Most of the time, people are pleased to accept an inheritance. However, there are many reasons to not want the inheritance. For example, in small estates, you may receive a home that comes subject to a mortgage, and you can’t afford to pay the mortgage. Even if you receive a property with no mortgage, its costly to pay for maintenance and real estate taxes. Depending on your relationship to the person who died, you may owe inheritance tax on the property and may not have the funds to pay the tax when due. Even if the inheritance is strictly cash, there may be good reason to disclaim. In a large estate, there is a chance estate tax may be paid on that same money twice, now and also on your death if you have substantial assets.
Whatever the reason for not wanting the inheritance, there is no legal obligation to take the property. However, there are rules which must be followed to effectively and properly disclaim the property. The disclaimer must be in writing, describing the property to be disclaimed, and delivered to the proper person (most likely the executor of the estate or trustee of a trust) within 9 months of death. Most importantly, the disclaimer must be made before you accept any benefit in the gift, and it must be an unqualified disclaimer. (No, you can’t have a party at the house and then decide you don’t want it.) Once the disclaimer is made, it is irrevocable -- you can’t change your mind. If you properly disclaim, the property will pass as if you predeceased (you do not get to direct where the property goes).
Disclaiming has very precise rules and nuances. For example, a disclaimer by someone who is receiving medical assistance (such as Medicaid) could disqualify them from benefits. In large estates, improper disclaimers could have significant tax consequences. If you are considering disclaiming, seek the advice of an attorney before accepting any benefit from the property.