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After receiving an inheritance, you need to determine how to incorporate those assets, whether stocks, bonds, real estate, or some other asset, into your finances. Consider these points during the process:

 Determine what you will receive and when. Inheritances typically don’t come in the form of one check. You’re likely to receive pieces of different assets over a period of time. Work with the estate’s executor to determine what assets you’re likely to receive and when you can expect them.

 Resist the urge to spend the inheritance.
You may be tempted to spend the inheritance on a new car, an extravagant vacation, remodeling your kitchen, or other things you never had the money for. First take a look at how the inheritance would help with longer-term goals, such as funding retirement or your children’s college educations.

 Decide how the assets fit in with your current assets. If an inheritance is significant, it may drastically alter your asset allocation. First, you need to decide if your original asset allocation is still appropriate and then determine how to move closer to your targeted allocation.

 Understand the tax implications of inherited assets. Until 2010 (when the estate tax is repealed), inherited assets receive a step-up in basis to market value at the date of the original owner’s death. Any gains from the sale of inherited assets are subject to the long-term capital gains tax rate, regardless of how long you personally owned the asset. Thus, selling inherited assets soon after receiving them typically won’t result in large capital gains taxes. If you need to sell assets to bring your asset allocation in line, you should first consider inherited assets before selling your own assets.

 Review each inherited asset to determine whether it is appropriate for your financial goals. Consider selling any asset that won’t meet your financial goals or that you don’t have the expertise to manage. Don’t keep inherited assets for sentimental reasons. If you decide to sell, you’re not questioning the investment capabilities of the person who gave you the assets.