So Uncle Harry's estate has finally been settled and you have been blessed with both his extensive wardrobe and a tidy sum of his investment portfolio. Harry was not only the sharpest dresser in the family, but the financial guru as well.

Now, if you can just nurse your new holdings along, you may someday be able to retire in the standard to which you would like to become accustomed.

First, however, there is the little matter of Harry's clothes taking up most of the spare bedroom. They need some immediate attention. Your guests coming up for the weekend will hardly have room to maneuver.

But, now that you take a closer look, nothing seems to fit; the styles are way outdated and they are all men's clothes, not very appropriate for Harry's niece. Sorry, Harry! Your clothes are off to the Salvation Army Store.

That was simple. Just don't stop now. Apply some of that same logic to the stocks, bonds, and other investments sitting in your new brokerage account.

Inheriting money is often a time of highly mixed emotions. Grief, pleasure and, sometimes, guilt combine for an experience that isn't easy to transition through. Decisions need to be made as to what to do with the new funds and, as is often the case, the beneficiary hasn't been prepared for the bequest. Simply keeping the inheritance intact and doing nothing else is often viewed as the best solution.

Unfortunately, this can be a real mistake.

Like dealing with Uncle Harry's clothes, you need to sit down and go through the inventory of assets to determine what is a good fit for you and what should be consigned to the trash bin.

As a guide, here is a number of things to keep in mind:

(1) What are your Objectives?

Harry may have lived off his dividends for the last twenty years but, if you need growth instead of income, you need to look at the portfolio from your perspective. Harry may have owned the greatest bonds since Barry Bonds but, if they dont fit your objectives, how valuable are they?

(2) What is your Risk Tolerance?

If Harry never met a "penny" stock he didn't like and you think pennies belong in loafers, you should probably reconsider the risk tolerance of the portfolio.

(3) Was Harry doing any tax planning prior to his death?

Check with the executor of Harry's estate to determine the "stepped up" tax basis of the securities you've inherited. If you do sell some of the investments, you should know what your potential capital gains might be. You'd be surprised at the number of securities that are retained in a portfolio simply because the owner doesn't want to incur a capital gains tax. When a security passes by inheritance, it acquires a new tax basis determined by the date of death value (yeah, I know there could be a six-month alternate valuation date, but Im trying to keep it simple here), and that new tax basis is often just the excuse needed to weed out a security that hasnt performed well in years.

4). Is the portfolio looking a little "frayed" around the edges?

A security held for the past 25 years may have as much relevance in today's economy as a polyester leisure suit has in today's world of fashion. Pet Rocks, Inc. may have been Harry's comeback kid but, let's face it, it's probably seen its better days. Drop it like a bag of well . . . rocks.

So, if youre one of the 100 million individuals who will inherit money this year, congratulations! Treat it wisely and it will return the favor many times over.