Legal Wording for When an Heir Wants to Relinquish Interests in a Property

By Michael Butler

Normally, you do not have to take possession of property given to you by someone else, including inherited property. When you relinquish your interests in an inherited property, the law calls it a "disclaimer." To be effective, a disclaimer must include specific information and you must deliver it within a set period of time.

Normally, you do not have to take possession of property given to you by someone else, including inherited property. When you relinquish your interests in an inherited property, the law calls it a "disclaimer." To be effective, a disclaimer must include specific information and you must deliver it within a set period of time.

Reasons to Disclaim

One of the primary uses of disclaimers is to avoid federal estate tax issues. Parents who leave property to their already well-off children with good intentions sometimes create future estate tax problems for their grandchildren. If the children disclaim the property, it can often pass directly to the grandchildren without as many tax issues. Because the estate tax law changes frequently, you should speak with an estate-planning attorney to determine if a disclaimer is appropriate in your situation. Another reason to disclaim an inherited property is when keeping the property might cost more than its worth. For example, you might want to disclaim real estate with more debt attached to it than equity.

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Timing and Qualifications

If you are disclaiming property because of federal estate tax issues, you must usually do so within nine months of the grantor's death. States have different laws concerning how long you have to disclaim property. If you want to disclaim property, you cannot accept the property and later disclaim it. You also cannot receive any benefit from the property before disclaiming it. For example, if the property is a stock portfolio, you cannot cash a dividend check; if it's real estate, you can't accept any rent if you intend to disclaim it.

Legal Wording

The exact language you need to use depends on the laws of the state with jurisdiction over the estate and the type of property you want to disclaim. You should check with an attorney for the specifics language you need to use. Generally, however, you need to state your name, the property to disclaim and the extent of the disclaimer. For example, if you want to fully disclaim real estate, your disclaimer might state, "I, John Doe, fully disclaim all rights, titles, benefits and other interests in the real property located at 4567 Homestead Drive, Anywhere, Texas 00000-0000."

Delivering the Disclaimer

To make the disclaimer effective and final, you must deliver it to the proper person. This is also a matter of state law. In most cases, the disclaimer must be signed and delivered to the estate executor or personal representative. Some states require filing the disclaimer with the court having jurisdiction over the estate. If you are disclaiming real estate, you will also need to file the disclaimer with the register of deeds in the county where the property is located.

What Happens to the Property

After you disclaim a piece of property, it will go to the next in line to inherit under the terms of the will or in accordance with the laws of intestate succession in your state. A well-drafted will has a remainder clause that sets out who gets property in case of disclaimer or when the property is not mentioned in the will. This is the person who will inherit the property. In cases where such a clause does not exist, or everyone mentioned in the clause disclaims the property, the law of intestate succession determines who inherits the property, which is usually based on how close relatives are to the deceased.

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How to Refuse to Inherit a House

References

Related articles

How to Disclaim All or Part of Your Inherited Assets

Heirs and beneficiaries may disclaim all or part of an inheritance should they decide that the inheritance is more trouble than it's worth. It is possible, for example, to inherit real property that is located too far away to be of benefit, or personal property that simply isn't wanted. Additionally, tax consequences may render an inheritance a liability. When property is inherited jointly -- by two heirs or benefices together -- if the heirs can't decide how to share the property, or if refinancing is required and one heir can't qualify, it may be easier for one party to bow out by disclaiming the inheritance.

Declination of Interest in Wills

Wills generally describe how you want your assets to be distributed after your death by designating specific beneficiaries. But no matter what assets you try to give or whom you want to give them to, the beneficiary you name in your will always has the option to decline the inheritance. State laws vary, but a declination typically requires the beneficiary to take formal steps to renounce the inheritance received.

Procedures for Disclaiming an IRA Inheritance

A beneficiary can disclaim an IRA inheritance if he does not want all or part of the IRA. A beneficiary may want to disclaim if he is already wealthy and the next eligible beneficiary could benefit more from the inheritance, or if he is facing personal bankruptcy and would likely lose the inheritance in any case. After a beneficiary disclaims his inheritance, he will be treated as never owning any of the inheritance, and the IRA will not be included in his estate. The proper procedure must be followed to ensure a disclaimer is valid.

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