getting 500000 from death settlement

The extent to which the actual settlement payment will be taxable income to you, if any, is likely already determined and there may not be anything you can do at this point to avoid those taxes. As for the funds themselves, you really need to seek the help of a competent financial planner to help you determine the best ways to invest the funds. Avoiding or reducing income taxes is part, but not all, of determining the best way for you to use the funds. Keeping everything in cash is very likely NOT the best answer. A good, tax-focused CPA can also be greatly helpful. And you should likely consult a good estate planning attorney to ensure that you have a good power of attorney and Advance Directive in place for yourself, and that you have a Will or trust in place so that, if you pass away, any remaining assets you have will pass to your intended beneficiaries in a beneficial manner.