You barely knew your uncle. When he dies, you learn that he named you his sole beneficiary in his Will and your children as his contingent beneficiaries. Sounds like good news, right?
Yes and no. Some of the things you stand to inherit you’d rather not have.
For example, Uncle George was a gun fancier. He had a large and valuable collection of hunting rifles that he used to hunt deer on his 200-acre farm in the Litchfield Hills. Hunting was never your thing.
Could you keep the farm and the rest of the estate and say “no thanks” to the guns? Or could you say no to everything?
The answer to both is yes.
In Connecticut, you can disclaim all or part of an inheritance.
Some reasons to disclaim
In this scenario, here are just some reasons why you may wish to turn down the inheritance:
– You have no interest in owning the hunting rifles.
– You already have a lot of assets and if you accept this inheritance, your own estate will have to pay inheritance taxes.
– Your health is not good. You may need long-term care in a nursing home down the road and you’d like to protect your assets as much as possible.
When you disclaim all or part of an inheritance the Will treats you as if you died before your uncle, and therefore, the estate (or the portion you disclaim) passes to the contingent beneficiaries, your children in this case. They could probably use it to put a down payment on a new house, or fund their children’s education.
Avoid being taxed
To avoid adverse gift, inheritance or income tax on transfer, your disclaimer has to be a qualified disclaimer, which means that it must be:
– In writing
– Signed and delivered within nine months of the death of the decedent
And the disclaimant (you) must not have accepted any benefits from the property. After all, you’re dead from the point of view of the Will.
The possibilities for disclaiming an estate or part of it are endless. You could keep the real estate and disclaim the cash and stock; you could keep some of the cash, or some of the stock; a contingent beneficiary could disclaim his or her inheritance. Each situation is unique.
So if you don’t want what is given to you – you don’t have to take it! The decision to disclaim all or part of an estate is up to you. Call us if you’re wondering how an inheritance would affect your objectives, we can guide and advise you on the most beneficial path for you.