How to Refuse an Inheritance (And Why You Might)

Key takeaways

• You can legally refuse any inheritance through a formal disclaimer process, but you must act within nine months of the benefactor’s death.
• If you refuse an inheritance, you can't control who receives the deceased's assets in your place—they pass to contingent beneficiaries or according to state intestacy (dying without a will) laws.
• State-specific requirements vary significantly. Each state has its own forms and filing procedures.
• Once you disclaim an inheritance, the decision is irrevocable and you won't be able to change your mind later.

What does it mean to refuse an inheritance?

Refusing (disclaiming) an inheritance is the formal legal process of rejecting your right to receive assets from a deceased person's estate. When you disclaim an inheritance, you're essentially stating that you don't want to accept the bequest (money or property left in a will, trust, or beneficiary designation), and the law treats it as if you died before the decedent.

The legal terminology can vary depending on the context. "Disclaiming" typically refers to rejecting assets received through intestacy (when someone dies without a will), while "renouncing" usually applies to rejecting bequests made in a will. That said, these terms are often interchangeable in practice.

It's important to understand that disclaiming an inheritance is different from simply giving away inherited assets after you receive them. When you disclaim, you never legally own the assets, which means you avoid potential tax consequences and other legal obligations. If you were to accept the inheritance first and then give it away, that would be considered a gift subject to gift tax rules.

Reasons you may want to refuse an inheritance

There are several circumstances that might lead someone to refuse an inheritance. You may find it helpful to understand these scenarios while you determine whether disclaiming makes sense for you.

Avoiding estate taxes

If accepting an inheritance would push your estate over the federal estate tax exemption threshold (which is $13.99 million per person in 2025), you might want to disclaim to keep your estate under this limit. This strategy is particularly relevant for wealthy individuals who want to minimize the tax burden on their own heirs.

Preserving government aid eligibility

Accepting a large enough inheritance could push your assets above eligibility limits for certain government programs and disqualify you from benefits like Medicaid, Supplemental Security Income (SSI), or other need-based assistance. You may wish to refuse the inheritance to preserve these benefits if losing them would cause financial burden.

Avoiding problematic assets

Sometimes inherited assets come with more problems than benefits. You might inherit a property with significant tax liens, environmental issues, or structural problems that would cost more to resolve than the property is worth. Similarly, inheriting a business with substantial debts or legal liabilities might not be in your best interest.

Family considerations

Some people choose to disclaim an inheritance to benefit other family members. For instance, if you're financially stable and your sibling is struggling, disclaiming your share might allow them to receive a larger portion of the estate. You can’t choose who your refused assets go to—they will be distributed to the next beneficiary according to the contingencies listed in the will, so make sure you understand the document before using this strategy.

How to refuse inheritance: Step-by-step instructions

When renouncing an inheritance, it's critical to pay strict attention to legal requirements to ensure your disclaimer is valid. 

Step 1: Review the will or trust documents

Even if you know you plan to reject the inheritance, it's wise to take a close look at exactly what you're inheriting and how the assets would pass if you refuse them. Carefully review the will, trust documents, or other estate planning documents to identify any contingent beneficiaries or alternative distribution plans. If there are no contingent beneficiaries, the assets will typically pass according to your state's intestacy laws, which might not align with your intentions.

Step 2: Prepare a formal disclaimer form

The disclaimer needs to be a written document that clearly states your "irrevocable and unqualified" (final and complete, with no conditions or exceptions) intent to refuse the inheritance. Include specific language identifying the decedent, describing the assets you're refusing, and stating that you're making the disclaimer without receiving any consideration in return. Some states provide standard disclaimer forms, but you can also draft your own or work with a legal professional as long as it meets the legal requirements.

Step 3: Sign and deliver to the relevant party

The next step is to sign and deliver your disclaimer to the executor of the will or the personal representative of the estate. Some states require you to file with additional parties, such as the trustee of a trust or other beneficiaries. Check your state's specific requirements to ensure you file with all necessary parties or consult an estate planning attorney. 

Rules to keep in mind

While the process is relatively straightforward, there are a lot of rules and regulations that you may need to consider to ensure your disclaimer is valid. 

Meet federal and state deadlines

The Internal Revenue Service (IRS) requires you to disclaim an inheritance within nine months of the decedent's death, as this is the deadline to file an estate tax return. Some states have different deadline requirements, so it's crucial to understand both federal and state time limits. Missing these deadlines will invalidate your disclaimer.

Special considerations for minors

If a minor inherits assets, they have until nine months after they reach age 21 to make the disclaimer. Their parent or guardian may be able to make a disclaimer on their behalf, but only with court approval. It's best to consult an attorney if you're a minor or the guardian of a minor who wants to disclaim their inheritance. 

Legal consequences and potential tax implications

It's important to understand the legal and tax implications to make an informed decision about whether to proceed with a disclaimer.

Impact on other beneficiaries

When you disclaim an inheritance, the assets pass to whoever would have received them if you had died before the decedent. This might be a contingent beneficiary named in the will, or if no contingent beneficiary exists, the assets will pass according to your state's intestacy laws. Your disclaimer could significantly benefit other family members, but it could also result in assets going to people you wouldn't have chosen.

Tax consequences

One of the primary advantages of disclaiming an inheritance is to avoid inheritance and other tax consequences. When you disclaim, you legally never owned the assets, so you won't owe income tax on any appreciation or estate tax on the assets' value.

However, you also lose the "stepped-up basis" benefit that inherited assets typically receive, which could affect the tax situation of whoever ultimately receives the assets.

Common mistakes to avoid

• Missing the nine-month deadline makes your disclaimer invalid.
• You also can't disclaim an inheritance if you've already accepted any benefits from it, such as receiving rental income from inherited property or dividends from inherited stocks.
• You can't direct where the disclaimed assets go—attempting to do so may invalidate the disclaimer and could result in gift tax consequences.

State-specific rules and required forms

While federal tax law provides the framework for inheritance disclaimers, each state has its own specific requirements and procedures.

• Filing with court. Some states, such as California, require you to file disclaimers with the probate court within a reasonable time after learning about the inheritance.
• Specific language. Certain states outline specific language in their probate code that you must include in your disclaimer.
• Additional requirements. States like Ohio provide detailed requirements for disclaimer content and filing procedures.

Some states allow deadlines for filing disclaimers or have different triggering events for when the deadline begins. For that reason, it's crucial to research your specific state's requirements or consult with an attorney familiar with your state's disclaimer laws.