Personal Finance

I just found out I'm receiving a $3 million trust fund - what's my next move?

Aaron Webber

Published: January 22, 2025 8:30 am

The dream of many people around the world: receiving a surprise fortune. But what should you do with the money once you get it? If you’re already rich, should your options change? How can you budget for inheriting a surprise stack of money?

One person found out they were about to inherit a large fortune and didn’t know what to do. They took their concerns to the people in the r/personalfinance subreddit community. Here is what they said.

Please remember that all the comments in the original thread, and this article, are opinions. You should always speak to an expert, or a lawyer, before making any financial decision regarding a trust fund.

The Question

The author of the original post says that he lives in Los Angeles with his wife and is largely self-sufficient except for medical costs that his parents help with. They make a combined salary of between $100,000 and $120,000 every year. They say they live an “average” life. They have very little debt except for some credit card bills and student loans.

They recently found out that they will soon be the beneficiary of a $3,000,000 trust fund created by his parents. It gives him access to $10,000 every month and up to $250,000 for a down payment on a home.

They wanted to know if they should take the funds from the trust and put it into their own stock portfolio, IRA, or some other option. They also wanted to know if they should pay off their debt immediately or pay it off over time.

Essentially, they didn’t know what to do with so much money and needed help.

The Community Response

There were plenty of recommendations for what to do with the money, mostly based on personal preferences and experience. However, there was one common threat throughout the discussion: avoid lifestyle creep.

That much money is more than enough to fund their life until, and even beyond, retirement. It is more money than most other people on Earth will ever see. But if the author allows the money to influence their daily spending habits, and begins to buy more expensive things just because they can, then it won’t last very long at all.

It is common knowledge that you can’t budget yourself into wealth, but you can spend yourself into poverty.

Because the trust limits how much the author can withdraw every month, this problem is mitigated to some degree, but it can still cause issues like taking on more leverage than they can afford in risky investments.

In the end, the best recommendation was to not change their behavior much at all. They should continue investing in whatever portfolio they have, maximizing their contributions to retirement, and living within their existing budget, allowing any money from the trust to grow even more, and eventually developing into a very large retirement fund.