Can You Refuse an Inheritance?

Most discussions about inheritance assume that someone wants the property being offered. Sometimes a person would rather refuse it. They may have concerns about the property, their own circumstances, or how accepting it fits into a broader plan.

A legal disclaimer can allow a person to refuse an interest, but it is not accomplished simply by telling the executor to give the property to someone else.

What does Iowa require?

Iowa Code chapter 633E governs disclaimers of property interests. Section 633E.5 requires a written or other recorded declaration describing the interest, signed by the person disclaiming, and properly delivered or filed. Other sections determine who receives the disclaimer and how it affects the property.

The interest ordinarily passes according to the governing document's disclaimer provisions or statutory rules. The person refusing it does not necessarily get to choose the next recipient.

Can you change your mind after accepting?

Acceptance can prevent a disclaimer. Section 633E.13 also addresses actions such as transferring or pledging the interest. That is why someone considering refusal should get advice before taking control of, spending, or transferring the property.

Giving away property after accepting it is a different transaction. It should not be assumed to produce the same legal or tax treatment as a valid disclaimer.

Is there a deadline?

State-law effectiveness and federal tax qualification are separate issues. Section 2518 of the Internal Revenue Code generally requires a qualified disclaimer within nine months of the later of the relevant transfer or the person's twenty-first birthday, along with other requirements.

The federal rule also addresses acceptance and the property passing without the disclaimant's direction. Simply meeting a time limit does not establish that every requirement has been satisfied.

What else should someone consider?

A disclaimer is not a general method for avoiding every obligation. Iowa section 633E.15 treats a disclaimer as an asset transfer for medical-assistance eligibility purposes. Other circumstances may also need review.

Before refusing an inheritance, understand where it would go, whether the refusal would be effective, and what consequences follow. The decision may become irrevocable, so the useful time to ask those questions is before acting.

Tyler ThompsonAuthor