I just inherited $57.5 million – what should I do first?

Some people are happy to get a modest inheritance. That could mean inheriting $30,000 or $40,000 and using the funds to build an emergency fund or buy a home.

Other people get larger inheritances. A $250,000 windfall could make it possible to put multiple kids through college or buy the second home you’ve always dreamed of.

But in this Reddit post, we have someone who’s inheriting an astounding $57.5 million. Of that, about $50 million is in real estate and the other $7.5 million is in cash.

The poster is wondering what they should do with their newfound wealth. And the better question may be what not to do.

Don’t blow the money

You often hear stories about people winning millions of dollars in the lottery only to wind up bankrupt years later. And there’s a reason for that.

When people come into large sums of money overnight, they often have no idea how to manage it. And what tends to happen is that they end up blowing through that money at a faster pace than expected.

This isn’t to say that the poster is guaranteed to fall into that trap. But they may not have a clue as to how to manage their windfall. And they could end up, at the very least, spending the cash portion frivolously and regretting it later.

Get help managing a windfall

The poster here is wondering what to do with such a large amount of assets. The first thing they should do is make a list of what their most pressing financial goals looked like before they received their inheritance.

Let’s say those goals were to pay off their $200,000 mortgage, fund their two kids’ college, and set money aside for retirement. If so, the poster should do just that — take $200,000 in cash and pay off their home, put enough money to pay for college into a 529 plan, and put a large chunk of that money into an investment account earmarked for retirement.

The poster should also feel free to identify a few “wants” and use their pile of money to make them a reality. If the poster has always wanted to travel to Europe and never got a chance, now they can afford a $15,000 trip without even having to think about it. And if they’ve always wanted a fancy $10,000 fridge, well, now they can swing one.

That list of “wants” should be kept to a reasonable level. But there’s certainly no harm in indulging within reason.

However, the poster shouldn’t take these steps alone, or manage their inheritance alone. In a situation like this, enlisting the help of a financial advisor is crucial.

Many financial advisors have clients whose wealth runs the gamut from a few hundred thousand dollars to a few million dollars. A financial advisor may be more than familiar with the idea of managing a $50 million+ estate, and if so, can offer invaluable advice.

Remember, too, that suddenly owning $57.5 million in assets might put you in a position where you’ve got a huge tax bill on your hands. So it’s important to have help navigating that aspect as well.

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