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.

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.

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.

Protect your loved ones. Start My Estate Plan

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.

Protect your loved ones. Start My Estate Plan
Texas Estate Laws on Disclaiming an Inheritance


Related articles

Can You Change a Deed Anytime You Want to if You Have Power of Attorney?

When you sell real property, the sale is recorded by changing the deed to the property. For various reasons, a person may want to grant the power to sell the property to an agent under a power of attorney. State laws vary about the requirements for changing a deed and creating a valid power of attorney, but all states allow a power of attorney to be used to transfer real estate.

How Does a Person With a Life Estate Get Title to Property?

Life estates are a unique type of property ownership that allows different people to own land at different times. A life tenant owns and controls the property that is subject to a life estate for the rest of her life. Once the life tenant dies, another party, known as the remainderman, automatically receives the property and owns it outright. While the principle of life estates is straight forward, the administrative process of getting the property’s title in the name of the correct owner can be difficult. Property is subject to state law, so the process for transferring the title to life estate property will vary based on where it is located.

What Happens When Someone Refuses to Accept Their Inheritance?

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.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help.

Related articles

How to Disclaim a Beneficiary Deed in Arizona

Since 2001, the state of Arizona has allowed property owners to sign and record a beneficiary deed conveying property ...

Life Estate Laws

When planning your estate, you need to consider who gets your property as well as when you want them to receive it. You ...

Can I Refuse to Accept an IRA if I Am Designated as the Beneficiary?

Under normal circumstances, beneficiaries are more than eager to collect their inheritance. In some circumstances, ...

How to Refuse to Inherit a House

For various reasons, you may wish to disclaim property that was willed to you by a relative. Beneficiaries may file ...

Browse by category
Ready to Begin? GET STARTED