When an individual dies and he/she has now created a will prior to death, his/her estate will be divided following the laws of intestacy. Therefore, certain people will be entitled to a portion of the deceased’s estate. For example, if the deceased has both a living spouse and living children, the estate will be divided amongst these individuals. This often happens without the consent of the individuals who are inheriting the estate.
Some relatives may not want to inherit the deceased individual’s assets. For example, if the inheritance would adversely affect an individual’s income tax liabilities, or if the assets would by provided to creditors, an individual may not want to acquire the inheritance. Another reason that a direct descendant may wish to refuse an inheritance, is because the assets will then likely be passed to his/her children, without gift tax.
In order for an individual to refuse an inheritance, he/she must file a disclaimer of interest. He/she must create a written disclaimer and submit the document to the court that is responsible for the distribution of the estate. The disclaimer must be submitted within a specified time period. In most cases, this period is nine months following the death of the deceased.
In some states, regulations have been created regarding these disclaimers. For instance, in some locations, an individual who is reliant on welfare or public benefits will not be eligible to file a disclaimer of interest. It is important for an individual to review the laws and regulations regarding this process in his/her state, as it varies from one state to another.