Come Into Money? The ‘Do Nothing’ Reddit Rule Could Save You From Costly Mistakes
Winning the lottery and getting a surprise windfall is certain fun to daydream about. An unexpected inheritance for the same amount, though? Not so much.
When one Reddit user recently shared that they had unexpectedly inherited more than $1 million assets — including savings, investments and a pension — after their sister died without will, they weren’t asking what to buy or where to go on vacation. Instead, they were asking how to be fair to the rest of their family during this emotional time. The thread quickly filled with advice, but one theme rose above the rest: don’t rush.
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Let’s call it the “do nothing” rule. No, it doesn’t mean ignoring the money forever, though. It means resisting the urge to make big financial moves before the emotions — and the paperwork — have settled.
Grief and Money Are a Risky Mix
The original poster explained that they wanted to divide much of the inheritance among their surviving siblings, but wasn’t sure how to handle a pension that named them as the sole beneficiary. While the numbers were complicated, commenters argued that the biggest danger wasn’t the math — it was making permanent decisions while grieving.
One Redditor offered perhaps the clearest version of the “do nothing” rule: “Let it sit for a year or two. Just pretend like [the money] doesn’t exist. You’re grieving. Give it time to cool off and think with a clear head.”
Others echoed the sentiment with cautionary takes. “Estate can tear apart even the closest families,” said one commenter. While another warned: “Ugly heads always show up on the death of a family member.” Several Reddit members shared stories of siblings who stopped speaking over inheritances worth far less than this one.
Don’t Let Taxes Surprise You
The comments also raised another reason to pump the brakes: taxes.
One user who had experienced a similar situation cautioned that withdrawing inherited funds before redistributing them could create an unexpected tax bill. “Definitely speak with a CPA,” the user wrote, after describing how being the sole beneficiary affected their own taxes.
Another commenter reminded the original poster to make sure taxes were accounted for before dividing any money, noting that failing to do so could leave the person handling the estate footing the bill.
The overall consensus: Before you write checks, know what you’re actually working with — another reason to do nothing at first and take stock of the situation.
What the Experts Recommend
“Doing nothing with an inheritance is better than spending it immediately," said Melanie Musson, financial expert with Clearsurance — adding, “there are far better ways of handling your money.”
Musson went on to explain how to protect yourself after a major inheritance: “You may need to shield the inheritance from your assets. This is especially important if you have a college student depending on financial aid, are on Medicaid or are receiving other asset-based government benefits. There are things you can do that may allow you to remain Medicaid eligible, but you need to do those things quickly. Working with an advisor can help you figure out how to maximize the inheritance and keep your benefits.”
Ultimately, though, Musson cautioned that doing nothing for too long can also be harmful. “Even if you don’t have to worry about having too many assets, you shouldn’t just let an inheritance sit. If you do that, you’ll lose money every day thanks to inflation. Instead, you should build an investment portfolio or pay off debt with your inheritance. You can maximize the inheritance if you put it in the right places. Once you know you have an inheritance, reach out to a fiduciary professional right away.”
George Dimov, founder and CEO of Dimov Partners, agreed. “The advice to do nothing is really good until it starts to cost you money without you even realizing it,” he added. “If you just sit on the money and do nothing, you could end up having to take all of the money out at once in the year and that could put you in a higher tax bracket … The advice to “do nothing” is great for your emotions, [but] you have to be careful with your money. Do nothing with your emotions. Be smart about the money especially when it comes to accounts, like a brokerage account or a traditional IRA.”
The Bottom Line
A sudden windfall can feel like winning and losing at the same time, especially when it involves the death of a loved one. The Reddit thread serves as a reminder that your first move doesn’t have to be investing, spending or splitting, but simply making the smart decision to wait. However, as the experts have cautioned, just be sure you don’t want too long.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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