Money, Money

Joni Lipson, 56, of Philadelphia went through a difficult time when money was tight. A tumultuous several-year period in her life brought divorce, kids' college expenses, a move to a new city, getting a job for the first time in years, and the death of her parents. But that time ultimately ended when she received a sizable windfall from an inheritance and a divorce settlement. After going without for so long, it would have been easy to squander a large sum, but Joni sought professional help: Mary Jo Harper, a wealth management adviser with Merrill Lynch.

With guidance and planning, Joni was able to buy a house and build a retirement fund. Most important, she was able to pursue her passion: competitive ballroom dancing. Joni spends up to $125 an hour for lessons, about $1,000 per competition, and $2,000 per costume. It amounts to serious money over the long term, but Joni designated her dancing hobby a priority, and she built her inheritance plan to include it. "Dancing is very expensive, but I've worked really hard at it for a long time," she says. "I would have had to give it up without the inheritance."

Financial legacies such as Joni's can afford a more comfortable lifestyle or deflate quickly. Too many heirs blow through such inheritances in short order. As many as 70 percent of people who receive a windfall fritter it away in just a few years, the National Endowment for Financial Education estimated in 2002. To manage your inheritance well, use this quick guide.