Can I deny an inheritance?

COH & ACOA Joined: Jul 22, 2006 Posts: 1984 Location: Cabo

Does anyone have any information or advice on this topic that will be helpful to others?

COH & ACOA Joined: Jul 22, 2006 Posts: 1984 Location: Cabo

This info. might be helpful, found at:
http://www.360financialliteracy.org/Life+Stages/Retirement/FAQs/Wills/Do+I+have+to+accept+a+bequest+I+dont+want.htm

Do I have to accept a bequest I don't want?

Answer:

No, you don't. A bequest is a gift left to you in a decedent's will. You may not want the gift for a variety of reasons. For example, it may be a burden on you, or it may result in adverse tax consequences for you. Whatever your reason for not wanting the bequest, you can refuse it by disclaiming it. The bequest then goes to the recipient who is next in line under the will. But if you just say "No, thanks" to the bequest, you may be seen by the IRS as making a gift to the next recipient! This could cause federal and state gift tax consequences to you. To avoid these consequences, you must refuse the bequest by making a valid disclaimer.

You must satisfy the following requirements for a disclaimer to be valid for federal gift tax purposes:

Your refusal must be

COH & ACOA Joined: Jul 22, 2006 Posts: 1984 Location: Cabo

From University of Mary Washington:
http://umw.giftlegacy.com/finances.jsp?WebID=GL2006-0609&D=200146

The process of refusing a bequest is called a "Disclaimer."

A will, a trust or a beneficiary designation on an IRA will indicate that a person has the right to receive property. Yet it is not mandatory to accept property. There are a number of reasons why a person might choose not to receive that property. This refusal is called a "Disclaimer."

In order to disclaim, the person that has a right to receive the property must send in a written note to the executor within 9 months after the decedent passes away. With a disclaimer by anyone other than the surviving spouse, the property must then pass to another person.

When would a person disclaim? In some cases, parents have sufficient assets and decide to disclaim and allow the property to pass through to children. Particularly if the parents have a large enough estate that they may be required to pay estate tax, they may not want to acquire additional property that would make their estate tax problem worse. Thus, they could disclaim and allow property to move to their children.

Another tax-saving reason for a disclaimer is to obtain a charitable deduction. Some wills or trusts are drafted by attorneys who put in a provision that allows a disclaimer with remainder to charity. In effect, the individual has the choice to take the property and pay estate tax or to allow it to go to charity and save the estate tax. The reason it saves the estate tax is that the transfer to a charity qualifies for a charitable estate deduction. Quite a few children have decided it would be better to allow the property to go tax-free to charity, rather than requiring the estate to pay a large estate tax. Please note -- if a parent desires to give his or her children this option to save taxes with a charitable transfer, it is essential to ask the attorney to include the option in the will or trust.

COH & ACOA Joined: Jul 22, 2006 Posts: 1984 Location: Cabo

From the messages archives in the COH Yahoo Group:

Quote:

> hi,
>
> I had had a conversation with a friend a few months ago. All
> hypothetical, about if mom's situation where to get so bad, what
> would my options be. He was telling my that even if mom left all the
> property to me in her will, etc., that I could Refuse it and just
> walk away.

A member responded:

Quote:

I believe what you are talking about refers to disclaiming your
inheritance.

What I can ascertain from the little research I've done on the subject
is that, basically, you can disclaim anything your mother leave's you
in a will. There are stipulations to how/when you can do this, and
once you do, you can't go back later and decide that you want the
inheritance back.

Here are a few links that might help you out. If it sounds confusing,
my apologies - it's been a long day!

http://www.newyorkl ife.com/cda/ 0,3254,11816, 00.html
http://en.wikipedia .org/wiki/ Disclaimer_ of_interest

Hope those help at least a little bit.

Another member:

Quote:

Oh, and absolutely you can refuse an
inheritance http://www.investopedia.com/articles/06/RefuseInherit ance.asp