When a person dies, they typically leave their assets to their descendants, to charity, or to some other person or entity of their choice. While most people would accept such inheritance, what happens if a person does not wish to receive the inheritance? This is called a disclaimer.
A person may elect to disclaim their interest in inheritance for many reasons, but the most common reason is to accomplish a tax objective. For example, if a person has established a pattern of gift giving during their lifetime, whether for Medicaid planning purposes, or to gift money to their children or grandchildren pursuant to the annual exclusion, then inheriting a sum of money, whether large or small, may jeopardize or nullify the purpose behind their established gift giving. For this reason, this person may elect to disclaim their interest in the inheritance and allow it to pass to the next beneficiary, which is often that person’s own descendants.
Under Ohio law, a person may disclaim an interest in whole or in part, and the person must timely execute and deliver, file and/or record the disclaimer instrument, prior to accepting any benefits of the disclaimed interest. Ohio law places limits on the amount of time a person has to execute and deliver a disclaimer, and so time is of the essence in completing the necessary steps to disclaim your interest upon a person’s death. In order to be considered a qualified disclaimer under Federal tax law, it must meet the requirements set forth under the Federal Tax Code.
If you believe that you may be entitled to some inheritance from a recently deceased person, and you wish to disclaim such interest, the attorneys at Thomas Law Group can assist you in understanding your options and preparing any necessary documents to properly disclaim your interest pursuant to Ohio and Federal law.