Toronto, ON - January 26, 2026 - Cardinal Point Wealth Management has released guidance outlining the financial, tax, and legal considerations individuals should evaluate when receiving an inheritance. For many families, inheritances arrive during emotionally challenging periods and often involve complex decisions with long-term consequences—particularly when assets, beneficiaries, or residency span both Canada and the United States.

While inheritances are often viewed as financial windfalls, Cardinal Point notes that critical decisions made in the months following receipt can dramatically and negatively affect tax exposure, marital property treatment, and long-term financial security.

Allow Time Before Making Major Decisions

Receiving an inheritance frequently coincides with the loss of a loved one, making immediate decision-making difficult. Experienced financial professionals generally advise taking time to deliberate before committing inherited assets to long-term investments or major purchases.

Temporarily placing inherited funds in a high-interest savings account or low-risk money market fund can allow beneficiaries to preserve capital while assessing their priorities and options. Then they can evaluate liquidity needs, tax implications, and whether assets were received outright or through a trust structure.

Align the Inheritance with Financial Priorities

Beneficiaries must decide how the inheritance supports their broader financial planning strategy.

• Saving and investing: In Canada, this may include funding RRSPs or TFSAs, or investing in non-registered accounts. In the U.S., beneficiaries may prioritize IRAs, employer plans, or taxable brokerage accounts. Large inheritances can significantly alter asset allocation and risk exposure, particularly if concentrated in a single security or property.

• Debt reduction: Paying down high-interest debt often provides a guaranteed financial benefit, while low-interest debt decisions require comparison with expected after-tax investment returns.

• Discretionary spending: Many individuals allocate a modest portion of an inheritance to travel, home improvements, tuition, or family experiences. Large purchases such as vacation properties require careful modeling of ongoing costs and cross-border ownership implications.

Understand Cross-Border Tax Treatment

Tax rules governing inheritances differ significantly between the two countries.

In Canada, beneficiaries generally do not pay tax on inherited assets. However, the deceased’s estate may owe capital gains tax on appreciated assets deemed disposed of at death. Income or gains generated after inheritance are taxable to the recipient.

In the United States, federal estate tax applies at the estate level, not to beneficiaries. While the federal exemption remains high in 2025, several states impose estate or inheritance taxes with much lower thresholds. Inherited assets typically receive a step-up in cost basis, reducing future capital gains taxes.

Cross-border beneficiaries must also comply with foreign reporting rules, such as IRS Form 3520 for certain foreign inheritances or CRA Form T1135 for specified foreign property.

Protecting an Inheritance within Marriage

A frequent concern for beneficiaries is whether inherited assets remain protected in the event of marital separation or divorce.

• Canada: Inheritances are generally excluded from family property if kept separate and traceable. But commingling funds or using them for a matrimonial home can eliminate this protection.

• United States: While laws vary by state, inheritances are typically considered separate property if not commingled. But joint filling or shared use can convert inherited assets into marital property.

Maintaining separate accounts, clear documentation, and—where appropriate—formal domestic agreements can help preserve inherited wealth.

Turning an Inheritance into a Long-Term Legacy

Beyond technical considerations, many beneficiaries consider how to use an inheritance in a way that reflects family values. Common approaches include strengthening long-term financial stability, supporting children’s education, establishing charitable structures, or preserving family assets such as homes or heirlooms with clear succession plans.

Viewing an inheritance as part of an ongoing legacy, rather than a one-time event, often leads to more deliberate and sustainable decisions.

Key Takeaways

• Avoid major financial decisions immediately after receiving an inheritance.

• Align inherited assets with long-term financial goals and risk tolerance.

• Understand differing Canadian and U.S. tax treatment of inherited assets.

• Keep inherited property separate to preserve marital protections.

• Cross-border reporting and compliance requirements may apply.

• Thoughtful planning can transform an inheritance into a lasting legacy.

What This Means for Beneficiaries

For individuals receiving an inheritance—especially those with assets or family connections in both Canada and the United States—early planning is essential to wealth preservation. Decisions around taxes, ownership structure, and integration with existing finances can have lasting consequences. A coordinated approach helps ensure inherited wealth supports both present needs and long-term family objectives.

About Cardinal Point Wealth Management

Cardinal Point Wealth Management provides integrated financial, tax, and estate planning services for clients with assets in Canada and the United States. The firm focuses on Canada–U.S. financial planning, serves as a Canada–U.S. financial advisor for cross-border families, and specializes in cross-border financial planning and cross-border transition planning. Its multidisciplinary team assists clients in navigating complex financial transitions with accuracy, compliance, and long-term perspective.

Disclaimer: This press release may contain forward-looking statements. Forward-looking statements describe future expectations, plans, results, or strategies (including product offerings, regulatory plans and business plans) and may change without notice. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements.

Media Contact
Company Name: Cardinal Point Wealth Management, ULC
Contact Person: Kris Rossignoli, Senior Private Wealth Manager
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Country: United States
Website: http://www.cardinalpointwealth.com/