It isn't difficult to imagine how heirs to an estate can be caught off guard in the wake of a loved one's death. The experience can happen for a variety of reasons. Maybe theestate planning documents haven't been updated in decades, so the contents don't really apply to the current family situation. Or maybe the estate owner was particularly secretive about what should be done with assets.
In some instances, heirs or beneficiaries discover that they are set to receive an asset or a gift that they don't really want. For example, maybe an heir doesn't want to take on the responsibility of owning, paying taxes on or selling a piece of property, and someone else in the family would be a better fit for the transfer. You don't have to accept the asset if you don't want it, but it's a good idea to have your attorney draft what is called a qualified disclaimer to protect yourself.
A qualified disclaimer can be used to avoid estate and gift taxes, as well as transfer assets across generations. If you disclaim a property, then it will go to the "contingent beneficiary."
However, for a qualified disclaimer to work, it has to meet a number of requirements:
- It should be in writing with your signature.
- It should be handed over to the individual or entity responsible for transferring the property.
- It should clearly identify the property or portion of property to be disclaimed.
- It should be written within nine months after the date the property was transferred.
- If the person receiving the property (the disclaimant) is younger than 21, then the document should be written within nine months after the disclaimant turns 21.
For more on estate administration in Colorado, please visit our probate and estate planning website.