Money that wasn't there yesterday sitting in your account today doesn't feel like money. It feels like a problem you haven't figured out yet. And I get why. Nobody hands you a manual for this, and most of the time this kind of money didn't show up because something good happened. It showed up because you lost someone. So of course it feels strange in your hands. That's not weakness and it's not ingratitude, it's just an honest reaction to something your brain flat out doesn't have a folder for yet.
Most folks do one of two things with that discomfort. They freeze solid, or they move fast in some direction just to make the feeling stop. Both are wrong, and here's the thing nobody tells you until they've watched it go sideways: the first thirty days matter more than almost anything you'll do with this money after that.
So start by doing nothing. I know that's not satisfying to hear, but it's the real first step. Don't pay off the mortgage yet. Don't buy the car yet. Don't hand a chunk to your kid's tuition or your church or your best friend's struggling business yet, even if every single one of those causes is genuinely good and you genuinely want to. Park it somewhere safe, a high yield savings account or a plain money market fund, and let it sit while you get your feet under you. Big decisions made in the first month of grief have a track record, and it's not a good one. I've seen it plenty of times.
Next, figure out exactly what kind of inheritance you're actually holding, because that changes everything downstream. Say part of what you got is a traditional IRA. That account comes with its own rules attached, typically a ten year window to draw it down, and missing that window doesn't just cost you a headache, it can trigger real tax penalties. Cash in a checking account doesn't carry that clock at all. A house comes with its own separate set of decisions, sell it, rent it, keep it, live in it. A brokerage account full of stock your parent held for decades has its own tax treatment too, usually kinder than people expect, but only if you actually understand it before you touch it. Four different assets, four different rulebooks. Treating them all the same is exactly where good people get into trouble fast.
Once you know what you're holding, get a CPA to walk you through the real tax picture before you decide another thing. This is the step folks skip most, usually because taxes feel like the boring part compared to daydreaming about what to do with the money. Skip it anyway and a decision that looked smart in the moment can turn into a real mess come filing time. This is also where I'd bring in a CFP or CFA, a certified financial planner or analyst, not to tell you what to do with the money but to help you actually see the tradeoffs clearly, paying off debt against investing against spending, based on your real situation instead of some rule of thumb off a personal finance blog. A CPA handles what you owe. A CFP or CFA handles what you do next. Two different jobs, two different people, and no doubt about it, you want both in your corner.
Only after the pause, the sorting, and those two conversations does it actually make sense to decide what this money is for. There's no one size fits all answer here, and I'll say that plainly, because anyone who hands you a tidy answer without knowing your situation is usually selling you something.
Warren Buffett said something built for exactly this kind of moment, even though he was talking about the market specifically: "The stock market is a device for transferring money from the impatient to the patient." Swap out "the stock market" for "this decision" and it still holds up just fine. The money isn't going anywhere in the next thirty days. It'll still be there once you've got the tax picture and a real strategy in hand, and it'll be in better shape for having waited.
The mistake I see most isn't bad math. It's speed, in either direction. Some folks spend an inheritance the way you'd spend a bonus, fast, a little guilty, gone inside a year. Others freeze the whole thing out of guilt and won't touch it or even look at it for years, and that's got its own cost too, since money sitting in the wrong account for a decade quietly loses ground to inflation and taxes, same as money spent carelessly does. Neither one actually honors what was left to you. The version that does isn't fast and it isn't frozen. It's just informed, and that only takes thirty days to get right.
I wrote a full guide on exactly this, walking through the actual first moves, the tax questions, and the mistakes I see most often, in more depth than a single essay can cover. It's called I Just Inherited Money. What Do I Do First?, the fifth title in the Below the Fine Print series. You can find it at Amazon.com/author/dinoalonso.