Yes, …. Impact.  Because there are timelines and taxes.

Hopefully, you’ve been saving all along. Putting money into an emergency fund, a 6-12 month income fund should there be a job loss, and, of course, a retirement fund. Along with all that, maybe you’ve been saving for a house, or children or college. Perfect.

Now, someone dear has passed and left you a sum of money. Maybe it’s in a 401 plan, or another retirement vehicle. Maybe it’s in a bank account.  You need to know what happens when it now become yours. Do so as soon as possible by calling the company or bank where the money is held.

You need to tell them you have inherited it. Ask if it needs to be changed into your name and how. Ask how long you have to disburse the funds and any tax ramifications when you do. Ask if, in the case of a 401 and the RMD amount has already been accessed by the deceased person (they started that at age 72), there are rules there for you to follow on how it will be disbursed to you and when. Or, in some cases, you can have the part of the account left to you re-titled to your name, and continue the account that way, hopefully adding to it yourself as time goes on.

You shouldn’t wait too long before you alert the company(s) that the person is deceased. You will, of course, need proof. Most retirement plans have beneficiaries in place set by the owner of the account. You will need their death certificate, and your ID info. Have this ready when you make the call.

Hopefully, before you start taking the money, you have a sound financial goal for it. Surely your benefactor wouldn’t mean for you to spend it foolishly…. after all, they more than likely struggled somewhat to save it. So, treat it wisely and make your benefactor proud with your choice(s).