What Is a Waiver of Inheritance?

By Tom Streissguth

In estate law, heirs named in a will have the right to waive or disclaim an inheritance. This is a refusal to accept the bequest, and is usually done to either avoid taxes or the inconvenience of looking after property. You carry out a waiver of inheritance by drawing up and signing a document that ends your legal right to claim the assets left to you in the will.

In estate law, heirs named in a will have the right to waive or disclaim an inheritance. This is a refusal to accept the bequest, and is usually done to either avoid taxes or the inconvenience of looking after property. You carry out a waiver of inheritance by drawing up and signing a document that ends your legal right to claim the assets left to you in the will.

Legal Requirements

The laws of the individual states govern the matter of wills and estates, and lay down the rules for any waiver of inheritance. The disclaimer must be in writing and the person disclaiming the bequest must file the document in the court having jurisdiction over the estate. The disclaimer must also be sent to the executor of the will, who has responsibility for distributing assets according to the will's instructions. In most cases, anyone disclaiming property left in a will may not earn money or other consideration for doing so, unless the court authorizes the transaction.

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Reasons

Heirs may waive property left to them in a will for any reason. The most common is avoidance of property taxes and other costs associated with inherited real estate. The bequest, if it generates income, may also affect their income tax bracket and raise the percentage of income they would have to pay the IRS. In some cases, heirs wish to pass along a bequest to another family member who may be in dire financial need. If they are in bankruptcy or a lawsuit, they also may want to protect the property from seizure by creditors.

Deadlines

State laws set a deadline with respect to any waiver of inheritance. In New York, for example, anyone wishing to waive an inheritance must file the disclaimer within nine months of the death of the person making the bequest. State laws may also prohibit an individual from disclaiming any inheritance that is to be jointly owned. If the deadline for filing the disclaimer passes, then the heir must take possession or title to the property.

Return of Inheritance

After an heir files a disclaimer, the law returns the inheritance to the estate of the deceased. You may not file a waiver in favor of any other heir, or request that the property pass to someone not mentioned in the will. Instead, the executor has responsibility for disposing of the property according to instructions in the will, if there are any instructions with respect to disclaimed property. If there are not, the executor has discretion in the matter and may transfer the property to another heir, to a person or organization not mentioned in the will, to a charitable cause or to the state treasury. The probate court has authority in the matter and must approve any such transfer of property.

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How to Refuse to Inherit a House

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Not everyone is happy to receive an inheritance. Depending on your personal situation, you might elect to refuse or disclaim a bequest made to you by a loved one for any number of reasons. If you’re younger, the windfall might affect your eligibility for student aid, even if it's not payable to you immediately. If you’re older, it might prevent you from qualifying for Medicaid. Further, if you're already wealthy, an inheritance will increase your estate's value, which could mean your own estate will end up paying additional federal estate taxes when you die. The law recognizes these issues sometimes occur and you usually do not have to accept an inheritance if you don’t want to do so.

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