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Disclaim Inheritance

On Behalf of | Oct 9, 2023 | Firm News

George felt sadness at the passing of his favorite uncle Barney, and he was utterly shocked to learn that Barney had named him in the will to receive a slice of hunting property and a shotgun.

While he appreciated the gesture greatly, George wasn’t a hunter like others named in the will and he thought it would be disrespectful to convert the land and firearm into cash. The 10-acre parcel was adjacent to property left to other relatives, so it would be downright treason to sell such a sliver to an outsider. And George was better off financially than some of the relatives that loved to hunt and would appreciate both the land and gun.

To complicate matters, George learned there may be gift tax consequences for a person to accept an asset such as property as an inheritance, then give the property to someone else as a gift.

After consulting with his attorney, George found just the right solution: he could “disclaim” the inheritance — essentially stating that others named in the will could have his share.

He was surprised to learn that disclaiming an inheritance was more common than one would expect. Real estate is the most common asset to be disclaimed, often because properties were located at considerable distances, were expensive to maintain or needed a significant investment to be made ready for sale. Guns are another regularly disclaimed asset, often because the beneficiary can’t legally own a gun or is uncomfortable owning firearms. Sometimes a beneficiary disclaims a small amount of cash, so other family members can receive modestly larger shares.

George learned that the process of disclaiming an inheritance was relatively simple, primarily writing a letter to the Personal Representative (for a will) or a Trustee (for a trust) of his desire to disclaim the inheritance, or asking the PR or Trustee to prepare a disclaimer that he could sign. With some advice from his lawyer, George disclaimed his inheritance and felt good about honoring the wishes of his favorite uncle.