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

References

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Texas Estate Laws on Disclaiming an Inheritance

Some things in life – such as paying taxes – are unavoidable. Accepting an inheritance isn't one of these things. Under a Texas law known as the "relation-back doctrine," when someone names you as beneficiary in his will or trust, he's offering you property, nothing more. You don't have to accept it, but Texas has rules you must abide by if you want to refuse or disclaim it. After you do so, you can't change your mind.

New York Estate Law When the Executor Dies

New York, like all other states, recognizes a written will as the proper method for making your wishes known as to the distribution of your assets when you die. The executor is the person named in the will to see that the terms of the will are carried out. If an executor dies before she has completed her duties, the court must appoint a new executor.

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.

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