In sunny South Florida, inheritances often come wrapped in promises: a beachfront condo, a classic boat in dry dock, or an investment account that’s been quietly compounding for decades. But not all gifts are golden.

At Welch Law, we’ve seen it time and again—what was meant to be a blessing ends up as a burden. Before you accept that “generous” inheritance, take a breath. The gift may come with hidden costs that make it worth walking away.

Here’s what smart families in Palm Beach County need to know:

1. Big Inheritance, Bigger Problems?

If you’re building your own nest egg—and especially if you’re working with an estate plan of your own—an unexpected windfall could push your assets into taxable territory. This isn’t just a “rich people problem.” Inheritances can complicate Florida estate and gift tax strategies, even if Florida doesn’t have a state estate tax. The federal estate tax still looms large, especially if you’re trying to keep things simple for your kids down the road.

What to do: Meet with a Jupiter-based estate planning attorney (we know a guy) and look at the big picture before cashing that check.

2. Inherited IRAs: The Tax Bomb You Didn’t Expect

Think that old IRA from Aunt Joan is “free money”? Think again. Inherited retirement accounts like IRAs and 401(k)s don’t get a step-up in basis and are treated as taxable income. You could end up paying a large chunk of it to Uncle Sam.

And if you’re in a high-earning year? You might even get bumped into a higher tax bracket.

3. Family Drama in Paradise

Let’s say your parents left you the Jupiter condo and your sibling the empty lot in Okeechobee. Guess who’s going to be calling you—a lot. Unequal inheritances stir up emotional dust, even in the most “tight-knit” families. You may want to decline your share if it keeps the peace (and your holiday dinners) intact.

4. Beware the Inherited Lemon

Not all assets are liquid—or desirable. We’ve had clients offered:
• A timeshare in Daytona with sky-high maintenance fees
• A boat “with character” (aka mold)
• Vacant land in the middle of the Everglades

If you can’t sell it, insure it, or afford it—don’t inherit it.

5. Special Needs? Special Planning Required

If your child or loved one is receiving SSI, Medicaid, or any means-tested benefits, a direct inheritance could kick them off essential support programs. Disclaiming it doesn’t help—it’s still counted as a “gift.”

Better idea? Use a Florida Special Needs Trust. It allows your loved one to benefit from the inheritance without losing access to public benefits.

6. Disclaiming an Inheritance: How It Really Works

Disclaiming is the legal process of saying, “Thanks, but no thanks.” It’s not a casual conversation—it requires a formal, notarized letter filed within nine months, depending on the asset and jurisdiction.

One catch: You don’t get to decide where the money goes after you disclaim. It flows down the chain of succession or into probate, which can open its own can of legal worms.

What Should You Do Instead?

Talk to us—before the gift hits your bank account.

At Welch Law, PLLC, we help young families in Jupiter, Palm Beach Gardens, and throughout the Treasure Coast make confident, tax-smart decisions about inheritance, trusts, and generational wealth.

We’ll help you say “yes” when the time is right—and “no” when you should.

By: Edward J. Welch, Esq. ||| Estate Planning | Wills | Trusts | Asset Protection

If you would like to discuss your legacy options with an estate planning attorney in Jupiter or Palm Beach Gardens, Florida, schedule a complimentary call with Edward J. Welch at Welch Law, PLLC. At Welch Law, WE WANT TO DRAFT YOUR LEGACY!

Reference: USA Today (June 27, 2025) “Got a big inheritance coming your way? You may just want to say no. Here’s why”