouse, filing Form 706 solely to elect portability can protect tens of millions in future exemption. The filing fee for a CPA is trivial compared to the benefit.

State Estate and Inheritance Taxes

A state estate tax is paid by the estate, like the federal tax. A state inheritance tax is paid by the beneficiary based on relationship. Under the Pennsylvania Inheritance Tax schedule, spouses pay 0%, lineal heirs pay 4.5%, siblings pay 12%, and everyone else pays 15%.

New Jersey’s Transfer Inheritance Tax uses “Class A, C, D, E” categories. Class A (spouse, children, parents) is exempt, while Class D (friends, distant relatives) is taxed up to 16%. Planning who inherits what can cut the bill dramatically.

Ignoring state tax filings creates liens on inherited real estate. In Pennsylvania, an unpaid inheritance tax becomes a lien on the real property under 72 P.S. §9143, blocking any sale.

Step-Up in Basis and Capital Gains

The step-up rule resets basis to date-of-death fair market value. For married couples in community-property states like California, under Cal. Prob. Code §100, both halves of community property get a full step-up when one spouse dies. That “double step-up” can eliminate decades of capital gains.

The consequence of losing the step-up is severe. If you let a parent add you to the deed during their lifetime, the IRS treats that as a gift, and you inherit their original basis, not the stepped-up value. Families routinely lose six-figure tax savings this way.

A real-world example: Maria inherits her father’s home in San Diego. Dad bought it for $80,000 in 1985. Fair market value on his death date in 2026 is $1,200,000. Maria’s basis is $1,200,000. She sells for $1,210,000 and owes capital gains on $10,000 instead of $1,130,000.

Three Common Inheritance Scenarios

These three scenarios reflect the most frequent fact patterns reported by the Consumer Financial Protection Bureau and by estate attorneys. Each uses a named person, a specific asset mix, and a real consequence.

Scenario 1: The Inherited Traditional IRA

James, age 45, inherits his father’s $500,000 traditional IRA in March 2026. His father was 78 and had already started RMDs. Under the SECURE Act, James must empty the account by December 31, 2036, and take annual RMDs based on his own life expectancy.

Beneficiary Decision Tax and Financial Outcome
Lump-sum withdrawal in 2026 Adds $500,000 to ordinary income, pushes James to the 37% bracket, roughly $185,000 federal tax plus state.
Even withdrawals over 10 years Spreads $50,000 per year, likely keeps James in the 24% bracket, total federal tax near $120,000 with planning.
Ignoring the 10-year rule 25% excise tax on the undistributed balance in year 11, plus full ordinary income tax on forced distribution.

James’s best move is a planned drawdown timed with low-income years, paired with qualified charitable distributions after age 70½.

Scenario 2: The Inherited Home with a Mortgage

Priya inherits her mother’s Chicago home worth $600,000 with a $150,000 remaining mortgage. Federal law under the Garn-St. Germain Depository Institutions Act of 1982 prevents the lender from calling the loan due on the heir of a relative.

Priya’s Choice Result Under Federal and Illinois Law
Move in and assume the loan Keeps original interest rate, qualifies for IRC §121 exclusion after 2 years of residence.
Sell the home within a year Stepped-up basis wipes out most capital gain, net proceeds about $450,000 after mortgage.
Rent the home out Rental income is taxable, but depreciation restarts on the stepped-up basis of $600,000.

Priya should title the property through probate or a transfer-on-death deed where Illinois allows it before refinancing.

Scenario 3: The Mixed $1 Million Estate

David and Sarah are siblings inheriting a $1,000,000 estate: $300,000 cash, $400,000 brokerage, $200,000 Roth IRA, $100,000 life insurance. Their father died a Florida resident, so no state estate tax applies under Florida Statutes §198.02.

Asset Category Sibling-Level Tax Treatment
Cash and life insurance Income-tax-free under IRC §102 and §101.
Brokerage account Full step-up in basis, minimal capital gains if sold soon.
Roth IRA 10-year rule applies, but all withdrawals are tax-free if account was open 5+ years.

Their best move is to keep inherited Roth dollars invested for the full 10 years to maximize tax-free growth under IRC §408A.

Protecting Your Inheritance from Creditors and Divorce

Inherited assets are usually separate property under state family law, but only if you keep them separate. The moment you deposit inherited cash into a joint account with a spouse, many states treat it as commingled marital property under cases like In re Marriage of Rossi (2001).

