Disinherit me, please!

July 1, 2009 12:46 PM

What steps do I have to take to ensure I do not inherit anything from my family's estate, even if I'm included in the will?

I want to make sure that my sister gets everything when my mother passes away, but my mother is insisting on leaving me in the will and that everything that might possibly be left be divided evenly between us. I don't want anything in an active, deep, might-set-fire-to-it way, and despite repeated requests, my mother will not remove me from her will and name my sister the sole heir.

What can I do, in the event of my mother's death, to make sure that everything goes to my sister?

If it helps: we are in the U.S. I live in a different state from my mother and sister. My sister lives with my mother.

posted by medea42 to law & government (17 answers total)

I'm not sure if it's possible while your mother is alive (it's a state law issue). After, you can almost certainly disclaim your interest.
posted by exogenous at 12:51 PM on July 1, 2009 [4 favorites]

Is there a specific reason you couldn't just give it all to her?
posted by restless_nomad at 12:51 PM on July 1, 2009

Is there a specific reason you couldn't just give it all to her?

I don't know EXACTLY how tax law works...but I can definitely see this happening:

1. Mom dies...some assets pass to offspring who wants nothing. Those assets are taxed.
2. Offspring passes those HUGE assets off to sister. Taxed again.

So yeah...you might want to talk to your sister...and say "hey, can you spend X to get a lawyer for me so that I don't get any of mom's stuff...and it goes directly to you?"

I'm sure she'll agree...and if she doesn't...WTF...why does nobody in your family listen to you?

Good luck.
posted by hal_c_on at 12:55 PM on July 1, 2009 [1 favorite]

To expand on exogenous's answer, disclaiming your interest will do exactly what you want -- the inheritance is distributed as if you weren't in the will at all. E.g., if there were 4 people who took equal shares and one disclaimed, then the other 3 would each get 1/3 of the estate. If it's just you and your sister, you disclaiming would give her the entirety of the estate.
It couldn't hurt to check with a lawyer in your mother's state (or write in to one of those consumer legal columns) to make sure there are no unexpected hitches, but disclaiming is definitely what you want.
posted by katemonster at 12:57 PM on July 1, 2009

A will offers you the inheritance, but does not force you to accept. You can override the will by disclaiming in the proper manner under your state's law.
posted by bunnycup at 1:00 PM on July 1, 2009

I don't know EXACTLY how tax law works...but I can definitely see this happening:

1. Mom dies...some assets pass to offspring who wants nothing. Those assets are taxed.
2. Offspring passes those HUGE assets off to sister. Taxed again.

US tax law currently exempts all of an estate below $3.5 million from federal estate tax.

The simplest way to manage this is to pay the taxes, whatever they are, out of the unwanted inheritance, then give the balance to the sister in annual amounts that are below the gift tax exemption (or that pre-pay the taxes for her).

If your share of your mother's estate is going to be more than a million dollars or so, you can hire someone at a bank and trust company to manage the whole thing for you. Pretty much any bank that advertises "Private Banking" can do that, and banks that have "Trust Company" in their name generally have a large and experienced staff.

I am not a lawyer or a financial advisor, and you should probably get the advice of those folks.
posted by Sidhedevil at 1:02 PM on July 1, 2009

US tax law currently exempts all of an estate below $3.5 million from federal estate tax.

Even if that applies here (which is not a safe assumption if the estate includes real estate in certain markets), that doesn't really take care of the second transfer, which might be taxed, does it? (I am not a trust/estate lawyer and this is not legal advice, just a follow-up question.)
posted by The World Famous at 1:09 PM on July 1, 2009

Is there a specific reason you couldn't just give it all to her?

Curiously, real estate law here in California does not step up the tax basis for parent/child transfers of real estate but does for transfers between siblings.

So to transfer property tax-free between siblings you need a surviving parent to be the intermediary.
posted by @troy at 1:29 PM on July 1, 2009

Medea42 would not be taxed (even if we're talking about those really large sums of money which are taxed) if she disclaims. She never receives the money (it remains in the estate, and then goes to her sister), so she is never taxed on it.
posted by Houstonian at 2:15 PM on July 1, 2009

Canada: I can't remember how it worked exactly (another sibling worked out the details), but when my father died we were able to sign some papers that disinherited/disowned/something us of the estate. Speak to a lawyer who knows about wills and estates and such.
posted by Billegible at 2:23 PM on July 1, 2009

I like hal_c_on's suggestion of having your sister hire a lawyer (estate planning lawyer probably). If we're talking about a large estate she'll more than come out ahead.

