re: Inheritance forthcoming for a person with nothing

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Where would he park the 250K to generate $2,000 a month? That's $24,000 a year, so almost a 10% annual return.

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Well that was just an example and probably not a great one. But even if he had to touch some principle every now and then it would last him 10 years just on principle alone, so it would likely be 30 years invested 80/20 stocks/ bonds in the very very least. I'd take those odds for the guy in that situation.

Everyone is offering advice (which is fine), but I don't believe we've heard how old this person is or whether he has a family in the picture.

Money advice to a single guy in his 20's is going to be different than what would be given to a 30 something with a wife and three kids.

What I would have said. This money isn't anything "life changing" unless he uses it ito improve his situation. As you said, if he can pursue an education to increase his income that's the best strategy.

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I have not had a chance to call my accountant and do not have a lawyer.

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Call your accountant and/or have a lawyer.

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how we properly take it as far and income/taxes are concerned

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The only taxes owed on that sum will be what your FIL owed taxes on himself, the money transferring to you should be tax free. There is a $5.5 mil exclusion, so anything under $5.5 mil per person (a couple is $11 mil) is tax free.

So the estate will have to be cleared of any debts, then it will be transferred to you.

Honestly, the absolute best bet would be to tell him to take some of it and blow it. He's likely to do that anyway, say $30k. Buy a truck, go on a cruise, go to biloxi for a long weekend.

Then talk him into giving the rest to a financial advisor with monthly draws. And to never touch the principle.

The problem with someone like him buying a house, is he has to pay taxes and everything else. That's not difficult for most people, but the fact is tax foreclosures happen. I think it'd be best to limit his responsibilities until he is more responsible as much as possible.

While a trailer goes down in value, if you buy a used one its not that much. You can buy a used trailer in the country on a couple acres for $40k fairly easily. In 10 years, its likely that trailer is worth basically the same amount as the land has increased in value while the trailer has lost 50% or so.

What Monty said. Find someone who will manage it as a trust that he can't tap, I don't know the legalities of how that is set up but it isn't uncommon.

It might generate a thousand a month or so (that's 4% of 300k). It isn't like he can just retire immediately but for someone who is "working poor" it's a big help.

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Everyone is offering advice (which is fine), but I don't believe we've heard how old this person is or whether he has a family in the picture.

Money advice to a single guy in his 20's is going to be different than what would be given to a 30 something with a wife and three kids.

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Yep. Very important to know. $300K is a good chunk of money but not enough to last the rest of this persons life.

Just to echo what most everyone else has stated and to make some general assumptions:

Take a nice little vacation. Do a few things he has always wanted to do.

Get a good USED vehicle, around $20-25K. New vehicles are for OTers only.

6-12 month 'emergency' fund.

Start looking for a few acres and get a good quality trailer-house or buy a 'fixer-upper' in a good neighborhood.

Get some good health insurance if he doesn't have any.

According to the OP, the guy is dirt poor so apparently he has little or few job skills. Don't waste his time AND money on a useless four year college degree.
Find a good reputable vo-tech training school, ie auto/diesel mechanic, welder, electrician...Make sure its a field that is in demand though.

Start socking away money for retirement. Roth IRAs, bonds, mutual funds, 401k...

Congrats to your friends windfall. Tell him to spend it wisely.