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BABY BOOMERS STAND TO INHERIT A LOT -- BUT CAN THEY HANDLE THE NEWFOUND WEALTH?

Over the decades ahead, trillions of dollars will pass from the nation's all-time wealthiest parental generation to their baby boomer children.

Some boomers will inherit modest homesteads and small bank accounts. Others expect hundreds of thousands of dollars, important real estate or shares in family businesses.

But no matter how much or how little comes your way, you may not be prepared for handling a sudden infusion of money. It's scary to have to invest an irreplaceable cache that represents your children's college or your retirement standard of living.

Whether your inheritance is modest, moderate or major, you'll find good advice in a book called "Managing Your Inheritance" by two Los Angeles attorneys, Emily Card and Adam Miller (Times Books; $15 in paperback).

The authors don't have a lot to say to older heirs (my mother didn't inherit until she was 73; my own kids have been duly warned). But younger heirs will find a lot of sensible talk about setting priorities for funds that have come their way.

For example, say you receive a modest sum -- under $50,000. If your kids are in college, that's where the money will probably go. But if not, and you've been pinching pennies all your life, you may feel suddenly rich. Some heirs squander the money on expensive trips, new cars, new furniture.

I'm all for blowing $5,000 on a fabulous trip. You should take some joy from the gift that your parents labored to leave.

But don't blow it all. If you invest $45,000 at a conservative 6 percent after tax, you'll have $80,500 10 years from now and $144,300 in 20 years -- not even counting dividends. That will pay for a lot more trips, and a far more comfortable retirement than you have any hope of now.

A digression about debt: In theory, it's smart to use your inheritance to get rid of credit card debt, then invest any money you have left. That ends the burden of interest costs and frees up money for making additional payments into mutual funds.

But committed spendthrifts will probably run up credit card debt all over again. If that describes you, don't spend your inheritance on debt. Struggle to meet your monthly payments out of earnings and set your once-in-a-lifetime windfall aside to grow.

What about heirs with a moderate inheritance -- say, $50,000 to $250,000? Education or retirement still should be top priorities (again, after blowing $5,000 or $15,000 on some luxury you really want).

You might also be able to repay credit card debt and still have a worthwhile nest egg left.

What about the mortgage? Younger heirs might keep it. Over the long term, they might earn more by investing their inheritance than they pay in mortgage interest. Older heirs, by contrast, might want to own their home debt-free.

What about drawing an income from the money, to improve your standard of living? Younger heirs would generally be smarter to reinvest for higher returns. Older heirs might be glad for the extra income their inheritance can provide.

A major inheritance -- say, $250,000 and up -- calls for expert help if you haven't invested that much money before. Given large sums of money, even younger people can consider improving their standard of living by drawing an income from their new pool of cash.

A certified public accountant can advise you on taxes and budgeting. Also ask how much you can prudently take from your windfall every year. A capable financial planner (not just a salesperson) should also be able to help.

Stockbrokers, financial planners and venture capitalists crawl out of the woodwork with can't-lose deals for the newly monied. Consider only conservative investments, Card and Miller advise.

Earlier, I wrote that you shouldn't throw your inheritance away. But I'd rather you spent it on high living than on some schemer's crummy deal.

One warning: Never spend your inheritance in advance. You might receive much less than you thought. Your father might marry someone younger and leave part of the money to the new wife. Your mother might live to 100 in a nursing home, at a cost of $60,000 a year or more.

Live as if no inheritance exists, then conserve it if it comes.

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