What is A Renunciation of Inheritance?
This form allows a beneficiary to renounce their legal right to benefit from an inheritance (either under a will, trust or through intestacy. There are a number of reasons why a person might wish to avoid an inheritance, particularly if the proceeds would only go to their creditors, or if it would drastically affect their income tax liabilities. This was a sensible option if the disclaiming party was a beneficiary by descent, whose own children would then take in his place and without the imposition of a gift tax.
Once done, you cannot recover from this renunciation. It may be wise to consult counsel before taking this step. At a later time in your life, you may indeed regret this action. So think carefully before giving your inheritance rights up. Laws vary from state to state and change over time, especially on the subject of partnerships. Before using this document, have a lawyer review it.
How Do You Relinquish An Inheritance?
As unfortunate as it is, not everyone is ready to handle the circumstances which surround an untimely death and an unexpected inheritance that may come with it. Maybe you can’t afford to pay the property taxes if you end up inheriting property from your loved one. Maybe another relative needs the inheritance money more than you do, there are a myriad of reasons in which a beneficiary would give up their rights to an inheritance.
Thoroughly Look Over The Will
Make sure you look over the will in its entirety to determine what you have inherited and the associated value of the inheritance, know who inherits the property if you decide to disclaim the property in question. For instance, if you decide to give up the property there is no way to get it back once it’s gone it would be like you never owned it in the first place, however, if you inherit the property and then give it away to someone else you may have to pay a gift tax. If the deceased didn’t name a backup heir to the property in the will once you have denounced it is left up to the state courts as to who will receive the property, it could be sold off and the proceeds used to serve any debt, back taxes, etc.
Get in Touch With The Estate
Reach out to the trustee, administrator, or executor of the estate in a formal letter. You want this letter to state who left you the inheritance as well as clearly state that you would like to disclaim the inheritance, or if it’s a partial bequest state which parts of the inheritance you are giving up and be sure to sign the letter before sending off. Most states give you nine months before the renunciation is no longer valid, but check your local state laws to figure out how long you have before you have to file the proper documentation after the person has died.
Tie Up Any Loose Ends
Follow any instructions that were provided by the administrator, executor, or trustee to complete any tasks that are asked of you. You can bequest part of your inheritance but only if it’s possible, so you couldn’t give up part of a rare painting as you would effectively destroy it if you ripped it in half. You also can’t give up half of your inheritance after you have received any financial benefit from it beforehand. One widower was turned down by the IRS because she used half of the inheritance to pay her monthly bills even though she paid the estate back later on.
How To Use This Document
This review list is provided to inform you about this document in question and assist you in its preparation. This is not a form we recommend sending. You may well act in haste and repent with leisure. You should at least let some time pass after the individual’s death to see how you feel. Once done, you cannot recover from this renunciation. At a later time in your life, you may indeed regret this action. So think carefully before giving your inheritance rights up.
- Make multiple copies. Keep one in a transaction file you should set up on the subject if you do this.
- You can also modify this form for other forms of renunciation.