Although most of us probably cannot even imagine a scenario where we would refuse an inheritance, there are actually situations where it would make sense. Some of these situations include:
- The property left to you could require significant upkeep, therefore significant financial outlay. A property could have extremely high property taxes or insurance, or an older home could require so much upkeep that it is simply not financially feasible to accept the gift.
- Accepting the inheritance could potentially interfere with your eligibility for a necessary government assistance program.
- The inheritance may generate a level of tax obligation that you are simply not able to pay.
- You might want the property left for you to go to another person.
- You could be contemplating filing for bankruptcy and do not want the property to be sold to pay your creditors or have it otherwise interfere with your bankruptcy proceedings.
- You could be thinking about divorce and do not want to take the chance that the inheritance could be subject to the marital property division laws in your state.
- You simply may not like the item left to you or want the inheritance.
How You Refuse an Inheritance
The legal system provides those who want to refuse an inheritance the mechanism to do so. While the laws vary somewhat from state to state, it will be necessary to sign a waiver stating you do not want the property left to you. This is known as a disclaimer, and you may be under a certain time limit to disclaim the property, or it will be automatically transferred to you. You must also decline your inheritance before receiving any portion of it. The Internal Revenue Service lists the following requirements which must be met before your disclaimer will be considered legal and valid:
- Your disclaimer must be in writing—you cannot simply verbally state that you do not want the inheritance.
- Your disclaimer must be delivered to the executor or trustee of the estate within nine months of the time the person died.
- Once you file the disclaimer, you are not allowed to receive any benefit at all from the inheritance you are disclaiming.
Once you file a disclaimer notice, you are not allowed to have any say in what happens to the property you disclaimed. In other words, you cannot disclaim property with the instructions that it should go to your brother, son, daughter, etc. If you want to have a say in who receives the property, you will first have to accept the property, then pass it along to another person. The property you disclaim will be distributed either according to the terms of the deceased’s estate plan or, if there was no plan, the property would be distributed according to state law. If the estate plan named an alternative heir, then your disclaimed inheritance would go to that person.
How the Family Estate Planning Law Group Can Help
If you want to refuse an inheritance, you will want to ensure it is properly done, according to Massachusetts state law. The best way to do this is to speak with us here at Family Estate Planning Law Group. We can address the unique concerns of you and your family in all areas relating to estate planning and eldercare. We understand that life is full of changes—relationships change, children are born, family members die. This understanding is reflected in our tagline “Together, We Plan for Life®,” as well as in our ongoing client care program and our Family Care Meeting™. Explore our blog, and schedule your complimentary consultation today.