Almost anything your parents owned can pass to you when they die: the family home, bank and brokerage accounts, retirement savings, life insurance, vehicles, jewelry, heirlooms, digital files, and even cryptocurrency. Federal law keeps the value of what you inherit out of your taxable income, so receiving property is not treated as earnings on your return.1Office of the Law Revision Counsel. 26 USC 102 – Gifts and Inheritances What actually reaches you, though, depends on debts your parents left, how they held title to each asset, and whether a will, a beneficiary designation, or state law controls the transfer. So the real answer to what you can inherit from your parents is: nearly everything they owned, minus what their debts and the transfer rules take out along the way.
Real Estate
A parent’s real estate is usually the most valuable thing you’ll inherit. That category covers the family home, vacation property, rental buildings, and raw land. County recorder offices keep deed records you can search to confirm what your parent owned, and the local assessor’s property tax records fill in parcel details and assessed value.
How a house reaches you depends on how your parent held title. Property held in joint tenancy with right of survivorship passes automatically to the surviving co-owner no matter what the will says. A will only controls property held in your parent’s name alone or as a tenant in common. When joint tenancy applies, updating the record is usually as simple as filing a death certificate and an affidavit of survivorship with the county.
The tax side matters just as much as the title side. Inherited real estate gets a stepped-up basis: the property’s tax basis resets to its fair market value on the date of your parent’s death rather than the price your parent originally paid.2Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent If your parent bought a house decades ago for $80,000 and it’s worth $400,000 at death, your basis is $400,000. Sell it for $410,000 and the capital gain is only $10,000. An appraisal dated as close to the date of death as possible is worth paying for, because it locks that number in.
What About the Mortgage?
Inheriting a house doesn’t mean inheriting it free and clear. Any mortgage balance stays attached to the property. Federal law blocks lenders from calling the loan due just because the borrower died and a family member inherited the home.3GovInfo. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions If you plan to live there, you can keep the existing mortgage and continue payments on the original terms without refinancing into your own name. If you don’t want the house, the estate can sell it and pay off the loan from the proceeds.
Bank Accounts, Brokerage Accounts, and Investments
Checking and savings accounts, CDs, money market funds, and brokerage holdings are usually the easiest assets to locate. Mail, tax returns, and prior-year 1099 forms will point you to the institutions involved. Each one has its own claim process, but the basics are the same: a certified death certificate, a transfer form, and your ID.
Many of these accounts skip probate entirely. If your parent attached a Transfer on Death or Payable on Death designation, the funds pass directly to the named person. The will doesn’t override a valid beneficiary designation, which catches families off guard when the two documents disagree. The designation wins.
Investments carry the same stepped-up basis as real estate.2Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent Shares your parent bought at $10 that are worth $150 on the date of death can be sold at $150 with no capital gains tax owed.
Retirement Accounts
401(k) plans, IRAs, and similar accounts pass through beneficiary designations, not through the will. If you’re the named beneficiary, contact the plan administrator or custodian with a certified death certificate to begin the claim.4Internal Revenue Service. Retirement Topics – Beneficiary
Retirement accounts come with mandatory withdrawal rules the other assets don’t, because the money inside has never been taxed. How quickly you have to take it out depends on who you are:
- A surviving spouse has the most flexibility and can roll the account into their own IRA, delaying withdrawals until their own required beginning date.
- An adult child or other non-spouse beneficiary generally must empty the account within 10 years of the parent’s death. Withdrawals can be spread across those years or taken all at once, but the balance has to reach zero by December 31 of the tenth year.4Internal Revenue Service. Retirement Topics – Beneficiary
- A minor child can stretch withdrawals over their life expectancy until reaching the age of majority, when the 10-year clock starts.
- A disabled or chronically ill beneficiary can take distributions over their own life expectancy and avoid the 10-year deadline.
Missing a required withdrawal triggers a 25 percent excise tax on the shortfall, dropping to 10 percent if you catch the mistake and take the correct distribution within a correction window.5Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans Calendar reminders are cheap insurance against that penalty.
Life Insurance
Life insurance proceeds paid because of your parent’s death are excluded from your gross income.6Office of the Law Revision Counsel. 26 USC 101 – Certain Death Benefits A $500,000 policy pays $500,000, with no federal income tax owed. Like retirement accounts, the money goes to whoever the policy names, regardless of what the will says. File the claim with the insurer using the policy number and a certified death certificate. Most insurers offer a lump sum, an annuity, or a retained asset account that earns interest until you withdraw. If you can’t find the paperwork, the National Association of Insurance Commissioners’ Life Insurance Policy Locator and your state’s unclaimed property office can help track lost policies down.
Vehicles, Jewelry, and Everything Else Physical
Everything tangible that isn’t real estate falls into this bucket: cars, furniture, jewelry, artwork, coin collections, firearms, household goods. Most of it has no formal title. The main exception is motor vehicles, which require you to retitle them through the state motor vehicle agency.
Parents sometimes leave a personal property memorandum with their will, listing who gets specific items. A memorandum isn’t a will itself, but most states treat it as a binding guide when the will references it. These lists tend to head off family conflict over sentimental objects. High-value items like fine art, antique furniture, and gemstone jewelry should be professionally appraised so the estate has an accurate inventory and you have a clean tax basis if you ever sell.
Digital Assets and Intellectual Property
A parent’s digital footprint can hold real value: cryptocurrency wallets, domain name portfolios, online storefronts, digital media libraries. The practical problem is access. Without private keys for a crypto wallet or login credentials for an online account, these assets can be functionally lost even though they legally belong to the estate.
