¶ … inheritance of 10,000k. There are several options presented as follows: Alternatives Available

Invest the Money

Invest Part of the Money, Spend Rest

Invest Part of the Money, Pay off Debts

Pay off Debts

Spend Entire Sum

Criteria Used to Evaluate Alternatives

The criteria used to evaluate the alternatives will include a simple cost-to-benefits model. This will help determine the alternative that best meets the criteria. To assist the researcher in determining the best option the researcher used information gathered from several existing methods including research gathered from several business journals. One thing that must be considered first and foremost is the law. In considering an inheritance the researcher will want to keep in mind the law and what taxes might be assessed if he spends the inheritance or if he uses the money to pay off debts. There are many states for example, that would not charge him the inheritance if it is under 30k, such as in CO. According to the Fordham Law Review (2004) it is vital to follow carefully...

Hirsch (2004) posits and interesting question; is it a smarter choice to promote efficiency of purpose or to minimize the costs of spending or utilizing an inheritance? This researcher believes the best course of action is to minimize costs AND to promote efficiency of use.
Given this the cost to benefit analysis would provide the following details. Regarding choice one: if the beneficiary were to invest the money, chances are high he would receive a high return on his investment and be able to spend more and pay off more debts. The downside to this is that the reward would not be instantaneous. In fact the beneficiary would have to wait at the very minimum five to ten years to realize any benefit from the inheritance.

Regarding option two: the beneficiary could decide to invest part of the money and benefit immediately by spending the rest. This might require a longer period to receive any reward from the investment because the amount of the investment is much smaller. However, there are still rewards to be reaped depending on the type of…