Maybe you told your mother repeatedly that you didn’t want her house when she died, and that she should leave it to a charitable organization. Perhaps you told your father you didn’t want his vintage Rolls-Royce. They didn’t listen.
Now they’re gone and you’ve inherited an asset you don’t want or need and couldn’t afford to keep up if you kept it. Some unwanted inheritances, like jewelry or a set of fine China, are easy enough to store – perhaps for a future generation. What do you do when you’ve inherited something that it’s going to take time and effort (and probably money) to unload or that someone else in the family could use or appreciate?
Disclaiming the inheritance
“Disclaiming” an inheritance is the legal term for declining it under both federal law and the Texas Uniform Disclaimer of Property Interests Act. When this is done according to the law, the asset will pass to the “contingent beneficiary” if there is one. If there’s no contingent beneficiary, it will be returned to the estate. You won’t have to worry about paying any taxes on it because it will be as though you never inherited it. Of course, you can’t use it and then disclaim it. You need to notify the estate’s executor or the probate court if an executor wasn’t named.
Gifting an unwanted inheritance
If another family member isn’t the contingent beneficiary, and you decide you’d like someone else in the family to have it, you may consider accepting it and giving it to them as a gift. However, you need to be aware of the tax implications of that both for yourself and for them.
If you inherit a large asset you don’t want, it’s essential that you seek legal and perhaps financial guidance before you take possession of it or use it in any way. Perhaps you might find that accepting it and then selling it won’t be as complicated as you anticipated. Getting sound advice will help you determine how best to handle it.