If you're inheriting, carefully assess if disclaiming that property (in whole or in part) is the best option. Once that decision is made, it's irrevocable, so it's important to carefully consider how much, if any, of those funds you can afford to pass up, Burns said.
Next point of consideration: Who's next in line to inherit? "You can't direct who it goes to," Lehmann said. That might not matter much if you just don't want say, the family time-share, but it could make a big difference if you're disclaiming strategically with the aim of passing assets to a specific person.
If the deceased didn't specify who would get a disclaimed asset or that it would go into a trust, state law determines what happens next. The asset might go to whoever gets the rest of the estate, or state intestacy laws might apply as if there was no will, he said.
Consult experts including a financial advisor and attorney about possible financial consequences to you. If you're trying to qualify for Medicaid, for example, some states consider a disclaimed inheritance as a recently transferred asset, which could affect your eligibility for the program, said Jeffrey Love, an attorney with Winne, Banta, Basralian & Kahn in Hackensack, New Jersey.
Heirs will need to make sure they meet all the requirements for a qualified disclaimer under federal and state law. That includes putting your refusal in writing and notifying the estate executor within a set time frame, usually nine months of the death of the person leaving you the property, said Love.
While you're weighing the decision, keep your hands off that asset. "Generally speaking, you cannot use or receive the benefits of the inheritance and then later disclaim it," Love said.
(The exception: IRAs. The beneficiary who inherits an IRA can still disclaim it after taking a required minimum distribution for the year of the original IRA owner's death, he said.)