Accepting Inheritances: Do I Have To Take It?

Accepting inheritances can be a very personal thing, but most of the time, learning that you are the beneficiary of an inheritance is welcome news. Occasionally, however, a beneficiary does not want an inheritance. If you find yourself in that position, you may be wondering if you are required to accept the inheritance. The Tucson probate lawyers at Morris Hall, PLLC discuss why you might want to reject an inheritance and how to do so if you decide you do not want the inheritance.

Accepting Inheritances: Why Would I Reject One?

The idea of rejecting an inheritance may sound ridiculous to you at first; however, there are actually several good reasons why people choose to do just that, such as:

• Someone else should inherit the money or assets. This happens fairly often. If you believe that someone else should receive some – or even all – of an inheritance you may decide to reject it. The decedent may not have made changes to their estate plan that you know they meant to make, resulting in a new wife or child being left out unintentionally. Or maybe a parent intentionally disinherited a sibling of yours and you don’t agree with that decision. Whatever the circumstances that cause you to feel as though you are not entitled to the inheritance, rejecting it is your right.
• There are negative tax consequences associated with the inheritance. A handful of states directly impose an inheritance tax. There may also be other indirect taxes associated with accepting the inheritance; however, if the next person in line to receive the inheritance is your child who is in a much lower tax bracket, and you plan to spend the money on him/her or leave it to him/her anyway, it can make more sense to disclaim and allow it to pass immediately.
• There are strings attached. Sometimes a decedent leaves a beneficiary an inheritance, but the money can only be spent on specific things or the beneficiary must fulfill certain conditions in order to receive the inheritance. If you decide the strings aren’t worth it, you can reject the inheritance.
• You are in serious debt or in bankruptcy. If you are already in serious financial trouble, and the inheritance would simply be lost to creditors without paying off all your debt, disclaiming can make sense. Be careful, however, if you are in the middle of a bankruptcy at the time because disclaiming an inheritance while in the process of seeking bankruptcy protection can be problematic. If the Trustee finds out, he/she could go after the assets anyway and you could be in trouble for not divulging the inheritance.
• You could lose much-needed assistance. If you are dependent on assistance programs such as Medicaid, Food Stamps, Veterans Aid and Attendance, or Supplemental Security Income (SSI) an inheritance could disqualify you for those benefits until such time as your assets fall below the program limits once again. By accepting the inheritance, you will have to go through the application and approval process all over again.

What Do I Do If I Want to Disclaim an Inheritance?

Regardless of the reason, if you don’t want an inheritance you cannot simply tell the Executor that you don’t want it. Rejecting, also referred to as “disclaiming,” an inheritance requires a written disclaimer. There are several important reasons why you should always consult with an experienced estate planning attorney if you are considering rejecting an inheritance.

• For a disclaimer to be valid, it must be in writing, contain the correct language, and be delivered to the right person within a specific amount of time.
• It is crucial that you know with certainty who will inherit if you disclaim your inheritance.
• Certain actions you take could prevent you from being able to disclaim your inheritance.
• You must disclaim your entire inheritance.
• A disclaimer is irrevocable. Once you have disclaimed your inheritance you cannot interfere with what happens next.

Contact a Tucson Probate Lawyer

For more information on accepting inheritances, please join us for an upcoming FREE seminar. If you have additional questions or concerns about rejecting an inheritance, contact an experienced Tucson probate lawyer at Morris Hall, PLLC by calling 888-222-1328 to schedule your free consultation today.