In estate planning and probate law, it’s common to hear people ask questions like “How do I find out if I have an inheritance?” or “How can I find out if my father left me anything in his will?” Less common, I suspect, is “Do I have to accept an inheritance?” or “How can I make sure my mother doesn’t leave anything to me?”
Yet in some circumstances, those are perfectly valid questions to ask. While refusing a large sum of money might seem to go against our instincts, it could just be the best option, depending on your situation.
Am I legally obligated to accept an inheritance?
Contrary to what you might think, you are not legally required to accept an inheritance. In fact, there are a number of reasons why you may actually consider disclaiming property left to you from a loved one.
What are some of the reasons why I would want to disclaim something?
Suppose someone stands to inherit a dilapidated beach house that would cost an arm and a leg to fix up. Between the headaches and costs associated with making the house livable, not to mention the extended period of time it would take to sell it once it was finished, the intended beneficiary might decide it’s just not worth the effort.
Another common example is where the beneficiary already has a substantial estate subject to the estate tax. By refusing to inherit a property interest, the assets that would have been inherited could be protected from further taxation upon the beneficiary’s death.
Similarly, if no marital trust is in place, a surviving spouse might want to disclaim assets from their deceased husband or wife in order to avoid losing out on their estate tax exemption limit.
Or what about the person who’s been estranged from a loved one because of abuse, or knows that the property in question was obtained by illegal means? Receiving that property might be fraught with negative emotions and moral objections, so it might be preferable to disclaim those assets.
Do I have to follow certain rules if I don’t want to receive an inheritance?
In order to disclaim an inheritance, the disclaimer must comply with the laws of your state. For example, disclaimers should be in writing, and typically must be filed within nine months following the death of a decedent.
Are there any exceptions to the right to disclaim an interest in property?
As with many things in the law, there are always exceptions. Under the Massachusetts Uniform Probate Code, for example, a person’s right to disclaim is barred, among other things, by:
- certain judicial proceedings entered into before the disclaimer;
- the beneficiary’s insolvency at the time of a disclaimer;
- a beneficiary with knowledge of the interest and without objection taking possession of or receiving a benefit from the property in question;
- a written waiver of the right to disclaim signed by the beneficiary.
What is the effect of a disclaimer?
When someone disclaims an inheritance, the property passes as if the person predeceased the decedent.
You should consult with an attorney in your state to find out (1) whether disclaiming would be advisable in your situation, and (2), if so, what is the procedure for disclaiming an inheritance.