You can deposit a large cash inheritance in a savings account, either through a check or direct wire to your bank. The bigger question is what you should do with it once it's deposited. While that is ultimately your decision, it helps to have a plan. The more prepared you are before you get the inheritance.
Deposit the money into a safe account
Your first action to take when receiving a lump sum is to deposit the money into an FDIC-insured bank account. This will allow for safekeeping while you consider how to make the best use of your inheritance. The maximum coverage for each FDIC-insured account is $250,000.
Overall, putting the inheritance money into a retirement account is an efficient way to save the money for a solid future.
Gifts and inheritance Personal income types
If you received a gift or inheritance, do not include it in your income. However, if the gift or inheritance later produces income, you will need to pay tax on that income.
Another key difference: While there is no federal inheritance tax, there is a federal estate tax. The federal estate tax generally applies to assets over $13.61 million in 2024 and $13.99 million in 2025, and the federal estate tax rate ranges from 18% to 40%.
Can IRS seize inherited property? Yes, the IRS can seize inherited property for unpaid taxes after following its standard process of notices. Can the IRS take inheritance money? Yes, the IRS can take inheritance money for unpaid taxes.
Can inherited assets be transferred directly into my account? Yes, this can be done using a check or a direct wire to your bank account.
Do you need to declare inheritance money? No. Any tax due will normally be taken out of the deceased's estate, and the executor will usually take care of it. This means you won't need to declare inheritance money to HMRC – an inheritance isn't classed as income, and therefore isn't taxable.
Local banks or credit unions
Visit your local branch and talk to a teller to deposit your cash. Different banks might have varying policies on the maximum amount of cash you can deposit at once, so be sure to check with your local bank beforehand.
Banks must report your deposit to the federal government if it's more than $10,000 to alert the federal government to monitor for potential financial crime.
That said, an inheritance of $100,000 or more is generally considered large. This is a considerable sum of money, and receiving such a windfall can be intimidating, especially if you have limited experience managing excess funds.
For the inheritance process to begin, a will must be submitted to probate. The probate court reviews the will, authorizes an executor and legally transfers assets to beneficiaries as outlined. Before the transfer, the executor will settle any of the deceased's remaining debts.
As an executor, you must provide a formal accounting at least once a year, but beneficiaries can request an informal probate accounting in California at any time. When they do, you must produce it.
If due, an inheritance tax is applied only to the portion of an inheritance that exceeds an exemption amount. Above that threshold, tax is usually assessed on a sliding basis. Rates typically begin in the single digits and rise to between 15% and 18%.
Typically, the estate will pay any estate tax owed, with the beneficiaries receiving assets from the estate free of income taxes (see exception for retirement assets in the chart below). As a beneficiary, if you later sell or earn income from inherited assets, there may be income tax consequences.
Paying down debt, investing the money or growing an emergency fund are all solid options that can bring you closer to your financial goals. Even if you opt to do nothing with it right away, there are savings alternatives to ensure that it doesn't get mismanaged in the interim.
Many people worry about the estate tax affecting the inheritance they pass along to their children, but it's not a reality most people will face. In 2025, the first $13,990,000 of an estate is exempt from federal estate taxes, up from $13,610,000 in 2024. Estate taxes are based on the size of the estate.
Note that under a separate reporting requirement, banks and other financial institutions report cash purchases of cashier's checks, treasurer's checks and/or bank checks, bank drafts, traveler's checks and money orders with a face value of more than $10,000 by filing currency transaction reports.