Disclaimer
Planning
A beneficiary can refuse an inheritance so it passes to the next person in line, without it counting as a gift. Families use disclaimers to fix plans that no longer fit, but the window is 9 months and the rules are strict.
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Rewriting the plan after death
Sometimes a will, trust, or beneficiary form leaves property in a way that no longer makes sense for the family. A beneficiary can refuse, or disclaim, an inheritance, and the property then passes as if that person had died first, to whoever is next in line. If it is done correctly, it is not treated as a gift from the person disclaiming.
The window is short: the disclaimer generally has to be in writing and delivered within 9 months of the death, and the person must not have used or benefited from the property first.
What makes a disclaimer qualified
| Requirement | What it means |
|---|---|
| In writing | An irrevocable, unqualified refusal, signed and identifying the interest disclaimed |
| Delivered within 9 months | Received by the executor, trustee, or holder of title within 9 months of the transfer (for an inheritance, the death), or of turning 21 if later |
| No benefits accepted | No use of the property, income from it, or direction over it before disclaiming |
| No say in who gets it | The property passes under the will, trust, beneficiary form, or state law, as if the disclaimant had died first |
| Surviving spouse exception | A spouse may disclaim into a trust that still benefits the spouse, such as a credit shelter trust |
How families use disclaimers
- A surviving spouse who does not need everything can disclaim part of it into a trust the will creates for the family, often one that still pays the spouse. That can use the first spouse’s exemption for state estate tax, which usually cannot be carried over otherwise.
- A child who is already well provided for can disclaim so the property passes to their own children. That can raise generation-skipping transfer tax issues, which have to be handled on the estate tax return.
- A beneficiary of an IRA can disclaim so the account passes to the next beneficiary, which can change who pays the income tax and how fast the account must be emptied.
- Disclaimers to charity: if a charity is next in line, the disclaimed property can produce a charitable deduction for the estate.
Before anyone disclaims
- Confirm exactly who would receive the property. The person disclaiming cannot choose; the will, trust, beneficiary form, or state law decides.
- Do not take income, use the property, or move it around first. Keeping it safe as executor or trustee is fine.
- Follow your state’s disclaimer rules too, which have their own form and delivery requirements.
- A disclaimer does not protect against a federal tax debt, and it can affect Medicaid eligibility.
What we handle
- Showing who would receive each asset if a beneficiary disclaims
- Comparing the tax results of disclaiming all, part, or none
- Coordinating the disclaimer with the estate tax return and elections
- Tracking the 9-month deadline
Frequently Asked Questions
What does it mean to disclaim an inheritance?
Disclaiming means refusing an inheritance in writing. The property then passes as if you had died before the person who left it, to whoever is next in line under the will, trust, beneficiary form, or state law. If the disclaimer meets the federal requirements, it is not treated as a gift by you.
How long do we have to disclaim?
Generally 9 months from the date of death, and the written disclaimer has to be delivered within that time. The person disclaiming also must not have accepted the property or any benefit from it first. State law may add its own requirements.
Can a surviving spouse disclaim and still benefit?
Yes, that is a special exception for spouses. A surviving spouse can disclaim property into a trust that still pays the spouse, which is often used to take advantage of the first spouse’s exemption for state estate tax.
Can the person disclaiming choose who gets the property?
No. The property passes to whoever is next in line under the will, trust, beneficiary form, or state law. If the person disclaiming directs where it goes, the disclaimer does not qualify.