IANAL or tax pro and therefore can't offer any advice that's worth a damn. In general, if you intend to disclaim you should be careful to never take possession of or even temporarily benefit from assets your mom intends to pass on to you.

If the value of the assets is more than the gift tax annual exclusion (currently 13K) you may have to pay gift taxes or use part of your credit if you inherit and subsequently give to your sister. In that case, the disclaimer is probably better.
posted by powpow at 3:23 PM on July 1, 2009

Also, none of my business but... if you don't want the assets because you're unhappy about how your mom behaved in the past, you could donate your share to a charity or cause (or several). Presumably you'd pick a cause that can help reduce that type of behavior in future generations or otherwise makes the world a better place.
posted by powpow at 3:46 PM on July 1, 2009

>US tax law currently exempts all of an estate below $3.5 million from federal estate tax.

>Even if that applies here. . . that doesn't really take care of the second transfer, which might be taxed, does it?

The second transfer is covered by the gift tax, which has a $1 million exemption.
posted by megatherium at 4:02 PM on July 1, 2009

if the assets are mostly money, you could establish a trust in your sister's name.
posted by thinkingwoman at 4:12 PM on July 1, 2009

From pp. 346-347 of Estate Planning and Taxation (2006) by John C. Bost (links added by me):

"...if one accepts a gift or bequest and then transfers the property to another, it will trigger a transfer tax unless the transfer is sheltered by the annual exclusion...To avoid creating a taxable transfer, a donee might wish to refuse the gift. Section 2518 [of the Internal Revenue Code] allows the donee to "disclaim" a gift in such a way that it will be as if the gift was never made...In order to disclaim and have this favorable result, referred to as making a tax effective disclaimer, i.e. the disclaimer does not generate a taxable transfer, the following requirements must be met:

1. The refusal is "an irrevocable and unqualified refusal...to accept" the interest.
2. The interest is made in writing.
3. The refusal is made within nine months after the later of:
* the date on which the transfer creating the interest was made, or
* the day on which the person disclaiming reaches age 21.
4. The donee (i.e., the disclaimant) did not accept any interest in the benefits.
5. And, as a result of the refusal, the interest passes (without the disclaiming person's direction) to someone else.

With regard to the fourth requirement, acts indicating "acceptance" include using the property, accepting dividends, interest, or rents from the property, and directing others to act with regard to the property."

So...yes, you can legally disclaim your interest in your mother's estate - but if you're serious about this, please make sure you do it right. U.S. estate tax law is complex and ever-changing.

(I am an accountant, I am not your accountant, this is not professional advice, etc. I suggest that you consult with a lawyer).
posted by velvet winter at 7:19 PM on July 1, 2009

See if you can get your mom to set something up like a trust, with you as a trustee. Your mom can then set up the trust however she wants. You mom's will would simply send all her assets to the trust. Upon death, you would be in control of the trust and be able to change its parameters to send all the money to your sister.

But, since you asked, I would think long and hard about your decision to not want anything from your mom. Whatever the gripe you have with her is between you and her. Once she passes on, that gripe is gone. (Or, at least, gone as far as she is concerned. You still have to live with it.) At that point, you are just talking about money and stuff. In essence, free money. You will have already "paid" for it while your mother was living.

(Or, to use another analogy, if you were the employee and your mom was the boss, would you not cash your paycheck just because she was a bad boss? That doesn't change how she behaved. It simply negatively affects you.)

Also, what happens 10 years after mom's passing? Your sister has all the stuff, and you don't. Will you at some point develop a gripe/jealously against her for daring to enjoy mom's money after how mom treated you? What if you unexpectedly end up needing the money?

Basically, it won't matter after she's dead. And there's nothing you can do while she's alive- it is her stuff and regardless of how you feel about it, she gets to decide what to do with her stuff.

Find another way to get her back...
posted by gjc at 6:03 AM on July 2, 2009

gjc> this is a legal question, not a personal one. In a nutshell, my mother has a lot of crap. I do not want to be saddled with crap, despite her best efforts to dump it on me in life OR in death.
posted by medea42 at 12:13 AM on July 4, 2009