Traditionally, the old are proud to leave an inheritance for their loved ones, and the younger generations are grateful to receive an inheritance from their relatives. After all, it’s a legacy or heirloom being handed down through lifetimes, which is definitely an honor anyway you look at it.
An inheritance is a gift, and all gifts are good, right? Unfortunately, that’s not always the case. Sometimes, an inheritance gives people more headaches and trouble than peace and joy, making them reluctant to receive it. There are certain times when it may cost you more to receive the inheritance than not to.
If you plan to leave your children an inheritance (or you know your parents or grandparents are considering leaving one), you may want to reconsider these assets. We selected these pain points based on expert insight from Yahoo Finance.
1. Assets with No or Insufficient Insurance
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Receiving a significant asset is wonderful, and many people would be delighted to be the new owners of the little house on the hill (or wherever it might be). However, if the property is damaged and there is no insurance coverage, there may be significant financial consequences. The replacement or repair expenses, legal fees, and possible loss of income or property value can be debilitating, taking the benefits out of the inheritance.
2. Digital Assets
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There’s a lot of intangible wealth today stored up online in cryptocurrencies and other forms of digital assets. Unlike houses and bank accounts, digital assets are trickier to inherit, especially if the beneficiary doesn’t have sufficient knowledge, hasn’t shared their information with anyone else, or if the digital asses or the benefactor forgets their passwords. Without the right knowledge, accessing these assets can become a total nightmare.
3. Timeshares
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Lovers of traveling who signed up for vacation ownership may want to transfer these timeshares to their loved ones as an inheritance. While this is a sweet gesture, timeshares come with their fair share of inconveniences—they frequently have restricted flexibility and expensive maintenance costs.
The beneficiary may also not be fond of traveling, or they may not exactly fancy your choice of resort.
4. High-Maintenance Pets
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Owning a pet is a personal choice; not everyone fancies being a pet parent. While inheriting a chinchilla may seem sweet, few people have the time, patience, or know-how to care for a high-maintenance pet. Exotic pets or animals with special needs can be costly and time-consuming.
5. Artwork with No Authentication
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Some people love art, others don’t really care for large pieces of canvas with pictures on them. While some artwork may be worth money, its value may be difficult to establish if they are unauthenticated.
6. Neglected Property
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Property is at the top of the list of frequently inherited things. Inheriting a good and highly valued property is an inheritance jackpot, but that jackpot becomes a pot of coal if the property is in disrepair and needs extensive repairs. The cost of renovations and repairs is frequently very high for neglected houses. The price of repairing structural problems, updating systems, and improving appearances rises rapidly if proper maintenance is neglected.
7. Collections with No Market
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Collectibles are only as valuable as their demand in the market. Inheriting a collection that no one thinks has value leaves you with old things you can’t dispose of. Finding a buyer for old postage stamps or things that have lost their attraction in the market can be difficult. Changes in customer preferences and interests may make some collections less appealing or even out of style.
8. Assets Entangled in Legal Disputes
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Legal disputes are like gangrene on a property; they keep getting worse, and you may lose it altogether if it’s not resolved. Inherited assets entangled in litigation require a large investment of time and money to settle, which leaves people anxious and stressed.
9. Non-liquid Assets
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One would be happy to get an investment that’s easy to dispose of when we need money. Inheriting an asset that’s difficult to sell quickly can tie up funds, and the process of trying to liquefy such an asset is also stressful. Examples include houses, cars, land, and jewelry.
10. Outdated Technology
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Because of their age and decreased market demand, outdated technology and equipment sometimes struggle to create meaningful resale value. An old fax machine or typewriter may be a good living room display, but you may not get any financial benefit from it.
11. Storage Units
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A storage unit full of valuables or easy-to-sell stuff is a fantastic inheritance (if you have the time to sort through it, that is). However, a storage unit full of junk that requires time to sort is a stressful inheritance. It might all end up at the local dump or thrift store if it gets too overwhelming.
12. Guns
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Depending on the laws of where you live and your personal preferences, inheriting a gun can be very conflicting. People feel differently about firearms, and not everyone is comfortable keeping one, especially if they are opposed to gun ownership or don’t have a safe setup at home, such as a secure safe.
Inheritance goes beyond simply transferring assets from one person to another. Certain assets might have many responsibilities and difficulties, from debt to legal issues. When negotiating the complexity of inherited assets, an individual should carefully consider the potential consequences and seek expert help to minimize risks and maximize prospects for financial well-being.