14 Unexpected Ways a Surprise Inheritance Can Complicate Your Life

Receiving an unexpected inheritance may sound great. However, it is often quite challenging to handle, as it can change your financial landscape.

Depending on what you inherit, you might face legal and tax implications. Here's how to prepare yourself financially if you get an unexpected inheritance so you avoid costly missteps.

Settling an estate isn't a quick weekend project. Even with a will in place, the executor has a long to-do list — contacting heirs, paying off debts, filing tax returns, and figuring out probate.

If the deceased didn't leave organized records or assets are scattered, that timeline can stretch into months or longer.

Few things can tear apart a family like money.

Inheritances bring out family tensions. One sibling might think they deserve a larger cut than others. Arguments can erupt over sentimental items and fairness, especially if assets can't easily be divided.

If you're inheriting items with others, consider mediation to keep the peace and stay out of court.

Inherited IRAs and other retirement accounts bring their own set of complications. It might seem like a good idea to take the money and run, but this could create a big tax hit.

A financial advisor can help you strategize withdrawals in a way that keeps more of your inheritance in your pocket.

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When a five- or six-figure sum lands in your account, you might be tempted to let loose and spend it. But blowing the cash on a big purchase often leads to regret.

Instead, stash the money in a secure, FDIC-insured account while you map out goals. Make a list of financial priorities and talk to a financial advisor or other money professional.

Just because you're the listed beneficiary doesn't mean you'll get paid. Claims can be denied due to policy lapses, errors in the application, or misrepresented medical history.

Review the fine print carefully. If a claim is denied, consult an attorney, as you may still have recourse.

A business passed down in a will can ignite conflict, especially if not all family members were involved in running the operation.

Who runs the business now? Who profits? Should it be sold?

There's no one-size-fits-all answer. If you inherit part of a business, get legal and financial advice early to avoid drama.

Inheritance taxes can be hefty. This largely depends on where you live and the value of what you get from an estate.

You may also owe capital gains tax or income tax on what you inherit.

A good estate attorney can walk you through your state's specific laws so you don't end up with an unexpected tax bill or penalties.

Executors face a lot of responsibilities. Mismanagement can happen through poor recordkeeping, delayed action, or accidental mistakes.

If you're a beneficiary, don't stay in the dark. Ask for updates and documentation. If something feels off, consult an estate lawyer.

If you receive federal benefits that are based on income — such as Medicaid — an inheritance might impact your eligibility for such programs.

An injection of cash may mean you are no longer "low-income" in the government's eyes.

If you are planning your estate, there may be ways to set up trusts that will protect such benefits for your heirs after you die.

Sometimes, executors demand hefty fees that can reduce the size of the estate.

If you believe the executor is being heavy-handed, don't rush to litigation, as this could deplete the estate. Instead, consult a probate attorney on how to proceed.

In some cases, an inheritance unlocks long-hidden truths. Maybe the deceased had a secret bank account or a long list of debts. In some cases, you might even learn of a surprise sibling.

Be prepared for emotional fallout, and don't make rash moves. Unexpected family revelations can complicate everything from grief to asset division. Proceed carefully.

Once people learn that you have inherited money, distant relatives or friends may resurface to offer financial "opportunities" or to tell sob stories. Sometimes, even immediate family expects you to share the wealth.

Set clear boundaries and communicate your intentions early to avoid awkwardness later.

Some gifts are more of a burden than a blessing. Inheriting a property in disrepair or a home with a huge mortgage sure doesn't feel like winning the lottery.

If the asset requires more time, money, or emotional energy than it's worth, selling might be your best option.

It can get complicated when you share your inheritance with someone else. If you inherit a property — such as a vacation cabin or fishing boat — with siblings or cousins, you might be legally bound to share decisions.

When co-heirs can't agree, selling becomes one way out. So, be prepared for hard conversations.

An inheritance isn't just about what you gain — it's also about the responsibilities you are saddled with.

Before you cash in or sign anything, take a breath. Slow down long enough to understand what you're really getting into.

That way, you can preserve your sanity and family relationships, and avoid wasting money.