When 23-year-old Jackson from New York called into The Ramsey Show, he wasn’t asking how to spend his inheritance. He was asking what not to do with it. A few months earlier, he and his brothers had sold their parents’ home, leaving him with about $450,000. He had no debt, had just graduated from college, earned about $75,000 a year and was renting with his brother while planning a future move from Long Island to New York City. Must Read Yet instead of feeling empowered, he felt stuck. “I’m just wonde ...

Core Insights - A significant transfer of wealth, estimated at $90 trillion, is expected to occur to younger generations in the coming years [1] - Among those anticipating an inheritance, 50% view it as "highly critical" or "critical" for their long-term financial security [2] Financial Planning Considerations - Tax implications should be considered when receiving a large inheritance, with federal estate taxes applicable only for inheritances exceeding $13.99 million in 2025 [3] - Inheriting assets intended for sale benefits from a step-up basis, which resets the cost basis to the fair market value at the time of death, potentially reducing capital gains taxes [4] Wealth Preservation Strategies - A study indicates that 70% of family wealth is lost by the second generation, increasing to 90% by the third generation, highlighting the importance of prudent financial planning [5] - It is advisable to pay off debts, such as mortgages, but to avoid making large purchases that could lead to increased ongoing expenses [6] - Keeping the inheritance confidential, shared only with immediate family, is recommended to prevent external pressures for financial assistance or investment opportunities [7]