I plan to purchase land to build a new home within the next year. I am receiving an inheritance in the form of a trust account; the account is in my name and I am also the trustee. I had planned to use this money to purchase the land. While I don't know how much the land will cost, we can estimate $200,000 for the purposes of this question. The inheritance is approximately $450,000.
However, I also have money in stocks, approximately $400,000, which is almost all gains. This money is planned to use for retirement (it is in a regular stock account, separate from my actual retirement accounts).
Is there any good reason not to use this money to purchase the land instead, and leave the trust intact for now? Things I have considered:
- I would have to pay the capital gains tax on any stocks I sell, while the inheritance money is tax-free. (Though I would eventually have to pay that capital gains tax in the future when I retire anyway).
- The money in the trust has various legal protections such as avoiding probate if I died.
- The money in the trust can be invested exactly the same way I'm currently investing the other stock money, if I wanted to. I would likely purchase conservative mutual funds with it.
- Whichever account I use to purchase the land; the other account is still there for retirement.
Due to point 2 above, I can't really think of a good reason to spend the trust rather than the stocks. Having to pay taxes shouldn't really be a consideration, because however much growth there is when I retire, I have to pay taxes on that anyway. Am I missing something in my consideration that makes it better to spend the money in the trust?