4 Reasons To Say No to Your Inheritance
Written by
Chris Adam
Edited by
Cory Dudak
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You may have heard about the so-called “great wealth transfer.” In fact, according to Cerulli Associates, around $124 trillion in assets will change hands through 2048.
When it comes to your personal finances, it may seem like an obvious choice to accept an inheritance. But here are four reasons experts said you may not want to claim it.
You Don’t Need It
“Receiving an inheritance, whether financially or of physical objects, can be a good but often tough thing to work through,” said Brandon Gregg, certified financial planner (CFP) and advisor with BBK Wealth Management. “There’s the fresh memories of a loved one gone and the massive struggle of working through all of the estate documents and paperwork that comes with that.”
Gregg said one reason to say no is that you don’t need the inheritance. If that’s the case, you can save yourself time and hassles by simply passing up the opportunity.
You Don’t Want To Pay Taxes
Perhaps you decide you don’t want to deal with the taxes associated with an inheritance. Gregg said this is another reason to just say no.
“Most people see an inheritance as a blessing, but sometimes it’s a burden in disguise,” said Taylor Kovar, CFP and CEO of 11 Financial. “In one case, a parent passed assets straight to the grandkids by disclaiming, saving the family thousands in taxes.”
The Asset or Property Is Too Much To Manage
You may not have the desire, time or energy to manage the asset or property that’s part of the inheritance. Per Kovar, “I’ve seen folks inherit a vacation home only to find the taxes, repairs and HOA fees cost more than a luxury rental every year.”
It Doesn’t Fit in Your Financial Plan
Here’s where financial planning can come in handy.
“The key is to look at any inheritance as part of your entire financial picture,” said Joseph Spada, CFP and a private wealth advisor with Summit Financial. “With thoughtful holistic planning, you may find that declining certain assets aligns better with your tax strategy and long-term goals.”
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