Creditor protection is equally fragile. The Supreme Court in Clark v. Rameker, 573 U.S. 122 (2014) ruled that inherited IRAs are not “retirement funds” under the Bankruptcy Code §522(b)(3)(C) and can be reached by creditors in bankruptcy. That single case changed inherited-IRA planning nationwide.

The fix is a spendthrift trust or an inherited-IRA trust drafted by an estate attorney. These structures keep creditors, divorcing spouses, and lawsuits at bay while still letting you enjoy the funds.

Keep Inherited Assets Separate

Deposit the inheritance into an account titled in your sole name. Do not add your spouse. Do not pay joint bills from it. Do not use it to improve a jointly owned home without a written post-nuptial agreement recognized under Uniform Premarital and Marital Agreements Act.

Commingling is the single most common way heirs lose separate-property protection. A divorce court in an equitable-distribution state can split anything that “lost its identity” as separate property. Keep statements, keep records, keep it separate.

A common misconception is that a prenup alone is enough. A prenup helps, but behavior after the inheritance arrives is what courts look at. Paper and practice must match.

Use Trusts and LLCs for Larger Inheritances

For inheritances above roughly $500,000, consider re-titling assets into an irrevocable asset-protection trust. States like Nevada under NRS 166, South Dakota, and Delaware offer domestic asset-protection trust statutes. These trusts require careful drafting and have 2- to 4-year “seasoning” periods.

Real estate is often held in a single-member LLC to limit liability from tenants or accidents. The LLC does not save income tax, but it shields other inherited assets from a slip-and-fall judgment at the rental property.

Cost matters. A properly drafted trust typically runs $3,000 to $10,000, and complex trusts cost more, according to the American College of Trust and Estate Counsel. Compare that to the potential loss in a lawsuit or divorce.

Disclaim What You Don’t Want

You can legally refuse an inheritance using a qualified disclaimer under IRC §2518. The disclaimer must be in writing, signed, and delivered within 9 months of the decedent’s death, and you cannot have accepted any benefit from the asset.

A disclaimer sends the asset to the contingent beneficiary as if you had died first. Heirs facing bankruptcy, Medicaid qualification issues, or simply wanting to pass assets to their own children sometimes disclaim.

A real example: Elena is in Chapter 7 bankruptcy when her aunt dies and leaves her $250,000. If Elena accepts, creditors take the whole amount under the 90-day lookback of Bankruptcy Code §541(a)(5). If she disclaims within 9 months, the money goes to her children, and her creditors cannot touch it in most circuits.

Build a Written Financial Plan

Treat the inheritance as a single, one-time chance to change your financial trajectory. A written plan built with a CFP® professional and a CPA keeps emotion out of the decisions. Without a plan, money leaks into lifestyle inflation within months.

Your plan should cover emergency reserves, high-interest debt, retirement contributions, tax-efficient investing, insurance, education funding, charitable giving, and estate planning. Each of these has its own federal framework, from the Employee Retirement Income Security Act of 1974 for retirement vehicles to IRC §529 for education accounts.

Write the plan down, date it, and sign it. A signed plan is harder to ignore than a mental intention. Review it annually.

Pay Down High-Interest Debt First

Credit card interest averages above 21% according to the Federal Reserve G.19 consumer credit report. Paying off a 21% balance gives you a guaranteed 21% return, which no investment reliably matches. Use part of the inheritance here first.

Do not pay off low-rate fixed mortgages below 5% too aggressively. That cash often does more work invested in a diversified portfolio earning a long-term expected return around 7% nominal, based on Ibbotson SBBI historical data. Balance liquidity against rate arbitrage.

Student loans are a special case. Federal student loans offer income-driven repayment and forgiveness under the Public Service Loan Forgiveness program. Paying them off early can waste future forgiveness.

Build Emergency Reserves and Fund Retirement

Hold 6 to 12 months of expenses in a high-yield savings account insured by the FDIC. This reserve stops you from selling investments in a market crash or tapping an inherited IRA early and triggering tax.

Maximize tax-advantaged retirement buckets next. In 2026, the IRS allows 401(k) contributions and catch-up amounts published on the IRS retirement plan limits page. Using the inheritance to cover living costs frees your paycheck to fully fund these accounts.

A Roth conversion can be powerful in a low-income year. Pay the tax now at a low rate, and future growth is tax-free under IRC §408A. Coordinate conversions with your CPA.

Update Your Own Estate Plan

An inheritance often pushes your own net worth into estate-plan territory. Update your will, your durable power of attorney under your state’s adoption of the Uniform Power of Attorney Act, your health care directive, and your beneficiary designations.

