Inheriting $3 million.

"We just inherited $3 million. Now what?"It feels like a windfall. It's a ten-year decision.

A parent passes, and $3 million arrives: an IRA, a taxable brokerage account, and a home. It feels like a windfall. It's actually a ten-year tax decision that starts the day it lands.

The ripple

An inheritance is one event. What it becomes depends on decisions made over the decade that follows, not the week it arrives.

A parent leaves $3 million: an IRA, a brokerage account, a home

The inherited IRA must be emptied within 10 years (the SECURE Act rule)

Each withdrawal stacks on top of the heir's own income for that year

The taxable account and home get a basis step-up, so their gains are erased

Which dollars to spend first becomes a tax decision, not a preference

Low-income years open room for Roth conversions; high-income years close it

Beneficiaries, titling, and the heir's own estate plan all need updating

What you keep

One inheritance. A decade of decisions, each one changing the next.

Same inheritance, two outcomes

Uncoordinated

The inherited IRA is left to sit, then emptied in year ten, a single punishing tax spike.
The stepped-up brokerage account is sold first, wasting the very step-up that made it tax-free.
The low-income years that were open for Roth conversions pass unused.
Beneficiary forms and the heir's estate plan go untouched for years.

Coordinated

The 10-year drawdown is smoothed to fill brackets rather than spike them.
Stepped-up assets are used thoughtfully; the tax-heavy IRA is drawn with intent.
Low-income years are used for Roth conversions while the door is open.
Beneficiaries and the estate plan are updated the same season, not someday.

Same inheritance. Years of difference in what it becomes.

In the room, across a decade rather than a single April: CPA, estate attorney, and the investment plan.

Financial decisions should not surprise one another.

More from the library: Selling a business · Buying a second home · The $600,000 conversation

See the ripple on your own numbers.

The Tax Diagnostic starts with your state and bracket and shows what a coordinated approach could be worth for you, in about two minutes.

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Illustrative and educational — not investment, tax, or legal advice. This is a hypothetical scenario. Outcomes depend on your own facts and on current law; the SECURE Act inherited-account rules, basis step-up, and Roth conversions carry their own conditions and require individualized tax and legal advice. Driftwood coordinates with your CPA and attorney; it does not provide tax or legal advice. Driftwood Wealth is a registered investment adviser; Form ADV Part 2A and Form CRS are available directly; the firm’s public record is at adviserinfo.sec.gov. Privacy Policy · Terms of Use.