<p>Please accept my condolences for your loss.
Sounds like you need a shelter for this money. Something that won’t count against your FAFSA. Its not quite enough to buy a house (unless you live someplace where 40K could get a small condo.) A retirement account perhaps? If you do decide to spend it, don’t just fritter it away, at least buy something that will hold its value or be resalable somewhere down the line. If you wait til after Jan.1 to receive the money, you will have a few months to invest it before your taxes are due. If you accept it now, it will be reported on this year’s taxes.</p>