By Sharon Kampner, MBA, CFP®, Senior Financial Planner at Mason Investment Advisory Services

Inheriting money is one of those things nobody really prepares you for. One day it’s abstract — a line in a will, a conversation you half-heard — and then suddenly it’s real, and it’s yours, and everyone seems to have an opinion about what you should do with it.

If you’re in your teens or 20s and you’ve just inherited money, this is for you. Not a lecture. Not a product pitch. Just an honest guide from financial advisors who’ve helped a lot of people navigate exactly this moment.

The most important thing we can tell you upfront: you have more time than you think. And the most important decision you can make right now isn’t financial — it’s who you talk to first.

First, Take a Breath

For most people, there is no financial emergency happening right now.

Unless you have immediate bills to cover or someone is actively pressuring you to move money somewhere (which is itself a red flag) nothing needs to happen today, this week, or even this month. The money isn’t going anywhere. Parking it in a money market account or leaving it exactly where it is while you get your bearings is a completely legitimate strategy.

A good rule of thumb while you’re grieving: don’t do anything that can’t be easily undone. That means avoiding decisions with penalties, lock-up periods, significant investment risk, or tax consequences you don’t fully understand. The timeframe for this is different for everyone — grief doesn’t follow a schedule. But the instinct to pause is almost always right.

What isn’t right is waiting indefinitely. Some inherited assets — particularly stock options — have expiration dates that won’t wait for you to feel ready. The goal isn’t paralysis. It’s making sure that when you do act, you’re doing it clearly, not reactively.

What You’re Actually Dealing With

An inheritance isn’t just money. It’s often a mix of things — cash, investment accounts, retirement accounts, stock, real estate, or in some cases, assets you’ve never heard of. Each one comes with its own rules, its own tax implications, and its own timeline.

Three things worth knowing early:

1. Inherited accounts have specific rules.If you’ve inherited an IRA or retirement account, there are IRS rules about when and how you have to take distributions. Getting this wrong can be expensive. Don’t touch these accounts until you understand the rules — or talk to someone who does.
2. Inherited assets may have a tax advantage. Assets you inherit outside of retirement plans generally receive what’s called a “step-up in basis,” meaning the cost basis resets to the value at the time of death. This is meaningful — it can significantly reduce the capital gains tax you’d owe if you sell. Worth understanding before you do anything.
3. Company plans may be time-sensitive.If you’ve inherited equity compensation — stock options, restricted stock units, performance shares — pay close attention to expiration dates. Sometimes action is required within a year or less. There could also be retirement plans that need to be addressed.  This is one area where waiting too long can cost you.

The Do’s and Don’ts When Inheriting Money

Do:

• Park everything in a safe, liquid account (money market or FDIC-insured savings) while you figure out next steps.
• Get a clear picture of what you inherited — account types, values, and any time-sensitive components.
• Make sure you have a power of attorney in place, if you don’t already.
• Work with a fiduciary financial advisor — someone who is legally required to act in your best interest, not their own. That’s how we work at Mason, and it’s the standard you should expect from anyone you trust with this.
• Your financial advisor and attorney can work together on your behalf. In complex situations, they should.
• Give yourself permission to do nothing for a month.

Don’t:

• Make any major financial decisions while you’re grieving.
• Tell too many people — well-meaning friends and family will have strong opinions, and not all of them will be in your best interest.
• Invest in anything someone is pitching you aggressively — urgency is almost always a sales tactic.
• Assume you need to do something dramatic to “make the most of it”.
• Spend a significant portion before you have a plan.

The Thing Nobody Talks About: Time is the Asset

Here’s what most people don’t fully appreciate until later in life — if you’re in your 20s and you’ve inherited a meaningful amount of money, you have something genuinely rare: time.

Compounding is the mechanism by which money grows on itself. The longer it’s invested, the more dramatically it grows. A million dollars invested in a diversified portfolio at a modest 7% average annual return doesn’t just grow linearly — it roughly doubles every ten years.

That means the single most powerful financial decision available to you right now isn’t which stock to buy or which fund to pick. It’s the decision to leave the core of this money invested in a diversified portfolio and let time do its work.

Most people who inherit money in their 20s and look back 20 years later don’t regret staying invested. They regret spending too much too soon — or worse, sitting in cash so long that the decision never got made at all.

A Framework That Works: Core and Explore

You don’t have to choose between investing responsibly and engaging with your money. A simple framework helps:

The core is the majority of what you’ve inherited — invested in a globally diversified, professionally managed portfolio aligned with your goals and timeline. You don’t touch it. You let it grow. This is the money that takes care of future you.

The explore account is a smaller portion — whatever feels right to you — that you use to engage with investing on your own terms. Individual stocks, ETFs, whatever interests you. The point isn’t performance; it’s learning. Most people need to make a few mistakes with money before the lessons really land. Better to make them with 5% than 100%.

The core does the work. The explore account does the teaching. Both have value.

Why the Advisor You Choose Matters (a lot)

Not all financial advisors are the same, and the differences matter more than most people realize.

Some earn commissions when they sell you certain products. That’s not inherently nefarious, but it does mean their recommendations aren’t always purely in your interest. Others charge a flat fee or a percentage of assets — and are legally required, as fiduciaries, to act in your best interest above their own.

When you’re young and inheriting money for the first time, you’re exactly the kind of client that commission-based advisors love. You don’t know what you don’t know. You’re trusting. And the decisions made now compound for decades.

We’re a fee-based, fiduciary investment adviser. We don’t sell proprietary products. Our top priority is to help you make good decisions with your money. We’ve been doing this for over 40 years — for clients at every stage of life, including plenty of people who came to us exactly where you are right now.

You Don’t Have to Figure This Out Alone

If there’s one thing we’d tell you, it’s this: you don’t need to have the answers before you ask for help. The best conversations we have with young clients start with “I don’t really know what I’m doing” — because that’s honest, and honesty is where good planning starts.

You’ve inherited something real. The question now is what you do with it — not today, not this week, but thoughtfully, over time, with someone in your corner who’s on your side.

When you’re ready to talk, we’re here. Click here to schedule a consultation with a Mason advisor >>

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Sharon Kampner, MBA, CFP®, is a Senior Financial Planner at Mason Investment Advisory Services.

The information provided in this article is for educational purposes only and does not constitute financial, legal, or tax advice. Please consult a qualified financial professional regarding your specific situation.