Refusing an Inheritance
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Brendan Burgess
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If someone leaves you €100k , the maximum tax is €33k, so the only reason you would refuse it is if you wanted someone else to get it, particularly if that person would pay lower tax on it.
Not sure about the hassle. I suppose you could be left a property with an awkward tenant. But I am sure it would be worth the hassle.
Brendan
Or you could be left with a property with a large uninsured mortgage attached, or an estate with a large tax bill attached, necessitating a sale. Or a property that someone else might put a claim in against. (I speak from experience). Sometimes it’s not worth the hassle.
On a Plain
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Yeah these are the sort of scenarios that could be quite a hassle
Brendan Burgess
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What sort of claim?
Brendan Burgess
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If I were left a property worth €100k with a mortgage of €150k, of course, I would disclaim it and the estate would have to sell the property.
Brendan Burgess
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How could that happen?
If someone dies insolvent, then the Executor presumably sells the assets and pays as much of the liabilities as they can.
An uncle leaves you his family home. The uncle’s children claim that the testator failed in his moral duty towards them and lodge a claim under Section 117 of the Succession Act.
A grandmother leaves an estate, including her apartment, worth €100k to her favourite grandson. The grandmother has residual tax liabilities of €100k. If the grandson wants the apartment, he has to pay the tax.
Gordon Gekko
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The claim isn’t against you though, it’s against the estate.
Surely you’d wait and see what happens?
My understanding is that such claims are tough to win.
The hassle arises from the acrimony in the family.
Gordon Gekko
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I wouldn’t see it that way at all.
We don’t have forced heirship in this country.
If Uncle Jack wants to leave me his house, that’s his business. They were his wishes, take the Section 117 by all means, but I just wouldn’t engage.
And if we’re talking about a property, it’s not small change so worth the hassle.
And if their father is bypassing them, they’re probably nasty people all other things being equal!
Some are prepare to live with the fallout. Others aren’t.
Brendan Burgess
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Jay
If my uncle left me something which he should have left to his sons, then I would disclaim it.
But if someone wants to sue the estate, let the estate deal with it.
I am with Gordon on this "Watch and wait." I would not disclaim it because someone was a troublemaker.
If my uncle left me something which he should have left to his sons, then I would disclaim it.
But if someone wants to sue the estate, let the estate deal with it.
I am with Gordon on this "Watch and wait." I would not disclaim it because someone was a troublemaker.
Brendan Burgess
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Surely the tax liability falls on the estate? If the tax liabilities exceed the value of the assets, they can't give me the apartment.
Brendan
Gordon Gekko
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What fallout though?
It depends on the background.
One of my uncles and I aren’t particularly close, just normally so.
He has a great relationship with his kids.
If he left me his house, I’d disclaim it.
But one of my best friends does everything for his elderly aunt and uncle and has done so for years. He does a huge amount for them. Their own kids are very selfish, entitled and do nothing, literally. If my friend was left the house or something of value, I don’t think he should disclaim.
But there is such thing as respecting the wishes of the deceased. If I want to leave something to someone, it’s my money!
The phrase “where there’s a will, there’s a row” applies in a lot of cases.
It of course all depends on the background and circumstance and I’m not suggesting you automatically disclaim. You would of course wait to see how things played out.
But you don’t have to look too far to see how bad things can end up for people when an aggrieved party or parties feels strongly about what they perceive to be their “entitlement”.
If you decide to go with the testator’s wishes and accept the gift where the children feel aggrieved, it can lead to a lot of personal hassle for you down the line in a family scenario.
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When you disclaim an inheritance, you have no say in where it goes or who gets it.
It goes back into the residue of the estate and is distributed accordingly - which may be under intestate rules if this was not covered in the will.
If you want it to go to someone in particular, the best is to accept the inheritance and then gift it to the recipient - and yes, there may be more tax to pay this way
It goes back into the residue of the estate and is distributed accordingly - which may be under intestate rules if this was not covered in the will.
If you want it to go to someone in particular, the best is to accept the inheritance and then gift it to the recipient - and yes, there may be more tax to pay this way