You can choose to refuse an inheritance.
A loved ones has died.
You have been designated as an heir.
Perhaps congratulations are in order.
Perhaps they are not.
According to a recent Investopedia article titled “How Inheritance and Estate Tax Waivers Work,” there may be times when it is wise to not accept an inheritance.
For example, there may be adverse estate tax consequences to you or the estate of the decedent.
Disclaimer Form Language
Language must be specific and binding.
What should it include?
The decedent and the heir must be named.
In addition to a general disclaimer, you should list any assets specifically left.
You will also need it to indicate that your disclaimer is made voluntarily.
The Legal Process
States have their own laws regarding estates.
The disclaimer needs to be specific to the laws of the state where you live and filed with the appropriate jurisdiction.
You will also need to provide the estate executor with a copy of the disclaimer.
Remember, you cannot receive compensation for signing away your rights to your inheritance.
Timing and Taxes
Once the decedent passes, you have a limited amount of time to submit a waiver.
Typically, the time frame is nine months.
What if you miss the deadline?
You must accept the inheritance.
This means you will also need to pay any taxes by nine months after the date the decedent passed.
Do not waste time.
This could be a costly mistake.
Legal Consequences of Disclaiming Rights
As an heir can you redirect your disclaimed inheritance?
Asset distribution will occur as if you predeceased.
These could be governed by the terms of the will, or the trust, or intestate estate of the decedent.
By all means, do not attempt these actions alone.
Work with an experienced estate planning attorney to ensure any disclaimer you may consider will meet the requirements of your state.
Reference: Investopedia (October 1, 2018) “How Inheritance and Estate Tax Waivers Work”