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How to Invest Inheritance Sustainably

How to Invest Inherited Money in a Values-Based, Sustainable Way

ESG, Impact Investing, Investments /

Inheriting money from a loved one often brings a mix of emotions: gratitude, responsibility, and reflection. It also presents a unique opportunity to honor their legacy in a way that aligns with your values. One way to do that is by adopting a values-based investing strategy—an approach that unites long-term financial growth with meaningful, real-world impact. Whether you refer to it as sustainable investing or socially responsible investing, the goal is the same: to invest with intention and clarity.

Thanks to tools like screening filters, third-party ratings, and ESG overlays, you can evaluate companies and funds based on how well they align with the issues you care about most, such as climate resilience, ethical governance, or expanding access to opportunity. We’ll explore how to use those tools later in this post, along with strategies for transitioning inherited assets into a purposeful, tax-smart portfolio.

Assessing Your New Financial Position

When you inherit assets—whether it’s cash, property, stocks, or retirement accounts—start by taking inventory and gathering supporting documents. This includes deeds, account statements, and beneficiary designations. One critical step is understanding the cost basis of inherited assets, especially whether they received a ‘step-up’ at the time of inheritance. This will influence potential capital gains taxes.

You may also inherit investments—such as individual stocks or funds—that don’t reflect your current values or priorities. Rather than selling them immediately (which could trigger taxable gains), you might consider a phased transition over time. A gradual reallocation strategy can help you reduce concentration risk, shift toward values-aligned holdings, and manage taxes efficiently.

Next, assess how this inheritance affects your overall finances. Update your balance sheet and review your emergency fund, debt obligations, and savings goals. For example, consolidating inherited IRAs into a single account may make them easier to manage. Consulting with a financial planner, tax advisor, or estate attorney can ensure you handle everything properly and stay organized through the process.

Sustainable Investment Opportunities to Consider

There are many ways to align your inheritance with your values. Whether you want broad market exposure or more personalized control, today’s investment landscape offers a range of vehicles to support sustainable, values-based goals. These approaches are often referred to as socially responsible investing, sustainable investing, or values-based investing—all of which focus on aligning your capital with causes that matter to you, without compromising on long-term financial returns. ESG (Environmental, Social, and Governance) factors can serve as a helpful overlay in evaluating these investments, offering insights into risk management and corporate behavior.

  • Sustainable Bonds: These include green, social, and sustainability-linked bonds that fund projects such as affordable housing, clean transportation, or renewable energy infrastructure. You can invest through mutual funds or ETFs for broad exposure, or work with an advisor to build a customized bond ladder of individual securities. A bond ladder offers greater opportunity for control over maturity timing, cash flow, and credit quality—while funds offer ease of access and diversification.
  • Values-Aligned Mutual Funds and ETFs: These funds bundle investments screened for alignment with personal and social values. They might avoid harmful industries or focus on positive themes like renewable energy, public health, or ethical corporate governance. ESG factors are often used within these funds to evaluate company behavior and performance, helping to identify both risks and opportunities.
  • Separately Managed Accounts (SMAs): SMAs are portfolios of individual stocks customized to reflect your specific values and financial objectives. With advisor guidance, you can tailor exclusions and emphasize themes such as clean water, climate solutions, or companies that support inclusive hiring practices and expand access to opportunity.
  • Renewable Energy Investments: These range from investing in solar and wind energy companies to supporting community energy projects or infrastructure funds. These opportunities help fund the transition to cleaner energy sources.
  • Sustainable Real Estate: Investments in energy-efficient buildings, mixed-use developments, or affordable housing can offer financial return alongside positive social or environmental impact.
  • Specialty Impact Investments: Consider areas like regenerative agriculture, reforestation, clean water access, or microfinance. These investments offer a direct connection between your capital and outcomes such as climate resilience, food security, or financial inclusion.
  • Private Market Opportunities: For investors who meet certain income or net worth qualifications (e.g., accredited investors), private market investments can provide access to sustainable and socially impactful projects not available in the public markets. These may include private equity funds focused on climate innovation, social enterprises, sustainable infrastructure, or community development finance.

Researching with Integrity and Avoiding Greenwashing

Use independent sources like Sustainalytics and MSCI for ESG ratings, CDP for environmental disclosures, and Global Reporting Initiative for standardized reporting. Avoid greenwashing by relying on verified data and long-term commitment.

Integrating Inherited Assets Into a Sustainable Strategy

If you already have a portfolio, new assets may change your allocation or increase concentration in areas that don’t match your goals. Consider reallocating gradually, using donor-advised funds for philanthropy, or blending the assets with your existing portfolio.

Tax Considerations and Professional Guidance

Inherited assets come with tax implications that vary by asset type and jurisdiction. IRAs may have required distributions, stocks may qualify for step-up in basis, and real estate may require valuation and transfer planning.

Monitoring, Rebalancing, and Staying Aligned

Values-based investing isn’t a one-time decision. Review your holdings regularly, track impact metrics, rebalance as needed, and stay informed about legislative updates.

Common Challenges and How to Navigate Them

Expect some challenges, such as market volatility, policy changes, differing family views, or short-term cash needs. Work with your team to balance priorities and stay focused on long-term goals.

A Step-by-Step Guide for Moving Forward

  1. Clarify Your Vision
  2. Build a Team
  3. Create a Plan
  4. Review Regularly
  5. Adjust as Needed

We’re Here to Help with Sustainable Investments

At our firm, we specialize in helping individuals invest their inheritance in a way that honors both legacy and values. Whether you’re new to socially responsible investing or looking to integrate values-based practices more deeply, we offer guidance grounded in research and tailored to your goals. Let’s have a conversation about how your inheritance can become a force for long-term financial well-being and meaningful impact.

