Can you disclaim an inheritance? – Part II

In our last post, we began a discussion about the possibility of disclaiming an inheritance. Popular culture generally treats the concept of inheritance as a welcome one. When loved ones pass away and leave their friends and family gifts of money, property or other assets, popular culture tends to portray these gifts as meaningful and inviting. In reality, familial relationships are complex. And regardless of whether or not the loved one who has died was beloved and will be missed, a host of reasons may inspire an individual to attempt to disclaim any given inheritance.

One of the more common reasons why individuals attempt to disclaim such gifts is that they may present a significant tax burden. Another common reason is that certain disclaiming processes will allow a beneficiary to guard money, property or other assets from his or her creditors.

In general, the Internal Revenue Service requires that anyone attempting to disclaim an inheritance must satisfy five specific requirements. Disclaiming an inheritance involves making a qualified disclaimer in writing. This disclaimer cannot be qualified and must be irrevocable. In addition, this disclaimer must be executed within nine months of the death of the individual who has gifted the inheritance. Finally, the individual making the disclaimer must pass the inheritance to someone else without directing how they may use the inheritance and without receiving benefit from it.

This process can be complex, but an attorney experienced in matters related to estate planning, probate and estate administration should be able to guide you through it.

Source: Findlaw Law & Daily Life, “Legal How-To: Disclaiming an Inheritance,” Daniel Taylor, Jan. 30, 2015

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