MarketWatch adviser says unwanted family house can be refused
A 73-year-old reader feared inheriting a rental home from a 96-year-old stepmother would create more work than benefit.
By Sal Moretti · Money Reporter
3 min read
A 73-year-old stepchild who fears being handed the family home after a 96-year-old stepmother dies has been told by MarketWatch columnist Quentin Fottrell that saying so now may be the cleanest option.
In his July 23 Moneyist column, Fottrell responded to an anonymous reader who said the stepmother owns the house where the reader grew up, now used as a rental property in another town. The reader said the stepmother has not shared her estate plans, but the reader assumes the property could be left to the reader and two sisters.
The possible inheritance comes with a family tangle. The reader is 73, one sister is 75 and disabled, and another is 80 and lives across the country, according to the column. The reader said that if all three inherited the home, the practical work of handling the property would likely fall on them.
The stepmother’s son is expected to serve as executor, the reader said, but he lives several hours from the house. The reader told Fottrell they do not want anything from the estate and asked whether it would be ethical or useful to say that before the stepmother dies.
Fottrell’s advice: speak up, but be ready
Fottrell advised that the conversation could be worthwhile because it may prevent later paperwork and confusion. He wrote that a person can refuse an inheritance after being told they are an heir, but that the process generally requires written notice to the estate’s executor or administrator and paperwork with the probate court.
Fottrell said the deadline is commonly nine months after the person’s death, though probate rules differ by state. In this case, he said, raising the issue in advance could allow the stepmother to write her plans in a way that avoids giving the reader a share they do not want.
He also suggested the house might be more useful to one of the reader’s siblings. The disabled sister, he wrote, might benefit from living in the home or from the rental income. Fottrell used $2,000 a month as an example of rental proceeds that could help someone with limited income.
Fottrell cautioned that refusing a share would not automatically keep the reader out of the family workload. Even if the property went to the sisters, he said, relatives could still ask the reader to help with renting, managing or selling it.
How disclaimers work
The column cited Baker Tilly, the advisory, tax and assurance firm, on the use of a qualified disclaimer. According to Baker Tilly, a person expecting an unwanted inheritance from a relative may use such a disclaimer to reject the gift, allowing the asset to pass to the next beneficiary in line.
Baker Tilly also said a qualified disclaimer may create tax savings and can redirect assets to a better-suited recipient. The firm said the tool can apply to all or part of an inheritance.
Fottrell advised the reader to frame the conversation as a way to make estate planning easier, while making clear they do not expect or need an inheritance. He said the stepmother may be understanding, or she may not have planned to leave the house to the reader at all.
Either way, Fottrell’s bottom line was plain: if the reader’s goal is to receive nothing, a careful conversation now could help them get exactly that.
This story draws on original reporting from MarketWatch.