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Rushing an estate settlement can void a beneficiary's disclaimer

Handing over assets or paying income to a beneficiary can count as acceptance and forfeit the right to disclaim.

At a glance

  1. Haughton is an attorney and vice president of engagement at Hargrove MSO.
  2. A qualified disclaimer treats the beneficiary as never having inherited, so the asset passes to the next person named by the will, trust, account agreement or beneficiary designation.
  3. Handing over assets or paying income to a beneficiary can count as taking the inheritance and close off a disclaimer the family had not yet weighed.

A beneficiary who accepts any part of an inheritance before filing a qualified disclaimer loses the right to disclaim it, David Haughton wrote in a Nov. 4 guest post for Kitces — Nerd's Eye View. Haughton is an attorney and vice president of engagement at Hargrove MSO.

A qualified disclaimer treats the beneficiary as never having inherited, so the asset passes to the next person named by the will, trust, account agreement or beneficiary designation.

It must be in writing, completed within nine months of the inheritance, made before the beneficiary accepts the inheritance, and leave the choice of recipient to the governing documents rather than the disclaimant's direction.

Handing over assets or paying income to a beneficiary can count as taking the inheritance and close off a disclaimer the family had not yet weighed. For advisors, the acceptance condition is the operative one. Private Wealth Daily previously reported on Haughton's path through estate-planning roles.

Reported by the Tax & estate planning desk from Kitces — Nerd's Eye View. Published . Corrections

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