Lee Strongwater, Senior Financial Advisor
Senior Financial Advisor |  + posts

An entrepreneur and world traveler, Colorado Capital Management vice president and co-owner Lee Strongwater brings a global perspective to investments and life planning.

Editor’s Note: This blog post is for informational purposes only and does not constitute financial, legal, or tax advice. Readers are encouraged to consult with a qualified professional regarding their individual circumstances. Please refer to our firm’s website for full disclosures and important information: CCM Website Disclaimer

Investment Advisory services offered through Colorado Capital Management.

A Registered Investment Advisor.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

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With a drive to live purposefully and passionately, Jason focuses on helping clients to live in abundance.

Jason is a partner and senior advisor at Colorado Capital Management.  He brings more than 15 years of varied experience working in the financial services industry. He joined CCM after a long search to find the perfect firm that aligned well with his values and mission. Jason is passionate about helping individuals and families live abundant and intentional lives. He is proud to be part of a Certified B Corporation, doing meaningful financial and investment planning for clients, while also focusing on socially responsible business practices and making a positive impact. As a Chartered SRI CounselorSM, Jason has a strong background and keen interest in sustainable investing and enjoys helping clients understand the merits of this approach. Jason is also a Certified Financial Planner™ and has a bachelor’s degree in business administration from the University of Colorado. 

Before joining CCM, Jason worked with Jackson National as a consultant for financial advisors. He helped create meaningful connections with families, creative asset allocation strategies, and tax-advantaged retirement-income solutions. During his tenure there he worked with over four thousand financial advisors across the country, was recognized multiple times as consultant of the year, and also managed a team of twenty-five individuals. 

Jason is happily married to his wife, Bridget, of thirteen years, who he met while in college at CU. Together they have a son and daughter, and a Frenchie named Coco Disco. They live in the Whisper Creek neighborhood of Arvada. When Jason is not at work, he and his  family can often be found making turns in Summit County, wakesurfing in Glendo, WY, cooking, dancing and traveling.

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Erica is passionate about providing purposeful advice to help clients enjoy a meaningful life.

Erica is an advisor at CCM. She joined the firm in 2021, fulfilling her desire to work for a values-based company with a deep commitment to making an impact. She moved from her hometown of Anchorage, Alaska and quickly fell in love with the sunny and beautiful state of Colorado. She brought with her prior experience as a para-planner and is delighted to be engaged in a profession that empowers individuals to flourish financially. She believes strongly in exceptional client service and creating lifelong generational relationships.

In 2022, she accomplished two of her major career goals, finishing her master’s degree in financial planning (MSFP) and earning her Certified Financial Planner™ designation.

Erica enjoys spending time outdoors and traveling to exotic locales. In her free time, you can find her out skiing, hiking, scuba diving, practicing yoga or jetting off to new places to explore. She has a never-ending list of travel plans, having already visited over 20 countries, and feels lucky to have so many wonderful opportunities and adventures.

Lee Strongwater, Senior Financial Advisor

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An entrepreneur and world traveler, Colorado Capital Management vice president and co-owner Lee Strongwater brings a global perspective to investments and life planning.

For more than 15 years, Lee has passionately assisted clients with their financial planning and portfolio management needs. He especially enjoys helping them live more meaningful lives and invest in ways that are aligned with their values. Lee holds a bachelor’s degree in political science from the University of Colorado and a master’s degree in international affairs from Columbia University. He also holds the Wealth Management Specialist (WMS) certification.

Before joining Colorado Capital Management, Lee was a managing partner at Strongwater-Schott, a fee-only investment management and financial planning firm in Denver. Prior to that, he was an entrepreneur who helped start and manage several small firms, including a children’s product company that went public in 2007.

Lee is an active volunteer for several organizations. He is a past President and current member of the Board of Directors for the Boulder Jewish Community Center, an organization that is highly respected on both a local and national level. Lee is also on the Investment Committee of Girl Rising-Global Education, a venture philanthropy fund that invests in social entrepreneurs with culturally-relevant ideas. The fund’s investments promote gender equality and improve educational outcomes for girls and boys living in poverty in Kenya and India.

Lee is married and has two daughters. He enjoys hiking, skiing, traveling—mostly to Mediterranean countries—and trying out new recipes from his journeys. When he’s not on the go you can find him engrossed in a book.

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Steve Ellis has spent his career making an impact, so it’s not surprising that Colorado Capital Management’s founder and president launched the firm’s entry into impact investing.

He brings over 30 years of experience as a financial advisor to high net worth clients. His early work included teaching college courses in accounting and finance, consulting for a major accounting firm, and researching and acquiring investments as the chief due diligence officer of a leading national financial planning firm. Since 1989, he has advised individual and institutional investors on the management of their wealth. Steve is a Chartered Financial Analyst (CFA), holds a business degree from the University of Colorado, magna cum laude, and a master’s degree from Cornell University.

Steve launched the firm’s entry into impact investing in 2012 and is committed to helping build the field. Steve is a passionate speaker on the topic. He has taught about impact investing at various conferences and classes around the country, including as a past faculty member at Middlebury Institute of International Studies. He is listed in the Who’s Who in Impact Investing.

Steve is married, with two daughters, enjoys hiking, biking, skiing, tennis and bridge, and is actively involved in the community. He has served on numerous boards and committees for a wide array of nonprofit organizations, including the Boulder JCC, Rose Community Foundation, Jewish Family Service, and Friendship Bridge. His passion for impact and community service helped lead Colorado Capital Management to become a Certified B Corporation and to build a strong culture of volunteerism and philanthropy.