Feeling a little sad and guilty about inheritance -- what to do

[Disneefun]

OK, so I just inherited a modest sum of money ($5,000) from an uncle. I've never inherited money before, but I can't help feeling a little guilty and sad about the money. I mean, it's a poor tradeoff for having my uncle here, you know? Plus, I know how hard he worked for that money and how much it must have taken to preserve it (there were six nieces/nephews who each got 5K for a total of 30,000). He spent the last few years of his life in a nursing home and the end was filled with hospitals and hospice care. He had to sell his house several years ago and everything in it to cover the bills. When I found out he had left me this money, I figured there wouldn't be anything left -- I was just flattered he thought to remember me-- so I was blown out of my tree to find out that somehow through all those expenses he had managed to hold on to that money so it could be passed on. I don't know all the details of his insurance, social security, medicare, etc. so I don't really know how bad off he was financially at the end, I only know the bits and pieces of the story that point to his having to go through everything in order to keep his place at the nursing home (If nothing else his story serves as a life lesson for what can happen if you're not prepared for a lengthy old age -- he was 90 when he died and would have been OK if he had died at 85 so it never hurts to save just a little bit more in case you outlive your money).

Anyway, now I'm trying to decide what to do with the money. Currently it's sitting in my ING account until I decide. We have no debt other than the house. All upcoming vacations have already been saved for, we have over a years worth of expenses liquid, and are on track with 401K's and IRA's to have over $3M by age 62. Both cars are in good condition and won't need to be replaced for several years. There are no home improvements we need to make or appliances in danger of failing. So there are no "obvious" uses for the money.

However, I would like to buy a new mac laptop (to replace my "vintage" 1998 iBook) and some professional design software. Currently there is no practical "need" for these things. My iBook works (although it won't run many moderna applications) and the software is basically for my learning only. I do some graphic design work on the side and would really like to learn more professional tools so that I could, maybe in future, take those skills to the job market if I need to (right now freelance writing pays the bills, but I figure it never hurts to have a plan B and since I enjoy graphic design it seems like a logical plan B). The laptop would also be used with my writing business, but I get by fine with what I have. To do this would take about 1/2 the money. The rest would be invested with some of our other funds.

But these are sort of "dream" items -- not necessary or even terribly practical. I feel a little guilty thinking of spending the money on something "frivolous" when I suspect that I got this money because of great sacrifice on my uncle's part. I feel like I should do something important or useful with it -- not buy something that basically amounts to a learning tool with no current practical use or an unnecessary upgrade.

I don't know if I'm really looking for advice here or just thinknig out loud, but if any of you have any thoughts, I'd love to hear them. For those who have inherited money, did you feel this way or am I just nuts? Thanks for listening.

 

[KirstenB]

I've never inherited money, so no practical experience there. Maybe you could use the 1/2 to upgrade your computer, and the other 1/2 to donate to a charity that's meaningful to your uncle or you.

 

[dvcgirl]

I think it's natural to feel the way that you feel when you receive an inheritance. Sort of a bittersweet feeling. It sure sounds to me that you've lived a frugal exsistance and have all of your financial ducks in a row. Why not get yourself that laptop. You've even thought out the practical issues regarding that purchase....I say go for it! I'm sure your Uncle would be happy that his money went towards something practical, yet enjoyable.

 

[sameyeyam]

Spend it and don't worry about it. We all have to die sometime and you can't take the money with you.

Remember, it's only money. Your uncle is in your head and your heart, not in your bank account.

So I say enjoy it, have fun and live life to its fullest. When you are spending it have happy thoughts of your uncle!

 

[Caitsmama]

Do you have kids/grandkids? You could put some aside for them (college funds)? And if a new computer would help you in the following years in your career, then i don't think that is a frivolous use for the money..

Personally, we are not that well off, so 5k would definately be put to good use in our house! LOL But, i have always said, if i ever inherited any kind of sum, i would put it toward a DVC membership, so we will always have a vacation paid for each yr. Which to me, is family time that is priceless.

 

[Chicago526]

Well, as you pointed out, there is no such thing as saving too much for retirement, how about putting most of it in a retirement account? Take some of it and do something fun or get something you want (not need!) and put the rest into whatever type of retirement account you already have. If you don't have a retirement account, this would be a great way to start one!

 

[Disneefun]

Do you have kids/grandkids? You could put some aside for them (college funds)?

Forgot to add that we don't have kids or grandkids, just a distant niece that, for reasons too convoluted to go into here, we aren't close to and have only seen once.

And KirstenB, I like the idea of the charity. I've thought about donating some of it back to the hosplice that helped him in the end. They really were great. Good idea!!!

DVCgirl -- you are right. We live a very frugal existence and, while we like to enjoy ourselves on vacations and stuff, we get bent out of shape when we spend money on something that doesn't seem practical or fall under the heading of "experiences" like travel and time with family. I think that's part of the problem here.

 

[ceecee]

I would put it in a CD or IRA and think about it for awhile. Don't just run out and buy something impulsively. My nephews (early 20's) each inherited roughly the same amount and both had it gone within a week. It made me feel sad knowing how my aunt pitched pennies all those years. DD's we put into her college fund, where it is making interest.

