Perhaps it was unexpected, or perhaps your family has been planning for this eventuality, but either way, we're often blindsided by a death in the family. And among all the financial loops that need closing and legal questions that must be answered, the question of the will (and other financial arrangements) needs to be settled.
But for a lot of us, inheriting money or other property brings complications we weren't expecting. It can confuse family issues during a very stressful time or lead to more troubling tax consequences down the road. If the deceased owned part or all of a family business, it can be even more confusing. And in talking to your financial advisors, you might be counseled to give up your right to a bequest altogether.
It sounds crazy! Most of us would love a windfall, especially if it means something good can come out of a sad situation. But in fact, there are plenty of reasons to disclaim a bequest, and they cover a wide variety of circumstances. These reasons to disclaim are worth finding out about now, so that if you're ever in that situation, your grieving won't have to be complicated with so many financial questions. And if you're planning your own estate, knowing the rules and tax consequences of disclaimers can help you provide flexibility for your heirs in the event of changing circumstances. Let's look at why you might want to disclaim a bequest.