If you inherit a retirement account there will be many factors to take into consideration. In most cases, the inheritance of a retirement account is the result a significant personal loss. So, while you are navigating through a myriad of emotions, you also must also find a pathway through the thicket of tax implications, financial planning, and estate planning. Though some choices can result in a huge tax bill, others can create long-term wealth. So, this is not the time to react in haste.

Your first step should be to consult a financial advisor. There are so many rules and different circumstances that come into play that you will need some professional guidance.

Generally speaking – the tax implications of inheriting retirement accounts can be boiled down to two words: “it depends.” It depends on the age of the person who passed, the type of retirement account that was inherited, and who the beneficiary is in relation to the deceased. Different rules apply to spouses, other family or friends, and trustees or executors.

Despite all the different scenarios, however, there are typically 3 or 4 options you can choose if you inherit a retirement account. Here is a brief overview:

Open a beneficiary IRA to accept the transfer of inherited retirement money – This allows the money to keep growing tax-deferred. Depending on the age of the deceased, the beneficiary may be required to start taking “Required Minimum Distributions” (RMDs) which are specified amounts that must be withdrawn. It’s important to note that the timeline for taking RMDs is dependent on the age of the person who passed, not the age of the person who inherited the account.

SPOUSES ONLY – Transfer inherited retirement money to your own account – Spouses are able to transfer an inherited IRA into their own IRA and the distribution rules will be the same as if the IRA had always belonged to them.

Take a lump sum – If you take a lump sum payment from the IRA, you must be aware of the tax implications – which will depend on the type of IRA inherited and whether contributions were pre- or post-tax. If the lump sum is large enough, it may push you into a higher income tax bracket.

Choose not to take it – In some cases, you can pass your inheritance on to an alternate beneficiary. If you choose this action – technically called “disclaiming” the account – you must act within 9 months of the passing.

Again – every option comes with a different set of rules, circumstances, and results. If you inherit a retirement account, consult with a financial adviser to carefully explore all of your options, before you make a short-term decision that could have a long-term impact.