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Opinion
Teresa Ghilarducci

Congrats, You've Inherited Some Money. Now What?

As baby boomers start to pass their assets to their children, inheritors should remember that rushing to pay off debt isn't always advisable.

Don’t waste an inheritance.

Don’t waste an inheritance.

Photographer: Olivier Douliery/AFP

Those who inherit money after a loved one's passing often face anxiety over what to do with it. It may be a once in a lifetime chance to get ahead but there's the perennial personal finance question of whether it's better to pay off debt with the money or invest it for retirement. It's especially relevant now, with baby boomers starting to pass their assets to their children in one of the biggest wealth transfers in U.S. history.

And that assumes recipients are doing the responsible thing — not splurging, or even worse, getting scammed. Unfortunately, half of all money inherited is spent or lost investing, according to one study.