First update your estate documents.
Were I in your position I would put as much in a Roth IRA as the tax code allows, fill up my regular IRA and let it run, postpone taking SS. If your children (or grandchildren) are years away from entering college fund their 529 accounts. Spend down your inheritance because your IRA investments will grow tax free. Eventually you will be forced to take minimum required distributions which will fill up your cash account.
You and your significant other should make a spending plan. What do you need for daily expenses and experiences on your bucket list. You can always tap your IRAs if s..t happens and you need cash for an unexpected expense. If you really have excess cash then invest a portion that you don't think you will need for about 5 years.
One personal opinion about paying for your children's education: make sure they have skin in the game. After they have completed the education that s/he is willing to pay for you can always pay off their school loans.
Many good points. Since we are both retired I don't think there is a way to put stuff in an IRA. I think the advice of putting a portion away for unexpected expenses is a good idea. Will also put a nice chunk away for travel.
I am practicing your advice about the kid's education right now. I pay the tuition and give them a few bucks now and then, but they pay for room and board. They both have jobs of about 15 hours a week and I think that is good for them. 2 years in neither has any debt. I had to work my way through college without any assistance but didn't want them to go that route. So far it has worked out nicely.
I will state that the inheritance has been a game changer for us. It jumped our NW by over 1/3 and now we are VERY comfortable. I just don't want to get TOO comfortable but will "blow some dough" now and then LOL.