It’s not uncommon for people to inherit things they don’t need or even want. That happens when people don’t talk to their loved ones as they’re developing their estate plan. They assume they’ll want an asset or believe they should have it, so they leave it to them in their will.
Most unwanted inheritances can be sold, donated or stored away in a closet fairly easily. Others – like a home, a boat or an art collection – aren’t so easily disposed of. Further, anything you might get for an unwanted inheritance might not be worth the time and trouble it would take to deal with it.
Florida law
You can decline (“disclaim”) an inheritance. However, you need to follow the law – specifically, the Florida Uniform Disclaimer of Property Interests Act. You can’t just turn it over to another family member.
The law requires that you notify the estate’s executor or (if one hasn’t yet been appointed), the probate court in writing. If your loved one named an alternate or “contingent” beneficiary, they’ll inherit the asset once your disclaimer is official. If there’s no alternate, the asset will be returned to the estate for the executor and the court to determine how it’s handled.
You don’t have to pay any taxes on a disclaimed inheritance because the law treats it as though you never inherited it. You typically have nine months from a person’s death to disclaim an inheritance. However, you can’t take possession of it, use it and then disclaim it.
Consider your options carefully
This isn’t a decision to be made lightly. Be sure you know the pros and cons of keeping the inheritance versus disclaiming it. For example, many people are afraid they’ll have to pay considerable capital gains taxes on a home they inherit that’s increased in value tenfold since their parents bought it, when in reality they only have to worry about the “stepped-up” value between what it’s worth when they inherit it and when they ultimately sell it.
If you’re considering disclaiming an inheritance, it’s wise to have your own legal guidance to help ensure that you’re making the best decision and that you’re following the law.
