In some situations, heirs may want to transfer their inheritance rights. What circumstances make such a move wise? How can you transfer your rights and what are the different ways to do it? A seasoned San Diego trust lawyer goes into details. Still, remember that a personal consultation is the best way to get information relevant to you. Book your free case review at 858-208-8900 at the Law Offices of Irina Sherbak.

The difference between disclaiming your inheritance and assigning it

If you disclaim your share of a person’s estate, the heir next in line will inherit it. When writing their will, people can name alternate heirs. When you disclaim your interest in the inheritance, that share will go the person who was listed as the alternate heir or it will go to the next heir in line if the person died intestate. The point to note here is that you can’t choose who gets your share after you disclaim it.

If you assign your share, you get to choose who gets it. You can assign your share to anybody you want. Some tax issues are avoided, but you would need to talk to an experienced San Diego trust lawyer and/or tax advisor to find out what tax implications apply to your case. Assignments are sometimes used by people who owe money to someone or by people who on government benefits. Their inheritance could disqualify them for those benefits, but in the long run it wouldn’t be as beneficial as the government aid.

Why would anyone disclaim their inheritance?

There are actually many reasons why someone would want to pass up their interest in an inheritance. Here are just a few situations when a person would want to disclaim their share:

• To reduce the size of their estate and avoid estate taxes
• To pass the gift on to the next heir in line with less hassle and no gift tax
• To avoid disqualification from state or federal programs such as SSI or Medicaid
• To save their share from being seized by their creditors (if the heir is facing personal bankruptcy)

Why would someone assign their interest in the estate to someone else:

• To avoid gift tax if they don’t intent to use the money themselves
• To give some share in the estate to an accidentally omitted heir
• To exchange their inheritance for an immediate cash payment from a third party

How do you disclaim/assign your inheritance?

Disclaiming your interest in inheritance needs to be done in writing, naming your details, the details of your benefactor and the extent of your inheritance. The disclaimer should be delivered to the executor or the personal representative within 9 months of the benefactor’s death (or 9 months after you turn 21 if you became the heir as a minor). It is crucial that you don’t receive any benefits from the estate before disclaiming it. When the executor of the estate or the trustee of the trust files tax returns, it is reported that there has been a disclaimer.

Assignments are also executed in writing and delivered to the executor of the estate or the trustee of the trust. No time frame for assignment – that is why people who accidentally pass the required 9 months for a disclaimer end up assigning their interest. The person inherits the property and then assigns, whereas with the disclaimer, the person cannot have any distribution of the inheritance. There are tax implications, but again, you need to seek guidance from a San Diego trust lawyer or a tax professional.

Make an informed choice with a San Diego trust lawyer by your side

Transferring your inheritance rights is an irrevocable act and making the right choice the right way is easiest when you have the support of a knowledgeable and experienced San Diego trust lawyer. You need to be well informed of the implications and consequences of your actions, so that you carry out your intentions as planned. Every case is unique and the relative advantages and disadvantages of various options differ from one case to another. That’s why you’re advised to seek professional help. If you would like a legal consult (without attorney-client privilege), feel free to book your no-cost 30-min. case review at the Law Offices of Irina Sherbak. Call us right away at 858-208-8900!