Mom left me $60,000, and my cousin keeps hinting. Where should it go?

The question

An illustrative letter.

The answer

My dear, I am so sorry about your mother. Grief and money arriving together is one of the hardest combinations there is, because every decision about the money can feel like a decision about her. Please be gentle with yourself. Nothing about this money has to be decided this month, and it is wise to make no large choices until the first heavy months have passed.

What should I do with the money right now?

Very little, and that is the point. Put it somewhere safe and easy to reach: a savings account at a federally insured bank or credit union, apart from your everyday checking. Let it earn a little interest while you catch your breath. Many people give themselves several months before deciding anything large. The money will wait, and you will choose better for having waited.

Do I owe tax on an inheritance?

As a general rule, an inheritance is not counted as income on your federal tax return. Any interest or growth it earns after it reaches you is taxable, as income from your own savings would be. Ohio has no inheritance or estate tax, though a handful of states do tax inheritances, so if your mother lived in another state, its rules apply.

One exception matters a great deal. If any of the $60,000 comes from your mother's retirement account, such as an IRA or a 401(k), the rules are different. Withdrawals from an inherited retirement account are usually taxed as income, and most adult children must empty the account within ten years of the death. How you take that money can change your tax bill, so a CPA is worth consulting before you withdraw it.

Why should my own future come first?

Because at 45, with $10,000 saved for retirement, you have real ground to make up, and your mother's gift is the best chance you may ever have to make it up in one step. Money saved at 45 has more than twenty years to grow before a typical retirement age. Money given away or spent now does not.

This is not selfish. It is the kind of choice that keeps you from needing help from your own family one day. I suspect it is also what your mother would have wanted for you.

How can the $60,000 work for me?

Many people work through it in order, like this:

• An emergency fund first. Three to six months of essential bills, kept in that insured savings account, so a lost job or a repair never sends you back into debt.
• Then any high-interest debt. Paying off a credit card that charges 20 percent or more gives you a guaranteed return few investments can match.
• Then your retirement. You cannot pour an inheritance straight into a retirement account, because contributions must come from earnings. But you can raise the share of each paycheck going into your 401(k) and use the inheritance to cover the gap in your take-home pay. For 2026, you can put up to $24,500 into a 401(k) and up to $7,500 into an IRA, as long as you have earnings at least that large.
• Something in her memory. Some people set aside a small part for something their mother loved, a trip she talked about or a cause she cared for. It can be a comfort.

Should I help my cousin?

That is yours to decide, and either answer can be loving. If you choose to help, a few things can protect both of you.

First, choose the amount before she asks, based on what you can give without harming your own future. Then give it freely, as a gift and not a loan. Money lent to family who are already struggling is rarely repaid, and an unpaid loan can sour a relationship far more than a clear gift ever would. If you would like the money to go to rent rather than elsewhere, some people pay the landlord directly.

Second, make it clear that this is a gift from your mother's legacy, given once, not the start of a monthly arrangement. You can be warm and firm at the same time: "I want to help with this, and this is what I can do."

On taxes, gifts up to $19,000 to one person in 2026 need no gift tax return at all. A larger gift may require a return, but with today's very high lifetime limits, it is unlikely to mean any tax for you. A CPA can confirm how this applies to you.

What if she is hurt by my answer?

She may be, at first. Grief makes everyone tender, and money can stir old family feelings. But you are not responsible for solving her finances, and helping her budget, or simply listening, can matter as much as money. If she is behind on rent again, a one-time gift will not fix the pattern on its own. Be kind, be clear, and let the relationship be about more than this.

Your mother spent her life building something to pass on. Using it to make your own future secure, and helping your cousin with an open hand within your limits, honors her twice.

One thing to do this week

Move the inheritance into an insured savings account of its own, and find out whether any part of it came from a retirement account.