MW 'I live in a state with no inheritance tax': Is it legal to deposit $150K cash into my bank account?

By Quentin Fottrell

'The money is not currently in a bank account and it is not part of an estate'

"I assume I can make this deposit legally and that there are no tax consequences." (Photo subject is a model.)

Dear Quentin,

Is it legal to deposit a large cash inheritance - say, $150,000 - into a bank? The money is not currently in a bank account and it is not part of an estate - let's assume it's just cash in an envelope - and I live in a state with no inheritance tax. I assume I can make this deposit legally and that there are no tax consequences. Am I correct? If so, must I provide a recent death certificate?

Lone Ranger

Related: 2025 has been one hell of a year. Consumers should expect more 'silent pain' in 2026.

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.

Depositing more than $10,000 into your bank account will likely trigger a mandatory currency-transaction report to both the Internal Revenue and Financial Crimes Enforcement Network.

Dear Ranger,

I don't know why or how it was withdrawn from a bank and put in an envelope rather than an electronic transfer - and I'm not sure I need or want to know.

However, depositing more than $10,000 into your bank account will likely trigger a mandatory currency-transaction report to both the Internal Revenue and Financial Crimes Enforcement Network under the Bank Secrecy Act of 1970. This is standard procedure to detect any alleged money laundering; it does not mean that you have done anything wrong, as long as you haven't - well - done anything wrong. In other words, there should be a paper trail if/when you are audited.

If you were to deposit this money in $10,000 increments to avoid triggering an alert? That's "structuring" and it's illegal. This occurs if you deliberately break up financial transactions to avoid triggering mandatory reports required by law. Authorities can spot structured transactions during a Bank Secrecy Act audit, a Form 8300 review or an income-tax audit. While there are similarities between transactions designed to avoid different reporting requirements, investigators will look at them with a fine-tooth comb.

You could be asked for probate documents, a letter from the executor and/or a death certificate to confirm this cash is from a legal source. However, that would be less likely if the cash was already legally yours and not being transferred directly from a deceased person's account. In most other cases, you would be required to submit a certified copy of the death certificate to a financial institution in order to transfer or deposit inherited funds into your account. Banks use these official documents to confirm an individual's passing.

Inheritance tax vs. estate tax

As you note, only a handful of states levy an inheritance tax - Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania - and the amount owed typically depends on the heir's relationship to the deceased. While there is no federal inheritance tax, the IRS does impose a federal estate tax, and the exemption threshold is adjusted annually for inflation. For 2026, estates generally must file and potentially pay federal estate tax only if their taxable value exceeds $15 million, up from $13.99 million in 2025.

An inheritance tax is paid by the recipient, and the amount typically depends on the heir's relationship to the deceased. By contrast, an estate tax is paid by the estate itself before any assets are distributed, although any interest or investment earnings generated after you receive it would be taxable. This includes the federal estate tax administered by the IRS. In other words, beneficiaries generally do not directly pay federal estate tax; it is settled by the estate prior to distribution. (Read more here.)

If you don't need this money, TurboTax suggests putting it into a trust. "A trust allows you to pass assets to beneficiaries after your death without having to go through probate," it notes. "Trusts are similar to wills, but trusts generally avoid state probate requirements and the associated expenses that wills typically have to go through. With a revocable trust, the grantor can take the assets out if necessary. An irrevocable trust usually ties up the assets until the grantor dies."

Bottom line: When you deposit a large cash amount - in this case, a $150,000 inheritance - the teller verifies your identity, records your explanation of the money's source, and processes the deposit normally. The transaction is then reviewed by automated monitoring systems, and if something seems inconsistent might the bank request documentation like estate paperwork. As for this $150,000: It's better off in your bank account than in a drawer. Follow the rules and you won't - fingers crossed - experience any problems.

Don't miss: 'It's my money': My $800K inheritance is paying for a $1.6 million house. Shouldn't I decide where my husband and I live?

Check out the Moneyist private Facebook group, where members help answer life's thorniest money issues. Post your questions, or weigh in on the latest Moneyist columns.

Previous columns by Quentin Fottrell:

'The house has quadrupled in value': I bought a house with my brother, but he did not contribute. How do I fix this?

My sister is buying our parents' $3 million house, but wants to deduct $100K for renovations. Who's right?

'I'm simply exhausted': I'm 55 and have $1.3 million for retirement. Can I retire next year?

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-Quentin Fottrell

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February 26, 2026 05:30 ET (10:30 GMT)

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