Worried Your Heirs Will Blow Their Inheritance? Make a Plan

Ensuring that younger generations don’t waste the wealth you’ve worked so hard to build starts with careful estate and tax planning.

An ecstatic young woman tries to catch falling money.
(Image credit: Getty Images)

If you suddenly inherited $500,000, what would you do with it? A lot of people very quickly reply, “Pay off the house!” However, in many cases, that instinct to shed yourself of mortgage debt is the same instinct that will dismantle the potential generational wealth that provided the inheritance in the first place.

If you bought your house more than a few years ago and your credit score paints you as a responsible borrower, it’s likely your interest rate is somewhere in the neighborhood of 2.5% to 3.5%. Using that half-million-dollar inheritance to get rid of your mortgage would save you from paying that interest, but at what cost?

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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George Pikounis
Investment Adviser Representative, Burns Estate Planning

George Pikounis is an Investment Adviser Representative for Burns Estate Planning in Tallahassee, Fla. With over a decade of experience in the financial services industry, he uses his background to help clients understand how each financial decision impacts their overall portfolio. As a Certified Estate Planner, George is particularly passionate about guiding his clients in creating and preserving generational wealth.