"If your inheritance increases your sense of home and safety, that's a really lovely thing to do with it," Bradley says.

Her caveat is that this works only if you're able to handle the upkeep on the house, which Brooks has been able to do just fine.

A Splurge (Or Two)

By contrast, John Kerecz, a 52-year-old environmental engineer in Harrisburg, Pennsylvania, went on a spending spree after he inherited about $160,000, plus a broken-down house, when his father died two years ago.

Because his father had his paperwork in order, Kerecz was able to quickly access the cash. He hired a lawyer based on the recommendation of a family friend, got the death certificate, and had a payout from the insurance company within a couple of weeks.

Then he embarked on a series of trips to Europe, Nashville and New Orleans with his mother, who was in declining health, and eventually spent about $100,000.

What remained went toward a new home for Kerecz and his mother, who now suffers from dementia. He is trying to sell his parents' original home and intends to invest the proceeds from that sale.

"I feel bad that I kind of blew it, but I wanted my mother to enjoy life while she could," he says.

It may seem irresponsible, but using an inheritance to make memories has intrinsic value, says Bradley.

"Sometimes you can meet that purpose without spending $100,000," notes Bradley, who says she would have coached him to take a little more time to figure out how to build those memories with just $60,000.

In Over Your Head

Many inheritors get in even further over their heads, especially if the money comes when they are young.

Richard Rogers, a financial consultant with Stephens Private Client group in Little Rock, Arkansas, had a client who inherited a significant sum at 25 and insisted on buying an $80,000 car.

"I tried to tell him that if you compound this money for a few years, you can buy a lot nicer car. But you can't tell somebody what to do," Rogers says.
Carmen Belcher could have used that advice, too, when, at 22, she inherited $300,000 out of the blue from her estranged father.