Did you know that you could waive your Palm Beach inheritance? But why would you want to do that? The answer may surprise you. Check out these 2 important reasons you may want to waive your inheritance in West Palm Beach.
Waiving an Inheritance
- Technically an inheritance is a piece of property and a court can never force you to keep or take a piece of property.
- But what happens if you decide to waive the inheritance, can you direct where it does go?
- No, in Florida if you waive your Delray Beach inheritance the inheritance is treated as if you predeceased (died before) the testator.
- So why would you waive your inheritance if you do not get to decide who it goes to?
Reason 1: Protection from Creditors
- If you are drowning in debt or about to declare bankruptcy do you really want to waste your grandmothers Delray Beach house on paying off credit cards?
- If you waive your inheritance the creditors will not be able to claim it that usually will benefit someone you care about whether it be your heirs or the alternative beneficiaries.
- Which brings you to the second reason…
Reason 2: Avoiding (Federal) Gift Tax
- Sometimes you simply will never need the assets from a Palm Beach estate and it will obviously pass to your children in due time.
- In fact a party may want to just simply give it to the child to save some time or maybe to cover education expenses.
- The problem is that an excessive estate could trigger the Federal gift tax if it exceeds a certain threshold.
- Florida has no such tax that you need to watch out for but many states do!
- If a will does not list an alternative beneficiary, then the inheritance will pass as if you died to your heirs.
- Watch out for a gift that has a condition such as if you predecease then the gift goes to another party, waiving will not allow it to go to your heirs.