What options do you have if you are listed as a beneficiary to a will or trust and you do not want the property offered? You have the right to refuse acceptance for any reason. This is called disclaiming or renouncing the gift.
Why would you want to disclaim a gift?
One reason may be that you simply have enough and want the next heir in line to benefit from the gift. This often happens with aging parents who feel their adult children could benefit more than themselves. By disclaiming the gift or inheritance from the onset, it can eliminate a lot of hassle, paperwork and even legal fees or estate/gift taxes later.
With a disclaimer, you are not assessed a gift tax because you never owned the property that would be the subject of the gift. Disclaiming it allows it to bypass your estate altogether. For wealthy individuals, this may even make sense simply to minimize later estate taxes.
Sometimes mistakes are made in drafting a will or trust and you realize the grantor’s wishes will not be carried out by accepting the inheritance. You may be able to disclaim the gift so that it goes to a more appropriate beneficiary. Keep in mind though that by renouncing, you cannot determine who gets the asset. That will be determined through the language of the will and/or trust. The next designated beneficiary based on the terms of the will/trust will dictate who gets the inheritance after your disclaimer.
To make a disclaimer – put it in writing and deliver it to the executor of the estate. Do not accept any benefit from the property you are disclaiming (such as a rent payment or a portion of the gift).
If you find yourself in the situation of trying to determine whether to accept or disclaim an inheritance, contact the knowledgeable attorneys at Stouffer Legal in the Greater Baltimore area to discuss your options and their consequences. You can schedule an appointment with Stouffer Legal in the Greater Baltimore area by calling us at (443) 470-3599 or emailing us at office@stoufflerlegal.com.
