How to Make an Inheritance Last: 5 Smart Strategies for Beneficiaries
How do I make an inheritance last?
👉 The best way to make an inheritance last is to pause before spending, set aside emergency savings, pay off high-interest debt, and invest with a long-term plan. Experts also recommend thinking in percentages rather than lump sums—for example, earmarking 10% for fun, 40% for savings, 40% for investing, and 10% for giving—so the money doesn’t disappear too quickly. Working with an estate planning attorney and financial advisor can help ensure your inheritance creates lasting security instead of vanishing within a few years.
So You’ve Inherited Money… Now What?
How to keep your windfall from vanishing faster than the smell of a new car.
The Inheritance Trap
Most people think receiving an inheritance means financial security. But the reality is a little darker (and more ironic).
The average time to buy a new car after receiving an inheritance? 19 days.
One in three people who inherit money have negative savings within two years.
About 35% of heirs see their overall wealth actually go down after they inherit.
By the end of the second generation, 70% of family wealth is gone.
By the third generation? 90% has disappeared.
And in one very real case: a 27-year-old burned through $1 million in 17 months.
That’s not exactly the legacy most parents or grandparents have in mind when they pass something down.
Why Does This Happen?
Sudden money feels like a gift and a curse. Without planning, it can fuel overspending, family conflict, or what financial experts call “sudden wealth syndrome.” (Think: the cousin who suddenly “needs a loan,” or the temptation to buy everything you’ve ever wanted, right now.)
And for younger heirs, money without guidance is often money wasted.
Five Ways to Make It Last
The good news: you can make an inheritance last. Here’s how.
Press Pause. Don’t rush to spend. Sit with the money, make a plan, and wait before buying anything major.
Build a Safety Net. Put some aside for emergencies. That cash buffer is worth more than the flashy purchase.
Pay Off High-Interest Debt. Credit cards are wealth killers. Clearing them is like locking in a guaranteed high return.
Invest for the Future. A financial advisor can help you grow what you’ve been given instead of watching it shrink.
Think in Percentages, Not Dollars. Decide what percentage goes to saving, investing, spending, and giving—so the lump sum doesn’t feel like Monopoly money.
Pro Tips From the Trenches
Treat your inheritance like a paycheck: steady, not endless.
Set some rules (like “fun money = 10% max”).
Talk openly with trusted advisors. Silence and secrecy usually lead to bad decisions.
Want Homework? Read These Books
If you’re ready to get serious about money management, here are three of my go-to recommendations:
The Simple Path to Wealth by JL Collins
The Psychology of Money by Morgan Housel
Your Money or Your Life by Vicki Robin
They’re approachable, practical, and might just help you see your inheritance in a new light.
The Takeaway
An inheritance is more than money—it’s an opportunity to create security, freedom, and even a legacy of your own. But it only works if you protect it.
That’s where good planning (and yes, the right legal documents) come in. Because the last thing you want is for your loved one’s legacy to vanish in the time it takes to pick out a shiny new SUV.
❓ Frequently Asked Questions About Inheritances
Q1: How long does the average inheritance last?
Studies show that one in three people spend through their inheritance so quickly that within two years they have negative savings. Without planning, inheritances rarely last beyond a few years.
Q2: Why do most people lose their inheritance?
Overspending, lack of financial planning, and high-interest debt are the biggest culprits. Many heirs also underestimate taxes, family obligations, or lifestyle creep that quickly eats away at the money.
Q3: How can I avoid wasting my inheritance?
Pause before making big purchases, pay down high-interest debt, set aside emergency savings, and work with a financial advisor to invest wisely. Treat the inheritance like a paycheck, not a windfall.
Q4: What’s the best way to leave money so my kids don’t blow it?
Many parents use trusts to protect their legacy. A trust can set rules for how and when money is distributed—such as in stages, for specific purposes, or under the guidance of a trustee. This creates structure and accountability.
Q5: Are there resources to help me manage an inheritance?
Yes! A few great books are:
The Simple Path to Wealth by JL Collins
The Psychology of Money by Morgan Housel
Your Money or Your Life by Vicki Robin
And of course, working with an estate planning attorney and financial advisor is key.