Inheritance money is that which has been distributed to a person from the estate of a deceased loved one. Much of an inheritance will be taxed, which is why most people hire an estate planning lawyer. Having a living will or trust in place can help eliminate many of the tax liabilities that otherwise would be paid out of the inheritance. Additionally, the beneficiaries can have tax avoidance plans in place that allow them to withdraw the inheritance at a later time with much lower tax rate.