Inheritance investment: the complete guide to investing your capital wisely

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Receiving an inheritance generally changes your financial situation overnight. Whether the sum comes from a bank account, a life insurance policy or the sale of a property, the question of where to invest inherited money arises quickly: how to make it grow without taking undue risk, at a time when you need it least? Between savings accounts, life insurance, real estate through SCPIs or more dynamic asset classes such as private equity, there is no shortage of opportunities, but each one meets a different objective and investment horizon. This guide reviews the steps to follow, the available vehicles and the strategies suited to each situation, before looking at how support, whether human or through a platform such as Fundora, can secure your decisions.

What to do when you receive an inheritance?

The first thing to do after a death and the opening of an estate is not to rush into an investment. The law imposes a waiting period before the estate is definitively settled and the sums are paid to the heirs, while the notary calculates the inheritance tax and draws up the division of assets. This period, often several months, is an opportunity: it lets you step back before deciding where to invest the money received.

Once the sum is available, it is common to leave it for several weeks in a current account or a savings account, while a project takes shape. This is good practice as long as the reflection remains reasonable: money that sleeps for too long loses purchasing power to inflation, but an inheritance invested in haste, under the influence of emotion, is one of the main causes of avoidable capital loss.

This particular context explains why the question of inheritance investment arises differently from a standard investment. The sum often arrives all at once, without having been anticipated in a savings plan, and is frequently accompanied by an emotional burden linked to the death. Taking the time to put things down in writing, your resources, your projects, your deadlines, before contacting anyone, helps you approach the following decisions with more perspective.

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The key steps before investing an inheritance

Before choosing a product, several steps must be followed to build a coherent wealth strategy.

Define your objectives and investment horizon

An inheritance is not meant to be invested in the same way depending on whether it is used to prepare for retirement, finance a property project in two years or pass capital on to your children. The first reflex is therefore to list your objectives and associate a time horizon with each: short term (less than 3 years), medium term (3 to 8 years) or long term (more than 8 years). This horizon directly determines the acceptable level of risk.

Assess your risk tolerance

Every investor has a different risk tolerance, which depends on their personal situation, their income and their ability to bear a temporary loss of value. An investment in equities or private equity can offer a better return over time, but it involves a risk of capital loss that you must be prepared to accept. Conversely, relying only on secure products protects the capital but strongly limits the return, especially after inflation. This risk tolerance is not fixed: it changes with age, family responsibilities and other sources of income, which is why it should be reassessed regularly rather than determined once and for all at the time of the inheritance.

Take stock of your overall wealth situation

Investing an inheritance should not be thought of in isolation. It fits into an overall wealth situation: main residence, savings already built up, ongoing loans, professional income. Learning to manage your wealth well before even investing new capital lets you allocate this sum intelligently across the different asset classes already present, rather than duplicating an existing allocation. Inherited capital added to savings that are already well diversified does not call for the same strategy as a first large sum received by a young professional who has not yet built up anything on their own.

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The best vehicles and investments for an inheritance

Once your objectives and risk profile are defined, the task is to choose between safety, return and diversification among several vehicles and investments that can make the inherited sum grow.

Life insurance, the versatile vehicle

Life insurance remains the most widely used vehicle for investing an inheritance in France. It makes it possible to hold both euro funds, with a capital guarantee, and unit-linked contracts invested in the financial markets, within a single tax-advantaged wrapper after eight years of holding. It is also an effective transfer tool, which makes it a natural option after an inheritance, particularly for preparing in turn the transfer of this capital. The split between euro funds and unit-linked contracts is managed over time, according to changes in the situation and in the policyholder's risk tolerance, which makes it an evolving vehicle rather than a fixed choice made at the outset.

Savings accounts (Livret A, Livret d'Épargne Populaire) for emergency savings

Before any more dynamic investment, it is recommended to keep emergency savings available in regulated savings accounts such as the Livret A or, subject to income conditions, the Livret d'Épargne Populaire. These products offer full liquidity and no risk of loss, at the cost of a limited return. They are not designed to grow a large sum over time, but to cover unexpected expenses.

Term deposits and euro funds for short-term safety

For a short-term safety need on an amount that exceeds the ceiling of regulated savings accounts, term deposits and life insurance euro funds are suitable solutions. A term deposit locks the sum for a defined period in exchange for a rate set in advance, while euro funds remain available while offering a capital guarantee. Neither aims at a high return: their function is to secure part of the capital while the rest of the strategy is built.

SCPIs to invest in real estate without direct management

Real estate investment companies, or SCPIs (sociétés civiles de placement immobilier), make it possible to invest part of an inheritance in rental real estate without the constraints of managing a property directly. By buying shares, the investor receives regular income from rents, pooled across a diversified portfolio of properties. It is an interesting option to diversify beyond the financial markets, but with a risk of capital loss and lower liquidity than a listed fund: reselling SCPI shares can take several weeks to several months. SCPIs also exist in a more tax-efficient version for inheritances, held within a life insurance policy rather than directly, which makes it possible to benefit both from the real estate return and from the favorable taxation of the wrapper.

Private equity, an asset class long reserved for institutional investors

Private equity, or capital investment, consists of investing directly in unlisted companies, at different stages of their development. Historically reserved for institutional investors and family offices because of very high entry tickets, this asset class shows over the long term private equity returns that often exceed those of listed financial markets, in exchange for a longer lock-up period and a real risk of capital loss.

An inheritance, because it often represents capital available all at once and with no immediate deadline, is a good moment to consider an allocation to private equity within a diversified wealth strategy. This asset class does not replace the other vehicles presented in this guide: it rather complements them, on the part of the capital whose investment horizon exceeds several years and for which immediate availability is not required. Before getting started, this guide to the fatal private equity mistakes to avoid usefully complements this reflection. Platforms such as Fundora were designed precisely to make this asset class accessible to individual investors, by pooling subscriptions.

