Four Inheritance Mistakes I See Young Clients Wish They Could Take Back
You don’t get a practice run with your first inheritance.
Take the scenario of a 28-year-old inheriting $600,000 from his grandfather. He’d spent six months making decisions he couldn’t undo. He wasn’t broke—but he was rattled. And he wished someone had told him what could go wrong before it did.
Inheriting wealth can feel like a gift and a burden at the same time. You want to honor what was left to you. You want to make smart choices. But without a roadmap, it’s easy to stumble.
From my perspective, here are four mistakes inheritors can regret most—and why they happen.
- Overspending Early
Money in your account can feel limitless at first. Especially if you’ve never had this much before.
People upgrade cars, take dream trips, or help family members—all within the first few months. Those aren’t bad things on their own. But without a plan, they can drain the inheritance faster than expected.
One inheritor spent $80,000 in eight months on things that felt important in the moment. When we worked backward, she realized she could’ve preserved more wealth by pausing and planning first.
The regret isn’t about enjoying the money. It’s about not giving yourself time to understand what you had—and what you could do with it.
- Taking Advice from Friends Who Mean Well
Your peers might have opinions. They might have had their own windfalls or investing experiences. But their situation isn’t yours.
I’ve worked with inheritors who followed a friend’s stock tip, invested in a startup without understanding the risk, or loaned money to someone they trusted—only to lose it.
Friends aren’t fiduciaries. They don’t have a legal duty to put your interests first. They’re not trained to evaluate tax implications, risk tolerance, or long-term goals.
Bad advice from well-meaning people can cost you thousands—or more. And the relationship fallout? That can hurt just as much as the financial loss.
- Ignoring the Tax Consequences
Inheritance itself might not be taxable in most cases. But what you do with the money could be.
Selling inherited stocks or property, cashing out retirement accounts, or making large gifts can all trigger taxes you didn’t expect. I’ve seen clients surprised by five- or six-figure tax bills because they didn’t know the rules.
One inheritor sold her late mother’s home without understanding capital gains implications. She owed far more than she’d budgeted for. It might have been avoided with planning.
Taxes aren’t something to fear. But they’re also not something to ignore. The right guidance can help you keep more of what was left to you.
- Not Planning Ahead
It’s tempting to think you’ll figure it out as you go. But wealth without a plan can disappear quietly.
I’ve met with inheritors years after receiving money—and they’re not sure where it went. It wasn’t stolen. It wasn’t lost in a crash. It can just… evaporate. A little here, a little there, without intention.
The clients who feel most confident? They’re the ones who took time early on to ask: What do I want this money to do for me? What matters most? What can I build with this?
Planning doesn’t mean locking everything away. It means creating clarity so your decisions align with what you value.
Inheriting wealth is a turning point. How you respond in the first year can shape your financial life for decades.
You don’t have to have all the answers right away. But you do need the right support.
That’s where working with a fiduciary advisor can make a difference. Someone who’s legally obligated to put your interests first. Someone who can help you understand taxes, avoid costly mistakes, and build a plan that reflects your goals—not someone else’s.
Introduction to Alex Gibbs & Measured Financial:
I’m Alex Gibbs, a Financial Advisor with Measured Financial. My mission is to build client relationships that go beyond financial investment. I’m committed to putting my clients first by building trust and providing value from day one. It’s not just an investment in securities—it begins with an investment in trust.
At Measured Financial, our goal is to broaden your investment opportunities through alternatives not entirely dependent on the stock market’s volatility. You’re treated with a personal touch. We strive for you to feel valued, heard, and understood every time we interact. We take your trust seriously. That’s why we’re straightforward, honest, and open in our communication with you.
If you’ve recently inherited wealth—or expect to—and you’re not sure where to start, let’s talk.
Visit https://www.measuredfinancial.com/contact-page-alex-gibbs/ to fill out a contact form. A real person will call you to schedule a conversation with me. No pressure. Just clarity.
Advisory services are offered through Tailored Wealth Management, LLC dba Measured Financial, an Investment Advisor in the State of California..
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