Many wealthy people wish they could amend their parents’ estate plans after their parents pass away. Few know that they can. What often happens is that a wealthy person’s parents will leave a large estate to someone who does not need it. The estate will be subject to the estate tax. The wealthy person who inherited the estate will then just keep the assets and leave them to his or her own children eventually. The same assets will be subject to the estate tax again.
The way around this double estate tax on the same assets is to amend the deceased’s estate plan by using a disclaimer. This is basically a legal way for the person who would receive the inheritance under the written terms of the estate plan to say, “I do not want it. Give it to the next person in line.” The law will then distribute the assets as if the person who disclaimed them had already passed away. In the case of the example in the preceding paragraph, that would mean the assets would go to the children now and only be subject to the estate tax once.
Talk to an attorney if you are set to receive a large inheritance. It might be better to disclaim it in some cases.
- Thought of the Day - March 22, 2023
- Thought of the Day - March 15, 2023
- Thought of the Day - March 8, 2023
