Most people in Florida would love to be the recipient of a surprise inheritance, but what if you don’t want it? It makes sense to refuse an inheritance for some situations. However, doing so takes a specific legal process.
Reasons for refusing an inheritance
Sometimes, an individual receiving an inheritance would rather the assets go to someone else. In other circumstances, the assets received would put them into another tax bracket, or the money spent to maintain gifted real estate would cost more than the property is worth. The term for refusing is called disclaiming an inheritance and is part of an estate litigation process.
The disclaimer process
If the person leaving the inheritance has not set up an exemption trust, the process for refusing the inheritance is called a qualified disclaimer. When you go through this legal procedure, you essentially agree that you have never owned the assets. The assets then pass to the contingent beneficiary. If a person leaves some of their estate to you without a legal will and you don’t want the assets, the state of Florida will determine who gets the assets. As part of the disclaimer process, the IRS requires you to do several things, including:
- Make the request in writing
- Disclaim the assets within nine months of the original owner’s death
- Avoid any influence over the intended beneficiary
Avoiding the disclaimer process
If you are in the process of setting up your estate, you can avoid estate litigation after your passing by creating a disclaimer trust or naming contingent beneficiaries on IRAs and other assets. If you have received an unwanted inheritance, working with an attorney experienced in the disclaimer process may help you pass on an inheritance that you don’t need or set up a contingent process.