6 of the Best Things You Can Inherit (That Most People Don't Think About)

Many people assume that an inheritance automatically equals an instant windfall, and in some cases, this is true. But what's more important than "how much" you receive is "what" you receive. Some items are simply less glamorous but are more practical and life-changing than you may first imagine.

So, rather than hope to be an heir to timeshares, vacation homes, or complicated businesses, consider how amazing it would be to inherit these assets. These often underappreciated gifts can lower your financial stress and be worth more than face value over time.

Roth IRA

Considered the "crown jewel" of inheritances, this plan allows contributions to be made with after-tax dollars. So, qualified withdrawals are essentially tax-free.

If you receive one of these IRAs, the tax burden has largely been handled. In many cases, you have up to 10 years to spend the account or take a lump sum, and you can let it continue to grow for as much of that decade as you choose. If the owner was already taking required minimum distributions (RMDs), you may also have to continue taking distributions during that period, depending on your beneficiary status and current IRS rules.

When it's time to withdraw, the money doesn't trigger the taxes that a traditional IRA would.

Appreciated stocks with step-up

What the original owner paid for a stock is the "cost basis". For example, if your mom bought stock for just $10 in the 70s, that $10 is the cost basis. If that same stock is now worth $100—and she sold it—she would have to pay capital gains tax on the $90 difference in value.

However, if you inherit appreciated stock, the cost basis resets. So, the value when you inherit it today ($100) is the cost basis; selling it for $100 wouldn't trigger the same capital gains tax. This is called a 'step‑up in basis' and is why inheriting a stock can be such a good gift.

Note that this step-up doesn't apply to retirement accounts, just mutual funds, stocks, ETFs, and other taxable investments. And if you sell the investment anytime after you inherit it, your own capital gains tax may apply in relation to your cost basis (the value it was at the time you received it).

A paid off primary home

If you're the only heir and the home is in a reasonable location, an inherited home can be life-changing. That's because real estate also usually gets a step-up in basis, so all the increased value of the home over the years gets wiped out for tax purposes.

You could sell soon after inheriting with little or no capital gains, or you could choose to live in it yourself. And since it's not a timeshare, vacation home, or rental, you don't have to deal with landlord laws, mortgage fees, or complicated sharing with siblings.

A well-funded trust fund

A trust is a legal arrangement that holds assets for beneficiaries; it's designed to simplify things by possibly bypassing probate delays and spell out exactly how the money will be given. If done well, a trust reduces family conflict and guesswork and can speed up asset distribution.

Even a clear, smaller trust may be better than a larger asset stuck in legal tangles and informal promises. Since heirs have the right to understand the trust terms, working with a real estate attorney or advisor can help them interpret the rules.

A healthy life insurance payout

Assuming no strings attached, a life insurance payout can go directly to named beneficiaries and is generally income-tax-free at the federal level. Every dollar becomes more valuable than taxable income assets.

This means fast access to cash with often no probate and the freedom to pay off high-interest debt or cover living expenses. Some heirs choose to reinvest the money into high-growth accounts for future goals. While very large policies may trigger estate taxes, most families will never hit these thresholds.

529 plans

These educational accounts may not be as large as some assets that heirs receive, but they are surprisingly uncomplicated. They can be passed to another beneficiary within the family for education expenses, and can sometimes be rolled into a Roth IRA for the beneficiary (under certain conditions).

This makes a simple kids' college money bucket a long-term wealth tool. And if you do spend them on college, it moves the high cost of tuition off your plate, helping you to avoid expensive student debt.

Bottom line

The smartest inheritance may not be the flashiest, and most loved ones would prefer a gift with fewer strings and more flexibility. Whether it's a Roth IRA, 529 plan, or the step-up basis on a home, thoughtful estate gifts can make a big difference in the lives of the ones left behind.

If nothing else, these "best" inheritances can inspire you to grow your wealth so you can share with those who matter most. You may even have some of these assets and just need a way to document where they will go. That's where an experienced estate planner or lawyer can step in to see that your wishes are fulfilled.

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