Estate administration isn’t only about distributing assets. The probate process can have major tax implications for heirs and beneficiaries. If a deceased loved one’s estate wasn’t effectively organized with the use of a will or a trust, then a probate judge’s decisions could leave you with a heavy tax burden.
In some cases, even when a decedent’s will is carefully drafted and detailed, the heirs still don’t want the trouble of paying taxes on, maintaining or selling an inherited property. If you are such an heir, then you should know that you have the option of disclaiming a bequest or gift.
To do this, you should speak with an attorney about drafting a qualified disclaimer, which will allow you to renounce your interest in an asset that you would otherwise inherit. For a qualified disclaimer to work as intended, it has to be properly drafted in a timely manner.
The effect of a qualified disclaimer is that the bequeathed property will go not to the first named beneficiary but to the contingent beneficiary, who is usually named in the will or some other document controlling the estate.
For example, maybe you have been named as the beneficiary of a trust that your parent created for you, but you are well off in your own career, and you would rather have your child, who is named as the contingent beneficiary, receive the funds. You can have your attorney write a qualified disclaimer specifying that your child will begin benefiting from the trust once he or she turns 21.
You can find more on probate and asset distribution here.
Source: The Edwardsville Intelligencer, “Using disclaimers in estate planning,” Larry Zucksworth, May 28, 2014