In Texas, what happens if you refuse an inheritance? Here’s what happens to the estate
While it may seem unlikely, some people make a personal decision to refuse an inheritance to avoid estate taxes, loss of eligibility for government aid and other hassles.
“If you are considering disclaiming an inheritance, you need to understand the effect of your refusal—known as the ‘disclaimer’—and the procedure you must follow to ensure that it is considered qualified under federal and state law,” according to Investopedia.
You won’t be responsible for inheritance taxes if you decline an inheritance. Under Internal Revenue Service rules, to refuse an inheritance, you must execute a written disclaimer that clearly expresses your “irrevocable and unqualified” intent to refuse the bequest within nine months of the death. If you plan to disclaim the inheritance, have an estate planning attorney create the disclaimer to protect yourself, suggests Texas Trust Law.
What happens to the bequest?
You’ll have no say in who receives the assets in your place, according to LegalZoom. It passes to the contingent beneficiary listed in the will.
If the person died without a will, Texas intestate succession laws determine who it goes to. Intestate refers to dying without a legal will, in which case deciding how their assets will be distributed becomes the responsibility of a state probate court.
Is Texas a forced inheritance state?
“In Texas, there is no forced heirship. In other words, a parent is not required to leave property to his or her children,” writes the Texas Young Lawyers Association. “However, one cannot disinherit heirs if he or she dies without a will. Under the intestate distribution statutes, property may pass to undesired heirs instead of those the decedent would have chosen.”
What is right of first refusal?
A right of first refusal means that, before the property is placed on the market, the designated person can buy it from the estate.
Here’s how to create a right of first refusal in your Texas estate plan, per the Silberman Law Firm: You’ll need a document that outlines the terms of the agreement and identifies the individual or individuals who have the right of first refusal. It will then need to be signed by all parties involved and notarized.
In doing so, the trustee at your death must offer the designated child or children the right to purchase the real property in the trust estate before distribution of the trust estate in equal shares, according to Chauvel & Glatt, LLP.
How does last will and testament work in Texas?
A will, otherwise known as a “last will and testament,” can be used to leave your property to people or organizations. It can also be used to name a personal guardian to care for your children, among other things.
In Texas, you don’t need to notarize your will to make it valid, however a notary is required if you want to make your will self-proving, which means the court can accept your will without needing to contact your witnesses to prove its validity.
Texas law does not require you to use a lawyer to make your will in Texas. While you can make your own will, it must still meet certain legal requirements to be considered a valid will.