Beneficiary designations override your will. A forgotten ex-spouse on an old 401(k) will collect, no matter what the will says, as confirmed in Kennedy v. Plan Administrator for DuPont, 555 U.S. 285 (2009). Check every account.

Name a guardian for minor children, name successor trustees, and consider a revocable living trust to avoid probate. Probate in states like California can cost 4% to 7% of gross estate value, which a trust avoids.

Mistakes to Avoid

These errors show up again and again in tax court cases and probate files. Each one has a specific consequence that can be quantified.

  • Spending before probate closes. Distributions before creditor claims are settled make you personally liable under Uniform Probate Code §3-807.
  • Missing the 9-month disclaimer window. After 9 months under IRC §2518, a disclaimer becomes a taxable gift, triggering gift tax on the value.
  • Cashing out an inherited IRA immediately. A lump sum adds the whole balance to taxable income in one year and can cost 30% to 45% in combined taxes.
  • Commingling inherited cash with a spouse. Once mixed, family courts treat it as marital property, splittable in divorce in most states.
  • Skipping the date-of-death appraisal. Without it, the IRS can challenge your stepped-up basis and charge capital gains on phantom appreciation.
  • Leaving inherited retirement funds exposed to creditors. Under Clark v. Rameker, inherited IRAs are not protected in bankruptcy without a trust wrapper.
  • Forgetting the portability election. Failing to file Form 706 for a deceased spouse can waste millions in combined exemption for the surviving spouse.
  • Selling inherited stock at a loss without tracking basis. You may miss a capital loss deduction under IRC §1211 that offsets other income.
  • Ignoring state inheritance tax filings. States like Pennsylvania file liens on inherited real property until paid.
  • Using inherited money to lend to relatives. Interest-free loans over $10,000 trigger imputed interest rules under IRC §7872.

Key Entities You Will Work With

Several institutions and professionals shape your inheritance experience. Knowing their roles prevents miscommunication and fee-stacking. Each plays a distinct legal role.

The executor (or personal representative) is appointed by the probate court to administer the estate. The successor trustee administers a trust outside probate. The fiduciary is anyone acting in either role, governed by the prudent investor rule in Uniform Prudent Investor Act §2.

Your estate attorney drafts documents and gives legal advice, your CPA prepares estate and fiduciary tax returns like IRS Form 1041, and your CFP® professional integrates investment and financial planning. The IRS is the federal tax authority, and the state department of revenue handles state estate or inheritance tax.

Banks, brokerages, and insurance companies each have their own transfer processes. Retirement custodians follow ERISA plan documents and IRA custodial agreements. Title companies handle real estate transfers.

Pros and Cons of Common Inheritance Choices

Every choice you make about an inheritance carries trade-offs. The following pros and cons reflect typical outcomes across tax, legal, and behavioral dimensions.

Pros of parking the money first:

  • Stops emotional spending during grief, because the FINRA Foundation shows windfall losses peak in year one.
  • Preserves the step-up in basis for appreciated assets, because selling later still keeps the new basis.
  • Keeps creditor and divorce options open, because actions taken in the first 90 days are hardest to undo.
  • Buys time for a qualified disclaimer under IRC §2518, because 9 months is a long runway.
  • Gives room to hire the right professionals, because vetting a CPA and attorney takes weeks, not days.

Cons of parking the money first:

  • Cash in savings loses real value to inflation, which the Bureau of Labor Statistics CPI tracks.
  • Missed investment growth, because markets historically rise about two out of every three years.
  • Emotional strain of holding unsold inherited assets, because undecided assets cause family tension.
  • Continued maintenance costs on inherited property, because insurance, taxes, and upkeep do not pause.
  • Potential RMD deadlines still run, because inherited IRAs keep ticking under the SECURE Act.

Dos and Don’ts After an Inheritance

These rules synthesize federal tax guidance and decades of estate-planning practice. Each one maps to a specific statute or consequence.

Dos:

  • Do order 10+ death certificates, because every institution wants an original under bank BSA identity verification rules.
  • Do hire a fiduciary financial advisor, because SEC fiduciary rules require advice in your best interest.
  • Do get a date-of-death appraisal on real estate, because it anchors your basis under IRC §1014.
  • Do file the portability election on Form 706 for spouses, because the unused exemption is otherwise lost.
  • Do keep inherited funds in a separate, titled account, because commingling destroys separate-property protection.

