Q: Last night my husband found out that he would receive a sizable inheritance from an uncle who died last year. The inheritance will come in the form of a stock portfolio. We need help. A Smith-Barney account will be set up and the stocks will be transferred into his name. We have so many investment issues now that we are overwhelmed. Do we keep everything in stocks, do we move money for the kids college, do we sell some to redo our kitchen (which we were getting ready to do by refinancing our house). How do we go about finding someone who can help us keep this money growing for us and the kids.

A: First, my condolences on the loss of your husband’s uncle. There’s always something bittersweet about receiving an inheritance. I get many letters from listeners and readers who worry about not losing the inheritance due to poor financial decisions — in fact, they’re so worried that they end up doing nothing!

You should sit down with a fee-only financial planner who can help you evaluate the stocks in your old and new portfolio, as well as the financial impact it will have in the short and long-term.

A fee-only financial planner will charge you hourly, like an attorney, for his or her advice. You can find one by calling 888-FEE ONLY, which is the number for the national association of personal financial advisors.

As for whether you should finance your kitchen redo or sell some of your newly-found wealth, wait to sit down with the financial advisor first and go through the numbers. Only then can you determine intelligently how to pay for your home improvement.

Q: My mom is elderly, she is cash poor but has a 300k home which she is willing to me upon her death. Is there any way to avoid inheritance taxes by having her “gift” some of the equity in the home to me? Please help.

A: If your mom dies this year, she could pass down $750,000 in assets tax-free. That number is going up next year. So, there’s no reason for her to “gift” you any equity now, since you’ll inherit the property tax free some day, depending on her other assets.

Q: I enjoyed hearing about you on NPR and hope you can give me some insight.

In a Q&A a column written by another financial adviser often seen on public broadcasting (who shall remain nameless), she advised a couple who was inheriting several hundred thousand $$ to use the money to pay off their mortgage.

I am also inheriting some money and wonder if this is a smart tactic.

Perhaps I’m looking at the figures wrong, but here was my analysis. Over the 30 years of my $192,900 mortgage, at 6.625%, my amortization table says I will pay interest of $251,757.33. My compound interest calculator says that if that same amount (my inheritance) is invested at 6.625% for 30 years, it will earn $1,124,619.86 (compounded annually). So, since it appears I would earn 4 1/2 times as much interest as I would pay out, it seems to be a bad move for me to use my inheritance to pay off my mortgage, (not even taking into account the tax advantages of the mortgage.)

Am I looking at this correctly and do you agree, or is there some hidden advantage to using the inheritance to pay off that mortgage?

A: I don’t know who the other financial advisor is, but I think you’re on the right track. In fact, because you probably write off some of the interest, your net interest on your mortgage is probably more like 5.5 percent, or perhaps less. And, if you invest the money over a long period of time, you might earn substantially more than 6.625 percent on your money. So the rewards of investing the money are greater.

However, if you were not going to actively manage your money and instead were going to allow it to sit in a money market account earning 2 percent, the tables would be turned. Then, you’d be borrowing money at 5 percent and earning it at 2 percent, thus eroding your principal over time.

If circumstances changed in your life, and you were no longer writing books or earning an income, you might want to pay down your mortgage so that you weren’t cash poor each month (assuming this was all the cash you had). But if that were the case, I’d suggest you move rather than spending all of your available cash. (Or, get a reverse mortgage.)

Bottom line: I’d invest in a diversified portfolio and see how it goes.

By the way, congratulations on all of your books. My 7th book was just published. It’s called 50 Simple Steps You Can Take to Disaster-Proof Your Finances. You can see it on my website. www.Thinkglink.com.

Q: I have received an inheritance from my mother. This was so important to her that I had this money. I’m so afraid of investing it. Where can I put it without fear of loosing it. I know that I won’t beable to make a big profit without gambling, but that’s something I’m not willing to do. I really enjoy listening to you when you fill in for Clark.

A: Your mother wanted you to have this money to help create a solid financial future for yourself. To do that, you need to invest it wisely. I suggest you go to Vanguard (www.Vanguard.com) or Fidelity Investments or Charles Schwab (www.Fidelity.com, www.CharlesSchwab.com) and open up a couple of mutual funds.

First, you’ll want an S&P 500 index fund (try to get one that’s tax managed so there’s no tax bill at the end of the year). You might also want a total market fund (mirrors the return of the overall market, which some overlap of the SP 500 fund, which mirrors the return of the 500 biggest stocks). Finally, you may want to pick a growth mutual fund (Go to www.morningstar.com and find one that has 4 or 5 stars and a solid 15-year return).

Then, you basically want to forget about this money. As long as it grows 8 to 10 percent per year, you’re beating inflation and setting yourself up for solid returns over the long haul, which you need for stocks.

The other thing that will combat your fear is information. Pick up a copy of my book, 100 Questions You Should Ask About Your Personal Finances and read the investing chapters. I think once you acquire some knowledge in this area, your fear will lessen.

For a more current status of the Estate Planning issues, see the following article:

Estate Tax Planning Nearly Impossible For 2010 And Beyond