The choice of whether to inherit property is not always as clear as it may seem. In some circumstances, it may be preferable to “disclaim” an inheritance, or in other words, to decline the rights to the assets you were supposed to inherit. The process to disclaim an inheritance requires an understanding of the rules involved and speaking with an attorney or financial advisor is recommended.
Generally, disclaiming an inheritance means you’re rejecting any rights to property that you would have otherwise inherited under the provisions of a will, through a trust, according to state probate laws, or as a named beneficiary to the financial instrument (like a life insurance policy or IRA). Rather than receiving these assets, the disclaimed property would pass to the next person entitled to receive it.
This may seem unusual and disclaiming an inheritance is not particularly common. However, heirs may choose to disclaim an inheritance for a variety of reasons.
For whatever reason disclaiming might be important to you, there are several requirements to properly comply with inheritance law. First, the IRS requires that a disclaimer (1) be in writing, (2) state specifically that you refuse the property and that the refusal is irrevocable, (3) disclaim the assets within nine months of the death of the deceased person (minors have nine months after they reach the age of majority), and (4) the disclaimed property cannot pass to you in any other way, including indirectly. Each state also has laws relating to disclaiming an inheritance that may require additional documents to be filed with the probate court, or other procedures to be followed.
One of the most important parts of disclaiming an inheritance is understanding that you will have no say in what happens to the property after disclaiming. The property will simply go to the next legal person in line. Disclaiming is also permanent, and therefore you cannot change your mind if you wish to receive the property later. Finally, as mentioned above, you only have nine months after the death of the person you are inheriting from to decide whether to disclaim.
If you would like more information or have questions about disclaiming an Inheritance contact WM Law for a free of charge initial consultation with one of our attorneys or visit our Website at: www.kansascityestateplanner.com
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