My grandma thinks inheriting my childhood home is a blessing. I’m worried it will become a financial burden. Should I say something now?

The only problem is, the home is old, needs a ton of work, isn’t in a desirable location and Mika doesn’t want it. And Mika isn’t necessarily wrong in her concern about inheriting.

“In theory, inheriting a home sounds like getting a free asset but, in practice, we often see it become one of the most expensive and contested assets a family deals with,” Scott Rahn a probate, estate, and trust litigation attorney and founding partner of RMO LLP, told Moneywise.

Here’s why inheriting a home may actually be a problem, and what you should do if you’re on track to get a house that could end up being a curse instead of a blessing.

Inheriting a home can come with significant downsides

Unfortunately, an inherited home can sometimes come with big issues that heirs like Mika just don’t want to deal with.

“Even when a home is paid off, you’re stepping into ongoing obligations, property taxes, insurance, upkeep, and if multiple heirs are involved, those costs, and their desire and ability to pay those costs, can quickly become a source of disagreement,” Rahn said. “We routinely see families spend significant money and time fighting over what to do with a single property.”

It’s not a surprise that families would fight over the finances of an inherited home, as a lot of money is at stake. “A paid-off inherited home can still cost thousands per month to maintain before improving one dollar,” Evan H Farr, a certified elder law attorney and principal attorney at Farr Law Firm told Moneywise.

Farr explained that inherited homes often require immediate cash outlays to address structural issues like roofs and HVAC systems. He also warned that environmental problems like mold or asbestos or underground tanks could lead to unexpected costs and that, “if the home hasn’t been modernized, sale and rental values may be limited unless renovated.”

Unfortunately, this could leave Mika in a tough spot.

“A beneficiary without sufficient cash may be forced to sell quickly or borrow on poor terms,” T.L. Turnipseed, head of personal trusts at Alta Trust Company, told Moneywise.

How can an inheritance be structured to minimize the risk

So, what should Mika do?

Obviously, she could just decline the house, but that creates problems of its own. Enid is likely to get upset that Mika doesn’t want what she sees as a generous gift. Enid may also not have anyone else to whom to leave the house, and she may not want to sell it during her lifetime, especially as that could lead to the loss of a powerful tax break.

“At the time of death, most inherited homes receive a step-up in basis to fair market value,” Farr explained. “Prior capital gains tax liability are eliminated. If sold shortly after inheritance, capital gains taxes may not apply.”

Mika could also lose the value of the inheritance if she turns it down. After all, even if she doesn’t want the home, she could sell it as-is and walk away with whatever proceeds she gets. However, the key is that she’ll need to be able to act quickly. So the inheritance must be structured the right way.