Don’ts:

  • Don’t quit your job in year one, because lost wages plus lost health insurance often exceed investment returns.
  • Don’t lend to relatives without a written, interest-bearing promissory note, because IRC §7872 imputes interest.
  • Don’t distribute trust assets before reading the full trust, because trustees face personal liability for breach.
  • Don’t ignore inherited IRA deadlines, because the 25% excise tax under IRC §4974 is harsh.
  • Don’t trust verbal promises from other heirs, because only written agreements hold up in probate court.

Forms and Processes You Should Know

Several forms recur in almost every inheritance. Knowing them speeds up every conversation with your advisors. Each has a deadline and a consequence for failure.

IRS Form 706, United States Estate Tax Return is due 9 months after death if the estate exceeds the exemption or if the executor wants portability. Extensions are available with Form 4768.

IRS Form 1041, Income Tax Return for Estates and Trusts is due by the 15th day of the 4th month after the estate or trust year-end. An EIN from Form SS-4 is required first.

IRS Form 56, Notice Concerning Fiduciary Relationship alerts the IRS that you are acting for the decedent or the estate. Without it, the IRS keeps sending notices to the decedent.

Schedule K-1 from Form 1041 tells each beneficiary how much taxable estate income they must report. Beneficiaries must match the K-1 on their personal returns, or the IRS matching system flags the discrepancy.

State probate inventory forms vary by state but usually require a sworn listing within 60 to 90 days of appointment, as in Florida Probate Rule 5.340. Late inventories can lead to removal of the executor.

Recap of Key Court Rulings

Three cases shape modern inheritance practice more than any others. Each changed how heirs and advisors think about risk.

Clark v. Rameker, 573 U.S. 122 (2014) held that inherited IRAs are not “retirement funds” for bankruptcy protection. Heirs who take an inherited IRA and later file bankruptcy can lose the entire account, which pushed planners toward IRA-protection trusts.

Kennedy v. Plan Administrator for DuPont Savings, 555 U.S. 285 (2009) confirmed that ERISA plan beneficiary designations control, even when a divorce decree says otherwise. The case is the reason every inheritance conversation starts with “update your beneficiary forms.”

Estate of Clack v. Commissioner, 106 T.C. 131 (1996) and its progeny shape how QTIP trusts qualify for the marital deduction under IRC §2056. Drafting language must match the Treasury Regulations exactly, or the deduction fails.

Frequently Asked Questions

Do I have to pay federal income tax on inherited cash?

No. Inherited cash is excluded from gross income under IRC §102, though any income the money earns after you receive it is taxable to you.

Will I owe federal estate tax as the heir?

No. Federal estate tax is paid by the estate before distribution, not by heirs, under the IRS estate tax framework and IRC §2001.

Are inherited IRAs protected from my creditors?

No. The Supreme Court in Clark v. Rameker ruled inherited IRAs are not protected “retirement funds” in federal bankruptcy, so creditors can reach them absent a trust wrapper.

Can I stretch an inherited IRA over my lifetime?

No. Most non-spouse beneficiaries must empty the account within 10 years under the SECURE Act, though eligible designated beneficiaries keep the stretch.

Do I get a step-up in basis on inherited stock?

Yes. Under IRC §1014, your basis resets to fair market value on the decedent’s date of death, wiping out pre-death capital gains.

Can I refuse an inheritance?

Yes. A qualified disclaimer under IRC §2518 within 9 months of death lets the asset pass to the next beneficiary without gift-tax consequences.

Is life insurance I receive as a beneficiary taxable?

No. Death benefits paid because of the insured’s death are income-tax-free under IRC §101, though interest earned after death is taxable.

Must I share an inheritance with my spouse?

No. An inheritance is separate property under nearly all state laws, but only if you avoid commingling, per the Uniform Premarital and Marital Agreements Act.

Do I need a lawyer to settle a small estate?

No. Many states allow small-estate affidavits for estates under a set threshold, such as the California small-estate affidavit under Probate Code §13100.

Can I be held personally liable as executor?

Yes. Executors who distribute assets before paying taxes or creditors are personally liable under 31 U.S.C. §3713 and state probate codes.

Does Medicaid take my inheritance?

Yes. If the decedent received long-term-care Medicaid, the Medicaid Estate Recovery Program can claim from the probate estate before heirs receive anything.

Do I owe tax when I sell an inherited house?

Yes, but usually very little. The stepped-up basis under IRC §1014 limits gain to appreciation after the date of death, so quick sales often owe almost nothing.

Related reading