What happens if a person named in a Will does not want to accept an inheritance gift? Our firm is often asked this question when handling the probate process. It is an important question because disclaimers affect the shares of the remaining beneficiaries and have potential tax implications.
How Can a Person Refuse an Inheritance?
The main requirements for a disclaimer is that it be in writing, describe what specific interests are being disclaimed, and be signed. The disclaimer must then be filed in the Orphans’ Court of the county where the deceased passed away. (You can read the entire law at 62 P.A. C.S. § 6201). The person disclaiming can refuse any kind of interest, whether money or property, or whether all or just a portion of their entitlement from the estate.
It is also a good idea to record disclaimers of real estate with the Recorder of Deeds. This provides title agents and potential buyers with notice of the disclaimer and avoid delays in closing.
What Happens When a Share of Inheritance is Refused?
The law treats a person who has disclaimed as having predeceased the person who wrote the Will. This means that the property that was refused passes according to the contingent beneficiaries or residuary beneficiaries of a Will, or via the intestacy law if there was no Will. It is very important to carefully consider how a disclaimer affects the next recipient in line to receive the property as well as the inheritance tax rate implications of a disclaimer.
As a probate law firm for estate executors, we help settle estates efficiently and reduce stress. If you know someone faced with a probate process or roadblocks to an estate property sale, please have them contact us for a free evaluation at:
Phone: (215) 918-4242
If you are not quite ready for a consultation, download our probate handbook HERE. We’ll send you helpful probate guides and resources so you know how to handle the estate.