Fill and Sign the Disclaiming Form

© 2016 - U.S. Legal Forms, Inc USLegal Pamphlet on Disclaiming an Inheritance I NTRODUCTION In succession planning, a beneficiary may disclaim an inheritance, thus passing the inherited property to another beneficiary and avoiding inheritance/gift taxes, as well as any liabilities that may come with the property. By disclaiming inherited assets, one is essentially refusing to accept the inheritance. Such a disclaimer may be for various reasons, such as to lower tax liability, correct an improper estate plan, because the asset has attached debts that outweigh its total value, to keep it out of creditors’ hands, to avoid ineligibility for benefits, or other reasons. For tax purposes, disclaiming assets is the same as never having owned them. That's why it's important to follow the precise requirements of a qualified disclaimer. If the primary beneficiary does not follow these requirements, the property in question will be considered a personal asset that he or she has given as a taxable gift to the next beneficiary in line. H OW TO D ISCLAIM According to the IRS, the person disclaiming the asset must meet the following requirements to use a disclaimer: •Make the disclaimer in writing •Disclaim the asset within nine months of the death of the assets' original owner (in the case of a minor beneficiary wishing to disclaim, the disclaimer cannot take place until after the minor reaches the age of majority) •The person disclaiming cannot have benefited from the proceeds of the disclaimed property •The person disclaiming cannot have the assets indirectly pass to him or her An affidavit may be required in which the disclaiming party must swear that s/he has not received any consideration (i.e., something of value) for the disclaimer. The disclaimer must also occur before the disclaiming party has enjoyed any benefits of the trust or inheritance. Many jurisdictions now have statutes that prohibit a disclaimer when the individual is insolvent or receiving certain public benefits due to low income. The individual filing the disclaimer does not get to determine who receives the assets. The assets will pass to the next beneficiary in line, as if the filing individual had died. A disclaimer may be filed with the trustee, personal representative, other fiduciary or person responsible for distributing the interest to the beneficiary. A disclaimer, when effective, is irrevocable and binding upon the beneficiary and all persons claiming by, through, or under the beneficiary, including creditors of the beneficiary. Keep in mind that the person who disclaims the property can't change his/her mind and try to collect the assets later. Please see the state- specific information at the following link: http://disclaimers.uslegal .com/disclaimer-of- property-interest/