Can I Refuse An Inheritance? How To Do It

The simple answer is yes, and it’s referred to as “disclaiming” in legal terms. If you’re thinking about disclaiming an inheritance, you should grasp the consequences of your decision and the steps you need to ensure it’s considered qualified under federal and state law.

Not wanting to pay taxes on the assets or ensuring that the inheritance goes to another beneficiary—for example, a grandchild—are common grounds for disclaiming an inheritance. To be qualified under federal law, a disclaimer must adhere to specific IRS rules. It’s also critical to learn about your state’s regulations.

Basic Requirements For Inheritance Refusal

The IRS Requires The Person Disclaiming The Asset To:

  • Provide an irrevocable and irreversible refusal to accept the assets.
  • Present a written disclaimer.
  • Present the disclaimer within 9 months of the asset’s owner’s death (if a minor beneficiary wishes to disclaim, the disclaimer takes place after the minor reaches the age of majority, and after that, they’ll have 9 months to disclaim the assets).
  • The proceeds of the disclaimed property could not have benefited the person who disclaimed it.
  • The assets cannot be handed indirectly to the person claiming them.
  • The individual making the claim must not influence the contingent beneficiary.

The assets will pass to the contingent beneficiary selected by the original owner as if the first beneficiary had died before inheriting the assets.

Why Would Someone Negate An Inheritance?

  • A beneficiary may desire to disclaim inherited assets for various reasons, including lowering federal estate and income taxes. Sometimes, the costs of receiving an inheritance may be greater than the benefits of it as a result of tax implications. In these cases, refusing the gift may be the tax-efficient thing to do. 
  • To prevent receiving undesirable real estate with high real estate taxes that will take a long time to sell.
  • To keep the assets out of the hands of creditors if the principal beneficiary is involved in litigation or bankruptcy.
  • To help another family member, such as a son who could profit from the inheritance.
  • To take advantage of a lower tax bracket for another beneficiary.

Get Professional Help From A Top Probate Lawyer In Texas

If you find yourself in a situation where you want to refuse an inheritance, this must be done correctly and carefully. It can be tough to navigate the legal processes of refusal on your own, and it’s best to hire a probate lawyer who has experience with these matters.

At Elissa Henry Law Firm, we will be able to help you handle every step of refusing an inheritance so that your rights are fully protected at all times during this process. Knowing your rights and being prepared to move forward with whatever legal course can be a difficult process, but knowing that a professional is behind you can make all the difference.