Staying Fit
Leaving your children an inheritance is a blessing, but it can also be a curse, particularly if the items you’re handing down require work, time, money or space. Consider complicated assets like an antique car or a digital wallet full of cryptocurrency. Sure, your kids will appreciate these assets, but if the possession you’re giving away is too complicated to comprehend or hard to value, it could cause stress.
“When it’s an asset people don’t understand, it’s very difficult,” says Jean-Luc Bourdon, founder and wealth adviser at Lucent Wealth Planning. He once had a client who inherited a unique car but didn’t know what to sell it for or whom to trust. Instead of unlocking the value, she held on to the vehicle.
AARP Membership— $12 for your first year when you sign up for Automatic Renewal
Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine.
Even IRAs and 401(k)s can be problematic, since they aren’t easy to transfer to the next generation or your children hold on to them for sentimental value. The same goes for expensive furniture, ceramics and collectibles that take up space or are hard to get rid of.
“The most common assets [kids don’t want] have some type of obligation attached to them to maintain value,” says Joseph McNair, a certified financial planner at WA Asset Management. “The closer to cash the assets are, the less cumbersome they are.”
Most heirs aren’t going to turn down inheritances that can make them money, but there are a handful of possessions they may not want, including these four.
1. Property
Vacation homes, farmland and other real estate can be a great asset to leave your children, as they can appreciate in value. But they can also cause untold headaches and hassles if there’s a lot of maintenance and expenses involved. Strife is another issue if the property is being split among family members. “I’ve seen a lot of siblings get along well before their parents pass, and then the fighting starts,” says Molly Ward, a financial adviser at Equitable Advisors. “One family had a gorgeous property, but never in a million years would the kids want it.” You also have to pay expenses, such as taxes, utilities and upkeep, and if you can’t sell the place, it could become a drain on your finances and time.