The First 30 Days A Short List

In the first two posts, I made the case for slowing down. This week is the other side of that coin. A handful of things really shouldn't wait, and getting them right early makes everything after easier.

The list is short on purpose.

Here's something that surprises a lot of people. An inheritance usually belongs to the person who received it, not to the marriage. In New Jersey, inherited property is generally kept out of the split if a marriage ends, and most states treat it in a similar way.

The catch is what happens next. I've watched it play out more than once. The check arrives, and it goes straight into the joint checking account. Or it goes toward the mortgage on a house in both names. It feels natural, even generous. It's family money, and you're a family.

Names and details changed. This is a blend of situations I've seen.

But once inherited money is mixed in with joint money, it can lose that separate status. Untangling it later is hard, and the job of proving what was yours usually falls on you. None of this is about expecting the worst in a marriage. It's about not giving up an option by accident.

That's the spirit of this list. Not big decisions. Just a few early moves that keep your options open.

1. Find out exactly what you inherited, and how

Money passes in different ways. Some accounts go straight to a named beneficiary. Others pass through the estate or a trust. Ask the attorney or executor for a simple list: each account, roughly what it holds, and how it's coming to you.

2. Gather the paperwork

Get several certified copies of the death certificate. Custodians, banks, and insurers will each want one. Keep statements, the attorney's contact information, and any letters from account firms in one folder.

3. Park cash somewhere simple

As I said in post 1, a savings or money market account is fine while you get your bearings. Simple beats clever right now. One more detail: keep it in an account in your name alone for now. Rules on marital property vary by state, so if you're married, a short conversation with a family law attorney before you combine anything is time well spent.

4. Learn the rules on inherited retirement accounts

This is the one item where waiting can cost you. Inherited IRAs and 401(k)s come with rules about how and when the money must come out. The rules depend on your relationship to the person who died and on their age, and some situations require annual withdrawals. You don't need to act yet. You do need to know which rules apply to you. Post 4 covers this in more depth.

5. Don't sign what you don't understand

You may get calls, letters, or friendly offers to "help" move your money. Some are fine. Some aren't. A good rule for now: if someone you didn't choose is pushing paperwork, slow down and ask questions before you sign.

6. Tell fewer people than you think

This isn't about secrecy. It's about protecting your space to think. Once people know, opinions and requests tend to follow. We'll talk about handling those in post 6.

7. Ask whether a state inheritance tax applies

Most people never owe tax just for inheriting. But a handful of states have an inheritance tax, and New Jersey is one of them. Here, a spouse, children, grandchildren, and parents are exempt. A brother, sister, niece, nephew, or friend can owe tax, with rates that run from 11% to 16% depending on the relationship and the amount.

Two details catch families off guard. The tax is due within eight months of the death. And banks can hold back part of an account until the state signs off, even when no tax is owed. Ask the executor early whether this applies to you. I'll cover it in more depth later in the series.

That's it

Notice what's not on the list. Deciding whether to keep the house. Choosing investments. Paying off debt. Giving to family. Those all belong in the Later bucket, and they'll be better decisions in a few months.

One small next step

Ask the attorney or executor for that simple list of accounts. It's the single document that makes the rest of this easier. Next week, in Post 4, we'll take item four off this list and walk through inherited retirement accounts and the clock that comes with them.

This post is general education, not individualized tax advice. Talk with a tax professional about your situation.

Securities and Advisory services offered through LPL Financial, A Registered Investment Advisor, Member FINRA/SIPC.