How to Refuse to Inherit a House

By Tom Streissguth

For various reasons, you may wish to disclaim property that was willed to you by a relative. Beneficiaries may file such a disclaimer to save income and property taxes, avoid the expenses of ownership, or to pass the property on to another heir. Although a disclaimer can be a brief and simple document, it's important to follow the relevant state laws, as well as IRS rules and guidelines, whenever taking this action.

For various reasons, you may wish to disclaim property that was willed to you by a relative. Beneficiaries may file such a disclaimer to save income and property taxes, avoid the expenses of ownership, or to pass the property on to another heir. Although a disclaimer can be a brief and simple document, it's important to follow the relevant state laws, as well as IRS rules and guidelines, whenever taking this action.

Step 1

Create a document, heading it "Disclaimer." IRS rules require that you prepare and execute this document within nine months of the death of the person who made the bequest. If you miss the deadline, the property automatically becomes a personal asset for income tax purposes.

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Step 2

Complete the disclaimer by using language to the effect that you are unconditionally disclaiming property bequeathed to you in a will. Identify the will by date and author; identify the property by address and/or legal property identification number. You may not direct ownership to another person; by law, the contingent beneficiary will gain ownership.

Step 3

Sign and date the disclaimer. You may not execute a disclaimer before the death of the testator -- the person who wrote the will. In addition, you may disclaim a portion, and not all, of an inheritance. Have the disclaimer witnessed and notarized by a notary public, who is authorized by law to witness your signature.

Step 4

File the disclaimer in the local court handling the probate case, if the estate is going through probate, and send it to the executor of the estate via certified mail. If the property was bequeathed to you in a trust, and the estate is avoiding probate, send the disclaimer to the trustee via certified mail. The trustee is the individual handling the estate and the bequests; he has the responsibility to oversee the transfer of assets to the beneficiaries.

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How to Disclaim a Beneficiary Deed in Arizona

References

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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.

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.

Does a Verbal Gift Supersede a Will?

A will is a legal document that dictates how the property of a deceased person is to be distributed amongst his friends and families. It is drafted by the deceased before his death, and it may identify that specific assets go to specific people. During the time between when a person drafts a will and when he dies, the will maker may make verbal gifts of property, which are referenced in the will, to other people. As a result, there may be some confusion regarding who receives the property -- the person named in the will -- or the person who received the verbal gift.

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