Just Say No – Am I Crazy to Refuse
My Inheritance?

It might seem strange to imagine a situation where someone would actually turn down an inheritance.
But it happens, and for good reason.

Before accepting or refusing an inheritance, it’s important to weigh all of the pros and cons, understand
all of the consequences of your decision, and know what steps you need to take to make it legally
effective.

So why would someone not want to take a part or all of their inheritance?

1) Sentimental/No Value = Big Headache
Hummel figurines, encyclopedia sets, place settings for 18, vacation shot glasses, costume
jewelry….the good intention is there, but unfortunately it doesn’t often come with good taste or
storage space.
It’s perfectly ok to just tell yourself: ‘put the duck phone down’.
Of course, short of refusing, you could accept with grace and either live with the clown clock for
a bit or try to sell on eBay or FB Marketplace or donate to a local Habitat for Humanity ReStore.
As George Carlin used to say: some people’s stuff is crap, other people’s crap is stuff!

2) The juice ain’t worth the squeeze
This comes up most often with real estate or vehicles, when the cost to maintain and insure,
geography and difficulty to reach it, or the cumulative aggravation of maintenance tasks far
exceed the thing’s value. Inheriting a plot of land in upstate-wherever sounds romantic, until the
property tax and bills start rolling in, changes in the local zoning law prevents or constrict any
new build, or homeowner’s insurance skyrockets due to the house being vacant or flood
coverage is required.

3) Your financial future looks…shady
A bankruptcy filing or a looming divorce will likely require your stuff to be splayed out for review.
In short, whatever you are slated to inherit maybe it’s something you’d end up losing anyway so
it might not make sense taking it to the battlefield. That being said, your right to disclaim could
be barred if it rises to the level of fraud against your creditors.

4) There are strings attached
People can be downright nutty about their stuff and can come up with unique restrictions or
conditions to a beneficiary accepting an inheritance.
A few choice examples: an [allegedly] valuable but GI-NORMOUS piece of outdoor art that
requires display on your front lawn with special signage, a pet cat that requires expensive food,
clothing or care, crematory ashes that require an arts-and-crafts-like apportionment into custom-
made urns.

5) You actually prefer that whatever it is passes to someone else
It’s very possible that by your disclaiming the gift (of cash, a car, etc.), it can pass to someone
who could use it/love it better. Look out for language that talks about what happens in the event
of a ‘disclaimer’ or talk with an estate attorney who can sort out the path for you.

So how would or should someone say ‘no thank you’ to an inheritance?
Keep in mind its super difficult – if not impossible – to effectively and legally say ‘no thanks’ to something
you’re already in possession of. Like if you’ve already changed title to a car, you consented to the
recording of a Deed for real estate with you as Grantee, or filled out claim paperwork for transfer of a
Decedent’s IRA to an inherited IRA in your name.

That being said, if you’re inclined to give a hard pass to the inheritance, the source of the inheritance
clues you in to who you need to notify. (e.g. if the inheritance is set out in a Will or Trust, notify the
Executor or Trustee)

The key here is a not-so-little-thing called ‘positive declination’, a crucial 2-step process for these types
of situations:
1) You should send a letter specifically declining or ‘renouncing’ your inheritance, including as
much detail as possible, to avoid anyone simply assuming you’d want whatever may be coming
your way. DO THIS AS SOON AS POSSIBLE – ideally via email or certified mail so you have proof
of delivery.

2) You should sign off on a Disclaimer
You need to close the proverbial legal loop by making sure the refusal of inheritance is done
properly under both state and federal law.

What’s a DISCLAIMER ? Some basics:
A disclaimer is a legal, written refusal to accept a gift. And you gotta give a specific description of what
you’re disclaiming.

Its effect? Your would-be gift passes to whoever would have received it if you had died before the
person died who left it to you. You don’t get to direct where the gift goes.

EX: If mom leaves $ to son and daughter and son disclaims, son’s kids get his $, not daughter/sister.
EXCEPTION: Mom may have spelled out where disclaimed gifts go, so read the Will or Trust carefully.
Signed Disclaimers must be (i) given to the Executor, Administrator or Trustee (ii) filed with the
Surrogate or Superior Court (iii) recorded with the County Clerk if real estate is involved. There
absolutely are filing fees and need to be witnessed by 2 people and notarized (same requirements that
exist for Deeds).

Generally speaking, there’s no deadline to file a disclaimer; BUT there is a 9-month filing/recording
requirement if you intend it to be a ‘qualified’ disclaimer for tax purposes.

Translation: For states like New Jersey with an inheritance tax, a Class C or D beneficiary filing a
qualified disclaimer that effectively sends a gift to a Class A beneficiary means that no tax will be owed.

Accepting or not accepting an inheritance is a big decision. In the end, noone can make you take
something that you don’t want. But you do need to make sure that you formalize your ‘no thanks’ in the
right way, at the right time, to make it effective.