The retirement savings plan (PER) and the home savings plan (PEL)

If part of the inheritance is intended to prepare for retirement, the retirement savings plan (PER) allows you to deduct payments from your taxable income, in exchange for capital locked in until retirement, except in cases of early release. The home savings plan (PEL), for its part, remains relevant for a medium-term property project, with a rate guaranteed at opening, even though it has lost some of its appeal with the fall in the rates offered on new contracts.

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Investing an inheritance according to your profile and objectives

After this overview of the available vehicles, the logical next step is to combine them according to your profile and objectives. There is no single right answer to the question of where to invest an inheritance: the split between vehicles depends directly on each person's situation.

Securing capital in the short term

If the plan is to use all or part of the capital in the coming months or the next two to three years, the priority goes to safety: savings accounts, term deposits and euro funds. The goal is not return but availability and the absence of risk of loss. This is typically the case for an inheritance intended to finance a property purchase planned in the short term or to cover a period of professional transition.

Making capital grow on the financial markets

For the part of the capital that has no immediate destination, a long-term investment horizon makes it possible to seek a higher return through equity markets, unit-linked contracts in life insurance or alternative asset classes such as private equity. This part of the capital should be the part whose temporary loss of value, in the event of a market decline, would have no consequence on daily life. The longer the horizon, the more it becomes possible to accept short-term variations in value in exchange for higher return potential over time.

Preparing for retirement or passing on your wealth

An inheritance can also be an opportunity to prepare your own retirement through a PER, or to start to build wealth intended for your own children through life insurance, which remains one of the most flexible and tax-advantageous transfer tools in France. In both cases, the objective is no longer immediate availability but building capital over the long term, which opens the door to more dynamic asset classes, including private equity, alongside more traditional vehicles.

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Mistakes to avoid after an inheritance

Several mistakes come up regularly among heirs who invest their capital in haste or without a method. They are often easy to avoid once you take the time to identify them in advance:

• Putting everything into a single product or a single asset class, which exposes all of the capital to the same risk.
• Investing under the influence of emotion, particularly after a death, a period when important financial decisions are harder to make calmly.
• Neglecting taxation and the inheritance tax already paid, forgetting that some investments have their own taxation to include in the overall strategy.
• Ignoring your real investment horizon and locking up capital you might need in the short term.
• Not getting support when the amount and the stakes justify it.

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Getting support to invest your inheritance

Faced with the number of options and tax issues, getting support helps avoid most of these mistakes and build a strategy suited to your situation. This support can take several forms, from the traditional wealth management advisor to a specialized platform, depending on the nature of the capital to invest and the asset classes considered.

The role of the wealth management advisor

A wealth management advisor helps formalize objectives, assess risk tolerance and allocate capital across the different vehicles according to taxation and personal situation. A meeting with an independent professional also makes it possible to challenge your own decisions and avoid biases linked to urgency or emotion. In this respect, a second opinion costs nothing and lets you check the consistency of a strategy before committing.

How Fundora supports investors after an inheritance

Fundora identifies and offers private equity strategies from the global top 25% of funds, with actual management carried out by Kyoseil Asset Management under the mandate, a portfolio management company approved by the AMF. In practice, Fundora relies on FPCI structures coupled with SPVs that pool the subscriptions of several individual investors within a single vehicle, which then invests in the selected target funds. This mechanism significantly lowers the entry threshold compared with a direct subscription to an institutional fund, with the minimum amount varying according to the strategy open for subscription.

For an heir who has available capital and a sufficiently long investment horizon, allocating part of this sum to private equity through a platform such as Fundora makes it possible to diversify beyond classic vehicles, while benefiting from a regulated framework. This is notably the case for growth equity or secondary private equity strategies, two approaches accessible through Fundora and suited to capital received all at once. You can find out in detail how to invest in private equity with Fundora.

Whatever choice you make, keep in mind that investing an inheritance is a decision that commits your financial future for several years. Taking the time to think, even if it means seeking several opinions, remains the best way to approach this stage calmly.

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FAQ

How long do you have to invest an inheritance?

There is no legal deadline for investing an inheritance once the estate has been settled. It is even recommended to take the time needed, a few weeks to a few months, to define your objectives before making an investment decision. The only point of vigilance concerns money left earning nothing for too long in a current account, which loses purchasing power to inflation.

Should you put everything into a single product?

No. Spreading the capital across several vehicles and asset classes, according to the horizon of each part of the sum, limits the risk of loss and makes it possible to meet different needs: safety, return, transfer. This diversification also protects against the hazards specific to a single type of investment, whether a fall in the financial markets or a weak return on one particular product.

Is an inheritance subject to income tax?

The inheritance itself is subject to inheritance tax, paid when the estate is settled, and not to income tax. However, the income subsequently generated by investments made with this sum is taxed according to the taxation specific to each product.

Which investment should you choose if you do not want to take any risk?

Regulated savings accounts (Livret A, Livret d'Épargne Populaire), term deposits and life insurance euro funds offer a capital guarantee, at the cost of a lower return than investments exposed to the financial markets.

Can you invest an inheritance in private equity with a small amount of capital?

Platforms such as Fundora pool the subscriptions of several investors through FPCI and SPV structures, which lowers the access threshold to private equity strategies that are usually reserved for institutional investors.

Should you consult an advisor before investing an inheritance?

It is not mandatory, but it is strongly recommended as soon as the amount is significant or the objectives are multiple: a wealth management advisor helps structure a coherent strategy and avoid decisions made in haste. They can also challenge an allocation already under consideration before it is committed.

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