Most states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act, which gives executors and trustees legal authority to manage a deceased person’s digital property. Legal authority doesn’t crack passwords, though. If your parent used a password manager, the master credential unlocks everything. If not, you may have to petition each platform individually, which is slow and sometimes fruitless. A conversation with aging parents before anything happens is worth more than any legal remedy afterward.
Intellectual property transfers to heirs too. Copyright protection lasts 70 years beyond the author’s death, so royalties from books, music, or artwork can keep flowing for decades. Patents and trademarks pass the same way. Look for licensing agreements, royalty contracts, and registrations with the U.S. Copyright Office or Patent and Trademark Office to identify what your parent held.
Are You on the Hook for Your Parents’ Debts?
Usually, no. You are not personally responsible for your parents’ debts just because you’re their child.7Federal Trade Commission. Debts and Deceased Relatives Debts are paid from the estate’s assets before heirs receive anything. If the estate runs short, creditors absorb the loss.
There are exceptions. You can be held responsible if you co-signed a loan with your parent, if you’re a surviving spouse in a community property state, or if you were legally responsible for settling the estate and didn’t follow proper probate procedure.7Federal Trade Commission. Debts and Deceased Relatives Debt collectors sometimes contact family members and imply they’re obligated to pay. In most cases they aren’t, and agreeing to pay a debt you don’t owe can create a new obligation that didn’t exist before.
Medicaid Estate Recovery
One debt that surprises families is Medicaid recovery. If your parent received Medicaid benefits after age 65 or during a nursing home stay, federal law requires the state to seek reimbursement from the estate after death.8eCFR. 42 CFR 433.36 – Liens and Recoveries That claim often targets the family home.
Federal rules carve out protections. The state cannot pursue recovery while a surviving spouse is alive, or while a child under 21 or a blind or disabled child of any age survives. A son or daughter who lived in the home for at least two years before the parent entered a nursing home and provided care that delayed institutionalization may also be protected.8eCFR. 42 CFR 433.36 – Liens and Recoveries Outside those safe harbors, Medicaid recovery can consume a large share of what would have been your inheritance.
If Your Parent Dies Without a Will
When a parent dies without a valid will, state intestate succession law decides who inherits. The specifics vary, but the priority ordering is consistent: a surviving spouse first, then children, then grandchildren, then parents and siblings of the deceased. An unmarried parent’s estate typically splits equally among the children.
Intestate rules only govern assets that would have passed through probate. Anything with a beneficiary designation, joint-tenancy property, and assets inside a trust move outside this system. A parent who named beneficiaries on every account and held the house jointly may leave very little for intestate rules to touch, even without a will.
The downside of dying intestate is that state defaults rarely match personal wishes. There’s no way to leave specific items to specific people, no way to pick an executor, no ability to disinherit anyone. Verbal wishes that were never written down have no legal weight.
Taxes on What You Inherit
Three different taxes can touch an inheritance, and most heirs worry about the wrong ones.
Income Tax
The value of inherited property is not taxable income. Federal law specifically excludes gifts, bequests, and inheritances from gross income.1Office of the Law Revision Counsel. 26 USC 102 – Gifts and Inheritances Inheriting a $300,000 house or a $50,000 brokerage account adds nothing to your tax return. Income the property later produces is a different story: rent from an inherited house, dividends from inherited stocks, and withdrawals from inherited retirement accounts are all taxable in the year you receive them.
Federal Estate Tax
The federal estate tax hits only very large estates. For 2026, the exemption is $15,000,000 per person, so no federal estate tax is owed unless your parent’s total estate tops that threshold.9Internal Revenue Service. What’s New – Estate and Gift Tax Amounts above the exemption are taxed at rates up to 40 percent. When an estate tax return is required, the executor files IRS Form 706 within nine months of death, with an optional six-month extension.10Internal Revenue Service. Instructions for Form 706 For the vast majority of families, this tax never comes into play.
State Inheritance Tax
Five states charge a separate inheritance tax paid by the person receiving the property rather than by the estate: Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Rates run from zero for close family members, who often qualify for full exemptions, up to 16 percent for distant relatives or unrelated beneficiaries. If your parent lived in one of those states, check whether your share triggers a state tax even if no federal tax applies.
How the Property Actually Reaches You
Every asset takes one of two paths: around probate, or through it.
Assets That Skip Probate
Property with a valid beneficiary designation, jointly held property with right of survivorship, and assets inside a living trust all transfer outside court. You deal with the institution directly: a death certificate and your ID at the bank for a payable-on-death account, a claim form to the insurer for a life insurance policy. These transfers usually take a few weeks.
Assets That Go Through Probate
Everything else runs through probate, the court-supervised process for validating the will, paying debts, and distributing what’s left. The executor named in the will, or a court-appointed administrator if there’s no will, files a petition with the local probate court to open the case. Filing fees, executor compensation, and attorney costs come out of the estate before heirs see their share. Timelines range from a few months for a simple estate to over a year for complicated or contested ones.
Many states have a simplified procedure for smaller estates that lets heirs collect property with a sworn affidavit instead of a full probate case. Dollar thresholds vary widely, generally from around $20,000 to over $150,000 in total asset value. Qualifying estates save real time and money.
Contesting a Will
If you believe your parent’s will doesn’t reflect their true intentions, you can challenge it in probate court. Courts don’t overturn wills lightly. Recognized grounds include lack of mental capacity when the will was signed, undue influence from someone who pressured your parent, fraud or forgery, and failure to meet the state’s formal requirements such as proper witnessing. Challenges have to be brought early in probate, and the burden of proof rests on the person contesting. Will contests are expensive and emotionally draining, so weigh the evidence carefully before filing.