Investing Large Amounts of Money: Guidelines September 28, 2025

 Investing Large Amounts of Money: Guidelines

September 28, 2025

General Comments


Keep records of everything.

Scan everything.

It takes time. If you don’t have time, keep documents in a shoebox and scan / file when you have time. Devote one hour per weekend to do this. Pay bills on the weekend when you have time and the energy. 

Minimize saving hard copies. If documents are readily available electronically and not particularly important, don’t scan or save. But know how to access electronically. 

Inheritance

Upon Bruce’s or May’s death, the heirs could inherit a fair amount of money.

When the second of the two has died, the heirs will inherit the rest and it could be a fair amount of money.

There is no inheritance tax in Texas or Oregon. Kiri’s family and Laura’s family will not pay any inheritance taxes.

There is no estate tax in Texas. This only affects Bruce and May’s estate. This simply means Bruce and May’s estate will NOT be reduced by any state estate taxes.  Bruce and May are not affected by Oregon’s estate tax.

The federal (IRS) estate threshold for estate taxes is $14 million (rounded) per individual (May or Bruce) and $28 million (rounded) for couple (Bruce and May together). That number may adjust for inflation.

After the first spouse dies, the surviving spouse must file Form 709 (portability form) with the IRS. That should be an easy form, but the tax preparer will help. This form does not generate any tax liability. 

So, with that preamble, how should the heirs manage a large sum of money?

Until you sort it all out, this is what we recommend: 

The heirs: primarily the five grandchildren, but also Kiri, Laura, Tim, and Josh.

Each of the heirs should have a Schwab account established to make it easier to move assets from Bruce and May’s Schwab accounts to the heirs’ accounts.

Jargon: each heir should have a Schwab account; in that Schwab account there will be sub- accounts: investing account; a Roth IRA account; a checking account; etc. 

The surviving spouse can gift $19,000 per year per individual. No forms need to be filed with the IRS. No tax liability for either the donor (the surviving spouse) or the heir.

Specifics: 

First: 

• surviving spouse:
• use as much of the $19,000 for each heir to max out their Schwab Roth IRAs
• they may also have a matching program with their employee that is separate, e.g., a 401(k)

Second:

• each heir should establish a checking sub-account with their Schwab account
• keep around $5,000 in that checking account, but understand that money from other Schwab accounts can be moved to the checking account “immediately.”


Third:


• heirs and surviving spouse: keep your money working for you; don’t keep money in cash
• easiest thing: invest / park your money in Schwab ETFs until you understand more about investing
• Schwab ETFs
• SCHB: large, safe companies that may outperform the market; dividends minimal;
• SCHG: large, safe companies that will grow with the market; dividends minimal;
• SCHD: large, safe companies that offer more dividends, but may not appreciate (grow in price)
• only when you have $100,000 in your ETFs should you consider investing in individual stocks

Fourth: 

• surviving spouse: the 529 -- see separate page regarding a “529.”

Fifth: 

• heirs:
• each of the heirs should be generous with gifting to their own children first, then friends / acquaintances; 
• don’t gift to political parties (unless you want to be put on a lot of mailing lists); minimize gifting outside of one’s own family and friends (you will understand some day) — let your own heirs get the joy of gifting
• I particularly enjoy gifting friends and family members with specific amounts of money for specific needs, like airline fairs, etc.

Taxes:

• it’s likely you will be required to pay quarterly estimates to the IRS; prepare accordingly.
• your tax preparer will have the estimates.