Assigning or Disclaiming an Inheritance

Jun 7, 2013

The idea that someone may not want an inheritance may sound strange at first; however, there are situations where a beneficiary or heir wishes to disclaim an inheritance or assign it to someone else. If you ever find yourself in that position, be sure that you follow the proper legal procedure to effectuate the assignment or to disclaim the inheritance.

Why would someone want to turn down an inheritance? One reason is to do the right thing. All too often a person dies without leaving behind a Last Will and Testament. When that happens, state intestacy laws determine who will receive the decedent’s estate assets. If an heir receives assets through an intestate estate administration, he or she may know that they were intended for someone else and want to do the right thing by assigning them to the intended beneficiary. This often happens as well when someone fails to update an existing Will after a new marriage or birth.

Another reason someone may wish to disclaim an inheritance is to ensure that they are not disqualified from vital state or federal assistance programs such as SSI or Medicaid. Sometimes, even a small inheritance can put a recipient over the resources threshold, threatening to cut the recipient off from long-term, and much needed, assistance.

Assigning or disclaiming an inheritance is sometimes the best decision; however, it must be done properly to ensure that there are no negative consequences. Regardless of the reason, it is important to consult with an estate planning attorney to ensure that the disclaimer or assignment is executed legally to make sure that you don’t suffer any unintended tax consequences.

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