Did you know that just because you are awarded an inheritance, you don’t have to accept it?
When you receive a gift from someone’s estate, you can refuse to accept the gift for any reason. This is called “disclaiming” the gift. When you disclaim a gift, you have no right to decide who gets it. Instead, the inheritance will pass on to the next beneficiary listed. Once the decision is made and legally filed, it is not revocable.
Many can’t fathom why anyone would refuse an inheritance that a loved one had left them, but sometimes the decision makes sense for the beneficiary.
Two Common Reasons to Refuse an Inheritance
Concern About Eligibility for Government Aid
Some must carefully consider the possibility that accepting an inheritance could push their income or assets over the qualifying amounts for student loans or other government assistance programs. There are a few assistance programs that count the funds against you even if it was disclaimed, so caution should be used when refusing an inheritance for this reason.
Avoid the Hassle
If, for example, you inherit an asset like a run-down house, you may not want to contend with it. You may decide it’s best to refuse.
While these are only two of the most common reasons for disclaiming an inheritance, they are not the only ones. It’s a personal decision that has legal consequences. If you are considering forfeiting an inheritance, planning, and thought must go into your decision, along with an understanding of the ramifications for you and the next beneficiaries in line.
417 Business & Elder Law is here to help with your estate planning. We also encourage you to consult with your certified financial planner or certified public accountant before making this important decision.
This article was also published in the printed version of the Volume 6 Issue 3 Nov 2020 Newsletter (PDF).
Please call our office at (417) 887-4170 if you have any questions about this article or would like to receive our mailed newsletter.