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Estate planning: Declining an inheritance in Louisiana

Loved ones usually expect to be included in a close family member’s will. But in certain situations an inheritance is neither expected, nor wanted. Most Louisiana residents don’t realize this during their estate planning, but there are things a beneficiary can do when he or she doesn’t want to accept an inheritance — even a surviving spouse. 

Those who opt out of an inheritance can fill out a qualified disclaimer, which is a refusal to accept property meeting the provisions set forth in the Internal Revenue Code (IRC) Tax Reform Act of 1976. This allows for the property or interest in property to be treated as though it was never received. Any assets go to another beneficiary or heir in this case.

If the primary beneficiary — say a spouse — does not fill out a qualified disclaimer, the asset will go to the beneficiary and will be considered a taxable gift. The IRS requires that a number of qualifications be met for a person to use a disclaimer. One of those entails making the disclaimer within nine months of the testator’s death.

A Louisiana estate planning attorney may be able to help in these instances. He or she can further explain how a disclaimer works and the implications regarding taxation. A lawyer can also explain what becomes of the assets when a beneficiary refuses an inheritance. There are many issues regarding estate planning than can be overwhelming and complex, and an attorney is the first person with whom to speak to get clarification on uncertain aspects of an estate plan.

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