 

[imsayin]

Don't forget to find out if it is a taxable inheritance or not. (It is taxable if it came from a tax-deferred account such as a 401K or IRA).

 

[Mom-to-2-Princesses]

I am so sorry for your loss - bu tit sounds like he lived a full life and was happy to leave something to you and the other nieces/nephews.

I had a friend who received a modest inheritance and she purchased a nice piece of jewlery (actually a ring)-- everytime she looked at it it gave her a nice memory of the relative who passed away. I think it's nice to get something that lasts a long time.

And with the amount you recieved you could get both the computer and a lasting memory.

 

[irishbosoxfan]

My family also is very frugal--if it is not needed it is not bought--Now if I were in your situation I would drop that money onto the principal of my house because this will cut back on the monthly payments freeing up more money for your day to day needs--and if those day to day needs are set then start another account to put in all the extra money and in short time you will have enough to buy your computer or anything else you may want or need.
By leaving you this money your uncle wanted to make your life a little brighter, do what makes you happy! If your uncle thought this money was upsetting you he would be upset! By a little momento to honor your uncle then put the rest to good use whatever good use may mean for you!

 

[NancyIL]

While you're deciding what to do with the money, how about putting it into an interest-bearing account, and donating the earnings to charity? Instead of a one-time gift, the earnings can be given over a longer period of time while the principal remains intact.

 

[JudyS]

.... We have no debt other than the house. All upcoming vacations have already been saved for, we have over a years worth of expenses liquid, and are on track with 401K's and IRA's to have over $3M by age 62. ....

Whoa! I am impressed by how much you have saved!

There is no reason to feel guilty about the inheritance, but if you want, you could give some of the money to a charity that your uncle would have liked. Then, you might as well splurge on the laptop or whatever, since you have so much in savings already.

 

[westjones]

I would pay down the mortgage. When I inherited some money about 7 years ago we used it to pay down our house (our only debt at the time) and now the house is all paid off and it is great to be debt free!

I made double house payment each month, and really wanted to get rid of that last debt.

NOW I have an account set up to save for our next car. I hope to never have to take out a loan for another car again. My dad always said to just borrow for the first car, then once it is paid off start saving for the next one and never borrow again.

Honestly, being debt free (totally debt free) is the best feeling in the world. We can't "live it up", but we can afford for me to be a stay at home mom and live on my DH's income so our family can enjoy a relaxed lifestyle and go on 1-2 vacations a year (at least one of them would be Disney).

I understand how you feel about the money. I felt like I needed to make good decisions about my parent's money because my dad worked VERY hard for the money and in the end, he died from an illness caused by him job. But I knew he would love the idea of me paying off our house. He was always preaching to us about not being in debt, and I listened---and I am hoping his lessons are passed on to my kids through me. He was so right! Being debt free is great.

DJ

 

[BirdsOfPreyDave]

Spend it on something you know would have brought a smile to his face were you to have told him about it. Would he have been happier knowing he helped to fulfil a need in your life (like a mortgage or car payment), or for giving you a special treat (like your new computer or a Disney vacation).

Don't feel guilty about the gift. It probably warmed and comforted him in his last days to think of what he was able to leave behind for those he loved.

 

[crisi]

Money is malleable - once its in the pot, it becomes hard to determine where it came from.

Since you and he are both frugal people, and I think you might feel some guilt to "waste" his inheritenace, I'd set this money aside. I'd change your will to pass on the $5k to charity if its still there after you pass on. Then I'd take whatever you need to replace your computer out of savings and buy a new computer. "His" money stays in savings, but replaces "your" money that you bought a new computer with.

 

[Grumpy's Gal]

I'd inverst it and then every year or two, I'd donate the interest to a charity. That way, it keeps on giving and giving.....

 

[bbangel]

I received a sum of money when my father passed away. I did the same as you, put it in a high interest savings account until I was better able to deal with it. It is highly emotional. It took me about 9 months to find something that would improve my life and yet honour the gift from my father. He thought home ownership was very important, so I used it for a downpayment on a home.
You know your uncle best. What did he value or find important. (His gift suggests that family was high on that list) That is what you will end up feeling best about using the money for. Don't be afraid to take a long time to decide what that is.
Some ideas might be to visit a place he always wanted to go, or support a group he felt connected to. Was he connected to any armed forces or any universities? They have ways you can donate something in his memory (like a scholarship).
Many condolences for your loss.

 

[Brooknwdw]

Sorry for your loss. I agree with several of the suggestions here. I like the idea of paying it towards your mortgage. Talk about a lasting way to use that money, you would never regret it!

Also since you feel sadness & a bit of guilt, donating some or all to a charity or organization that is important to you may give you peace of mind.
I would only suggest the ladder as you are doing well & don't NEED the money.

Along those same lines, if you have a dear friend or family member whom you know could really use some money, gifting some to them would be so thoughtful & perhaps life changing for them. ~

Just a few thoughts ~~

 

[Debbie]

My condolences on the death of your uncle. I think that you should definitely buy something with some of the money. Being able to say, "This (whether a trip, a computer, a picture, earrings....) came from Uncle John" will put a smile on your face, and bring forth the happy memories that our loved ones give.