My student loans would be GONE. I would save the remainder for a future down-payment, and maybe take one small vacation.

Anonymous wrote:FYI if you live in MD there is a 10% inheritance tax. Even on my tiny $10,000 inheritance.

There is no tax for most close family members.

Anonymous wrote:Pay off any high-interest loans (car?), keep the low-interest loans and deductible mortgage, leaving you free to buy a place with a larger downpayment that lets you skip PMI on the next house: interest rates are rising so start looking.

solid advice

Would definitely pay off student loans and use the rest towards a down payment and/or emergency fund.

Anonymous wrote:Is there an inheritance tax in VA? I thought all inheritances that came to you were tax free?

http://wills.about.com/od/stateestatetaxes/qt/2013-states-without-estate-tax-inheritance-tax.htm

Also, the bigger your downpayment, the more flexibility you will have to find/negotiate a lower interest rate.

Also, find tax-deductible investments like IRAs and 529 plans.

OP here, thanks for the replies! we consulted with an attorney who told us that the inheritance tax is applied in accordance with the laws of the state where the inheritance originates from, rather than the state where the recipient resides. For us, that means no inheritance tax.

Anonymous wrote:Is there an inheritance tax in VA? I thought all inheritances that came to you were tax free?

I don't think so. Only five states have inheritance tax. They are listed on turbo tax.

Pay off any high-interest loans (car?), keep the low-interest loans and deductible mortgage, leaving you free to buy a place with a larger downpayment that lets you skip PMI on the next house: interest rates are rising so start looking.

Offhand the things you could do would include--

student loan
mortgage
down payment for next house
college savings
retirement savings
emergency savings


You haven't given any information about your cashflow, savings, interest rates on loans, home equity, etc.

It's hard to give any advice without any info. but generally I'd say that you should leave it alone for a while both because it's good not to rush into decisions in a situation like this, and because you expect to move in a few years.

Is there an inheritance tax in VA? I thought all inheritances that came to you were tax free?

FYI if you live in MD there is a 10% inheritance tax. Even on my tiny $10,000 inheritance.

Pay off student loans. Save the balance towards a down payment.

I would definitely pay off my student loans. That still leaves you with more than $50,000 to put toward a down payment and frees you from a significant monthly payments that have no positive tax implications like your mortgage does.

My husband and I will be receiving a $250k inheritance from a family member's passing in the next few months and are currently brainstorming what to do with it. Our first thought is to cancel our grad school debts, which amount to just under $200k combined. On the other hand, we owe roughly $150k on our home and could put the majority towards that, but we plan on moving to a larger place in the next few years (we have two kids) so maybe it makes sense to use it as a down payment? Aside from student loans, mortgage and our cars, we don't have any additional debt (no credit cards, etc...). What would you do?