What to do with inherited money: how to invest an inheritance wisely

An inheritance is probably the largest sum of money many people ever receive at once, and it arrives at the worst possible moment for making decisions: in the middle of grief, with tax deadlines running from the date of death and with several people offering opinions. So the useful question is not "where should I invest the inheritance" but in what order should I do things. Experience is fairly unanimous here: the expensive mistakes with inherited money rarely come from choosing the wrong product, they come from deciding too early. This guide sets out that timeline for an inheritance in Spain, looks at what to do with an inherited flat and proposes a split by time horizon for when the moment to invest arrives.

Inherited money is not available on the day of death. There are formalities with legal deadlines, and until they are met Spanish banks will not release balances to the heirs (although they usually allow the funds to be used to pay the inheritance tax itself). Broadly, the sequence looks like this:

Spanish inheritance tax is devolved to the regions, and the differences between them are huge: for children and spouses, some regions charge an almost token amount while in others the bill depends heavily on the amount inherited and the relationship. It is the first number you need, because it reduces your investable capital and must be held in cash before you commit anything. A tax adviser or gestoría is not a luxury here; it is part of the process.

When the money is finally released, two pressures appear: the bank's, which suddenly assigns you a very attentive relationship manager, and your own, the feeling that "idle" money is being wasted. Both push you to decide quickly. Our general advice is the opposite: leave the capital for 6 to 12 months somewhere liquid with no risk of loss while you sort out everything else.

• Where to park it: high-interest accounts or short deposits (around 2–2.5% a year as of autumn 2026), split so that no more than €100,000 per holder per bank sits above the deposit guarantee limit, or Spanish Treasury bills at 3–12 months, which are state-backed with no such cap.
• What waiting costs: on €150,000, the difference between 2% and 6% over six months is roughly €3,000 before tax. That is the price of insurance against a rushed decision, and it is usually cheap.
• What to avoid in that window: products with entry or exit fees, long-term savings insurance with penalised surrender, or anything the seller cannot explain to you in two sentences.

Many inheritances are not cash but a flat, often shared between siblings. It is the decision with the most emotional weight and the one that most deserves a cold question: if you had its value in cash today, would you buy this flat as an investment? If the answer is no, keeping it is a perfectly legitimate sentimental choice, but it is not an investment decision.

Where there are several heirs, joint ownership is the most common source of conflict: one wants to sell, another to let and another to live there. Agreeing in writing, from the outset, who pays what and when the decision will be made stops the flat from being frozen for years. If it is sold and the aim is to keep property exposure without managing buildings, the alternatives are in investing in property without buying a flat.

Once the taxes are paid and the money is available, the most sensible way to organise it is to ask when you will need each euro. Each horizon suits a different kind of investment, which avoids the classic mistake of locking money you will need in two years into something illiquid. For someone with a stable income, a €150,000 inheritance net of tax could look like this:

This is not a recommendation: the split depends on your age, whether you have a mortgage, your income and how much volatility you can stomach without selling at the worst moment. If your mortgage rate is high, paying it down is a risk-free return equal to that rate; if it is low, keeping it usually makes more sense. For full planning based on the amount left, see our guides on where to invest €100,000 and where to invest €200,000.

For many families the inherited wealth was already in property, and it is natural to want to stay in bricks and mortar without the burden of managing a rental. Co-investing in buy, refurbish and sell deals fits the 2–5 year horizon: an estimated term of 12 to 24 months, a specific property as collateral and, in our case, Invernova's own capital in every deal alongside the co-investors', with stakes from €25,000. Before entering any deal, check its LTV (how much of the property's value the capital at risk represents; we explain it in what LTV is) and make sure there is a contract for each deal.

Our record, complete and deal by deal in the track record: 49 settled deals, 0 failed, an average achieved return of 18.6% and €10.7M returned to co-investors. The less favourable side too: 11 of 49 closed below their estimated return, the weakest delivered 8% and a few ran past two years, which is exactly why this should not be money you will need soon. How that profit is taxed in Spain (19% withholding and the savings base of income tax) is covered in our property investment tax guide.

1. 01Investing before paying inheritance tax. If you then have to sell in a hurry to pay it, you sell when you must, not when it suits you.
2. 02Accepting without an inventory. If there is any doubt about the deceased's debts or guarantees, accepting with benefit of inventory limits your liability to what you inherit.
3. 03Signing at the bank branch on the day the accounts are released. No good product expires in a week; the fees on a bad one last for years.
4. 04Putting everything into a single asset, whether a flat, a fund or a deal. An inheritance is usually a one-off: diversification is what stops a single mistake from consuming it.
5. 05Deciding for the other heirs, or with them, without paperwork. Whatever is not agreed in writing at the division becomes the source of the family dispute.