It may seem unlikely, but some people do not want to receive an inheritance. How does this work?
The website, final duties, has explored this very question. Perhaps if someone had a bad relationship with the deceased person when they were alive, they do not feel right accepting an inheritance from them. Or it might be about proving independence if someone thinks they have enough money of their own, and other beneficiaries named in a Will should share the estate instead.
Legally, there are two ways to refuse an inheritance. You can either disclaim it or create a deed of variation in the Will. But to make sure your wishes are taken into account, declining inheritance must be made in writing, and done within two years of the date of death of the testator.
A disclaimer must apply to the whole gift, so you can’t refuse part of the estate while accepting some of it and the heir must not have received any of the gift before the person died. If you disclaim your inheritance, this means you can’t ever become the legal owner so it is a step that should be taken after due consideration. Neither can the person who disclaims the inheritance then decide who receives his or her share among the remaining beneficiaries.
Anyone who wants to disclaim their inheritance should seek professional legal advice.
Another way to deal with an unwanted inheritance is to use a deed of variation to redirect the gift. This has the effect of changing the Will’s contents as if the alterations were made by the testator before they died. This allows the executors and beneficiaries more control of the redistribution, and can allow the beneficiary to part refuse the estate—so, for example if there was a property involved, they could say no to a share of it but accept their part of liquid assets. The refused inheritance can also be redirected by the beneficiary to whoever they choose—perhaps someone who was not mentioned in the original Will.
People can accept an inheritance and then gift it to someone else, but this may have tax implications. If a gift of property is given by a parent to a child, the gift will not be subjected to inheritance tax so long as the giver does not die within seven years. If they do die, then the value of the asset is added back into the estate for tax calculation.
Finders International have a range of Legal Support Services to assist solicitors and other legal professionals including our Missing Will Service, Unclaimed Assets and Overseas Bankruptcy Searches. To find out more, please visit our website. Alternatively, you can email [email protected] or telephone +44(0) 20 7490 4935.