Over the past 25 or so years, I have had the opportunity to witness hundreds of wealth transfers. Some have gone quite smoothly, and some have torn the family apart. I’ve seen seemingly simple situations get butchered with poor planning, and I’ve seen extremely complicated situations resolved without a hitch — with family unity still intact.

Leaving your children an inheritance is a blessing but inheriting some assets can also be a curse. Sure, your kids will appreciate what you leave them. But if the asset you’re giving away is too complicated to comprehend or hard to value, it could cause stress. Especially if the items you’re handing down require work, time, money or space.

Most children aren’t going to turn down inheritances that can make them money. However, sometimes your kids just don’t want your stuff. The fact is, not everyone will see their inheritance as a benefit. Some assets may actually be a headache to inherit and may even have hidden costs. Others inherited assets can cause arguments between family members.

The fact is, some assets are better than others to leave behind. In my experience, the closer the assets are to cash, the less difficult they are. The best asset to leave behind is cash and other brokerage accounts because they are easy to value and divide. Everything else gets a little more complicated. When it’s an asset people don’t understand, it’s very difficult to value and divide.

To avoid compounding your children’s grief when you’re gone, and to make things easier on your loved ones, here are six of the worst assets to inherit and what you can do to help manage them before you are gone: (Source: and

1. Timeshares

Timeshares seem like a dream come true: You have a vacation spot and don’t have to spend a fortune. Some even offer you choice in where you vacation. Even if you love your timeshare, think it’s a great deal and have had plenty of amazing memories, be very cautious about leaving it to the next generation.

But often timeshares can be a drain on your mental health and bank account. There’s an annual maintenance fee, utilities, and taxes, which can quickly add up. And getting out of a timeshare can be difficult and time-consuming. These contracts last decades, sometimes for life, and are notoriously difficult to get out of.

If you pass away and your kids inherit the timeshare, they’ll be on the hook for the ongoing – and ever-increasing – contract costs. If your family has decided they don’t want to inherit the timeshare and you no longer want it, you can try to get rid of it while you’re alive. How difficult this will be depends on the company. Some will simply buy you out or take it back (for a small fee).

You could also work with a timeshare exit company that specializes in getting people out of these arrangements. However, don’t expect too much. If you simply decide to abandon your timeshare, the company might send letters threatening legal action. If the timeshare is fully paid for, most companies will not take legal action against elderly customers who aren’t too concerned about a ding to their credit rating.

2. Vacation Homes

Vacation homes and other real estate can be a great asset to leave your children, as real property can appreciate in value. Yet, a vacation home does come with considerable expenses like increased property taxes (reassessed under Prop 19), maintenance, insurance and any remaining mortgage payments. These costs could outweigh the value of the vacation property to your heirs.

If the property is being split among multiple family members, vacation homes can also cause untold headaches and hassles. Disagreements can pop up over how often each can use the property, who owes what for the repairs, whether they should sell, and whether they should buy one of them out and at what value, especially if one heir lives far away and doesn’t want their share.

If you have a vacation home, start the inheritance discussion early with your heirs. Do they even want the property? If they want it, can you get them to agree on the terms? If it’s starting to look complicated and they can’t agree, the solution may be to sell. Yes, you’d owe capital gains taxes on any appreciation, but that could be a worthwhile investment to avoid a big fight.

If paying a ton of capital gains taxes doesn’t make any sense since: (1) the value is all gain; and/or (2) forgiveness of gain upon death isn’t that many years away, then you could leave instructions for your successor trustee to sell the vacation home after your death and divide the proceeds amongst your heirs. This could avoid a lot of strife and also give your children a step-up in basis increasing the value of their inheritance.

3. Potentially Valuable Collectibles

Whether it’s gold coins, a rare stamp collection or a fine piece of artwork, there’s something special about seeing your wealth in a beautiful physical form and then imagining handing it off to your loved ones so they can enjoy it too. Still, there are some substantial risks to leaving valuable collectibles as an inheritance.

First, there’s a much higher chance that your heirs could overlook or lose these valuable assets, especially if you’ve hidden them. Another problem with collectibles is that they’re tougher to value. It’s not like a bank or brokerage account where your heirs can just see the balance. Instead, they’ll need to go to a dealer and if they meet the wrong person, they can be taken for a ride.

If you do have any valuable collectibles, be sure to let your heirs know where they are, what they’re worth (appraisals are best, but a rough estimate will do) and suggest dealers they should work with after you’re gone. Otherwise, your loved ones are left to go through and clean out all your belongings or take on the added expense of getting your house cleaned.

4. Tangible Physical Property

Adult children don’t fight over your bank account, i.e., it’s easy to divide a bank account three ways. They fight about stuff, especially if it has sentimental value. For example, who gets Mom’s diamond wedding ring? I’ve seen brother and sister not talk to each other for years because the day after mom died the son backs a U-Haul truck up to the house and took out all of the valuables.

As an estate planning attorney, our living trust packages come with a section called a “Memorandum of Tangible Personal Property.” Parents are asked to list items that there could be some potential fight over, then to give instructions on who’s to get them. The receiver of the gift can be anyone, e.g., a friend, a neighbor, it doesn’t have to be a child. This way children can’t get mad at each other, “This is what Mom and Dad instructed.”

5. A Family Business

You’ve dedicated your whole life building your business, so it’s only natural to want to pass it down to your children. That’s great if they want it. But even if family members do seem likely to take over the business, that does not necessarily avoid conflict. There is an inherent conflict for those in the business who are compensated and may want to grow the business, and those who are passive owners and want to monetize.

However, if your family children can’t realistically be expected to carry on the business, your legacy is at risk. If your children aren’t interested, it’s advisable to look for a successor or plan for the sale while the founder is alive and can provide the hands-on transition that’s important for the continued success of the business that will maximize the sale price.

6. Guns

Guns can present considerable problems as inheritances since they aren’t something you can just had over to another person. The heir may need to set up the proper firearm permits for themselves to accept the property. The rules vary significantly depending on your state of residence and the type of firearm.

For example, if you inherit a firearm in California you are required by law to register the transfer of ownership or in some cases, dispose of it. The new owner must complete a firearms safety course and receive a Firearm Safety Certificate. However, certain rules do not apply to the transfer of a firearm by gift, bequest, intestate succession, if certain requirements are met, e.g., the person receiving the firearm is California resident and 18 years of age or older.

You could also work with a gun dealer so they could store your guns and then sell them after you pass away. The key is to plan early so you avoid a scenario where you’ve left guns in your car trunk or a garage. That can complicate matters for your heirs and is a safety risk. The new owner should check with a local gun shop to comply with all the rules and regulations.


In conclusion, some assets can cause problems. However, you can prevent problems and strive for family harmony with thoughtful estate planning. The best advice is for the parents to have an honest conversation with their children first. Many times, the heirs will express that they simply don’t want the property and, in those cases, the owner may want to sell it while they are still alive.

The bottom line is to plan ahead and address any potential issue to avoid conflict. Make it clear who will receive what to prevent arguments. If possible, try selling what you don’t need while alive. That way you’ll be leaving more of the simplest, most effective inheritance of all: cash.


Judd Matsunaga, Esq. is the founding partner of the Law Offices of Matsunaga & Associates, specializing in estate/Medi-Cal planning, probate, personal inury and real estate law. With offices in Torrance, Hollywood, Sherman Oaks, Pasadena and Fountain Valley, he can be reached at (800) 411-0546. Opinions expressed in this column are not necessarily those of The Rafu Shimpo.

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