Author Topic: What to do with cash from matured bonds? and, co-mingling inheritance  (Read 1946 times)


  • 5 O'Clock Shadow
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  • Posts: 6
I recently received a $250,000 inheritance from my parents' estate. Currently, it's about 80% bonds, 20% equities. About twice a year, one of the bonds will mature, at anywhere between $10,000 - $30,000. I am in my late 50's, FT job, married, husband is "retired", we have about $600,000 in retirement savings, and $50,000 in cash. Two kids in college, with 2 & 3 years of college tuition left to pay. My income is enough to cover our usual living expenses, plus pay part of the college tuition. Our current cash savings is enough to pay tuition and IRA contributions through August 2014 (assuming no changes to my work situation). 

The first bond just matured ($15,000) -  as the bonds mature, what do you recommend I do with the cash? Options I'm considering are:
1. Put into a money market fund, which keeps the corpus stable, and available for use in 1 1/2 years to pay college tuition.
2. Put it into a Vanguard Index Fund (maybe Vanguard Total Stock Market Index?) and hope for some growth
3. Buy some additional Equities through the broker who currently holds all of the inheritance funds - possibly Aqua America or Marathon. My parents' broker charges a 2% commission on both buys and sells. Is this usual?

Another, related question is more legal than financial. I've been told (by a lawyer), that in the event of a divorce, any inherited money is not considered part of the estate unless that money is co-mingled. If I take the cash from the sale of the bonds and put it in a Vanguard Fund in my name, is that considered co-mingling?

I'm not a sophisticated investor, but I certainly see the value of having money earn money instead of just sitting around. And I do understand that any Index Fund is also not a "sure" thing. Thanks for any advice!


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