Instead of rushing out to the mall or the car dealer, young heirs should spend some time evaluating their financial situation. Making this effort will give you a good view of your overall financial condition, including income, expenses, assets, debts, and liabilities.

How long does an inheritance last one person?

A sum that can last one person a lifetime might last another just a few years, months or even weeks. If you’re lucky enough to inherit a large amount of money when you’re young, here are six tips that will help ensure that your fortune lasts at least as long as you do.

What’s the worst thing a person can do with an inheritance?

The absolute worst thing someone can do is to go out and spend money lavishly. Get your affairs in order first, and then squander only what you can afford to live without.

What’s the average track record of inherited wealth?

To make sure you do justice not only to what you have received but to the generations that will follow, keep in mind that, in terms of longevity, inherited wealth has a bad track record. Some 70% of that wealth is lost by the second generation and 90% is gone by the third generation.

What’s the best way to invest an inheritance?

The best thing to do for most people⁠—they will probably echo this sentiment⁠—is to invest widely in a large basket of funds that offer a solid return over time. It is considered safe, and often the smartest investment for young people with an inheritance.

Where do you not have to pay inheritance tax?

State Inheritance Taxes. You probably won’t have to worry about an inheritance tax, either, because only six states collect this tax as of 2018: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.

What’s the average value of an inherited house?

For example, you might inherit a house that’s valued at $250,000 on the decedent’s date of death. You then sell the property for $275,000 a few years later.