Disclaimer of interest (also called a renunciation), in the law

Law

Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...

 of inheritance

Inheritance

Inheritance is the practice of passing on property, titles, debts, rights and obligations upon the death of an individual. It has long played an important role in human societies...

, wills

Will (law)

A will or testament is a legal declaration by which a person, the testator, names one or more persons to manage his/her estate and provides for the transfer of his/her property at death...

 and trust

Trust law

In common law legal systems, a trust is a relationship whereby property is held by one party for the benefit of another...

s, is a term that describes an attempt by a person to renounce their legal right to benefit from an inheritance (either under a will or through intestacy

Intestacy

Intestacy is the condition of the estate of a person who dies owning property greater than the sum of their enforceable debts and funeral expenses without having made a valid will or other binding declaration; alternatively where such a will or declaration has been made, but only applies to part of...

) or through a trust.

There are a number of reasons why a person might wish to avoid an inheritance, particularly if the proceeds would only go to their creditor

Creditor

A creditor is a party that has a claim to the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or service to the second party under the assumption that the second party will return an equivalent property or...

s, or if it would drastically affect their income tax

Income tax

An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...

 liabilities. Under the common law

Common law

Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...

, a person who disclaimed their interest would be treated as though they had died before the trust or will came into effect. This was a sensible option if the disclaiming party was an heir by descent, whose own children would then take in his place and without the imposition of a gift tax

Gift tax

A gift tax is a tax imposed on the gratuitous transfer of ownership of property. The United States Internal Revenue Service says a gift is "Any transfer to an individual, either directly or indirectly, where full consideration is not received in return."When a taxable gift in the form of cash,...

.

The disclaimer must be in writing and submitted to the court overseeing the disposition of the estate within a legally specified time period, which is usually nine months after the death of the person from whom the disclaiming party stands to inherit, or twelve months after the creation of a trust by a living person. An affidavit

Affidavit

An affidavit is a written sworn statement of fact voluntarily made by an affiant or deponent under an oath or affirmation administered by a person authorized to do so by law. Such statement is witnessed as to the authenticity of the affiant's signature by a taker of oaths, such as a notary public...

 may be required in which the disclaiming party must swear that he has not received any consideration

Consideration

Consideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from...

 (i.e., compensation) for the disclaimer. The disclaimer must also occur before the disclaiming party has enjoyed any benefits of the trust or inheritance. Many jurisdictions now have statute

Statute

A statute is a formal written enactment of a legislative authority that governs a state, city, or county. Typically, statutes command or prohibit something, or declare policy. The word is often used to distinguish law made by legislative bodies from case law, decided by courts, and regulations...

s that prohibit a disclaimer when the individual is insolvent or receiving certain public benefits due to low income.

A disclaimer of interest is irrevocable. It must be a complete, and not a partial disclaimer. Such a disclaimer can be made by a legal guardian

Legal guardian

A legal guardian is a person who has the legal authority to care for the personal and property interests of another person, called a ward. Usually, a person has the status of guardian because the ward is incapable of caring for his or her own interests due to infancy, incapacity, or disability...

 on behalf of a person who lacks the capacity

Capacity (law)

The capacity of both natural and legal persons determines whether they may make binding amendments to their rights, duties and obligations, such as getting married or merging, entering into contracts, making gifts, or writing a valid will...

 to make the disclaimer themselves, but this usually requires the finding by a court

Court

A court is a form of tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance with the rule of law...

 that the disclaimer is in the ward's best interest.

Disclaimers and Deeds of Variation: England and Wales

In England and Wales, a disclaimer is likewise irrevocable and covers the entire testamentary gift. It may be a unilateral act but should be communicated in writing to the persons administering the estate. It does not need to be registered with the court; the persons administering the estate are obliged to retain the communication as they may be required to provide an account to the court of their actions in the administration.

A similar effect to a disclaimer (including for inheritance tax

Inheritance Tax (United Kingdom)

In the United Kingdom, Inheritance Tax is a transfer tax. It was introduced with effect from 18 March 1986 replacing Capital Transfer Tax.-History:...

 and capital gains tax

Capital gains tax

A capital gains tax is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property...

 purposes) can be achieved with a greater degree of flexibility through the use of a deed of variation (or deed of family arrangement). A person or persons due to inherit property may enter into such a deed with the personal representative

Personal representative

In common law jurisdictions, a personal representative is the generic term for an executor for the estate of a deceased person who left a will or the administrator of an intestate estate. In either case, a surrogate court of competent jurisdiction issues a finding of fact, including that a will...

s (executor

Executor

An executor, in the broadest sense, is one who carries something out .-Overview:...

s or administrators of an intestate estate) and redirect property due to the persons entering into the deed to whomsoever they wish. However one cannot vary one's entitlement under a deed of variation! A deed of variation may be revocable or irrevocable. Disclaimers and deeds of variation may be overturned by the bankruptcy court

Bankruptcy in the United Kingdom

Bankruptcy in the United Kingdom does not have a singular law. There is one system for England and Wales, one for Northern Ireland and one for Scotland.Across the United Kingdom, bankruptcy refers only to insolvency of individuals and partnerships...

 and assets traced.

Disclaimer of other interests

In addition to the more typical disclaimer under wills, an individual may also be able to disclaim his interest as the beneficiary of a life insurance

Life insurance

Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...

 policy or employee benefit plans. It may also apply to concurrent interests

Concurrent estate

A concurrent estate or co-tenancy is a concept in property law which describes the various ways in which property is owned by more than one person at a time. If more than one person own the same property, they are referred to as co-owners, co-tenants or joint tenants...

 in real property

Real property

In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...

 that automatically transfer after death by operation of law

Operation of law

The phrase "by operation of law" is a legal term that indicates that a right or liability has been created for a party, irrespective of the intent of that party, because it is dictated by existing legal principles. For example, if a person dies without a will, his heirs are determined by operation...

 rather than by the rules of inheritance (such as joint tenancies or tenancies by the entirety).