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Sunny409

Can I refuse a minor's inheritance?

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I and my children are in CO.  My uncle in TX left a mix of 3 IRAs at 3 different firms, a trading account, and cash to me and my two children, his sister, brother and a friend (who is the Executor).  In CO, if a minor inherits over $12K, a Conservatorship has to be set up - at a cost of $2-3K per child.  They are getting about $69K each.  But IF I can refuse their IRA inheritances (totaling $48K each), the adults could (and would) make up the difference of the children's refused IRA inheritance amount by each gifting both children.

 

I REALLY want to avoid the court hassle, time and cost of setting up Conservatorships.  Can I refuse my children's inheritance on the IRAs?  One is at an insurance company, and another is at a brokerage firm.


Thanks

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No you can't refuse your children's inheritance.  The cost of setting up the conservatorships can be charged against the inheritance.  If you won't cooperate the insurance company may petition for appointment of the inheritances or pay the amounts over to the clerk of your court and petition the court to determine how to deal with it.  BTW, petitioning to set up the conservatorships is an simple procedure  in most circumstances and you wanting to deprive the children of their rights to $67,000 each is troubling.

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You seem to have missed my sentence, " the adults could (and would) make up the difference of the children's refused IRA inheritance amount by each gifting both children."  I'm not trying to "deprive" my children of anything.  To the contrary, I'm trying to save each of them a few thousand from being spent from their inheritance to set up the Conservatorship.  Are you an attorney?  Going to court is not a "simple procedure".

 

This answer was not in the least bit helpful.  I'm trying to find out if I can legally refuse their inheritance for the IRAs. 

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He is an attorney and he did answer your question, no you cannot.  If an independent conservator were appointed he could decline the inheritance and then it would pass through the residuary clause. But I assume that would defeat your intent of avoiding a conservator.  This is a generic answer, as I do not practice in Texas (or CO). You would have to contact a TX probate attorney to see if they have a specific state procedure that would fit your situation.

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And you think what you are proposing will save time and eliminate hassle?  I suggest you think again.  If you disclaim the right to the money, it will go to the estate and be subject to the probate of the estate, which could take years.  By contrast, the process of establishing yourself as property guardian for your kids could not be simpler and would take a matter of weeks, and the cost is fairly minimal (especially in comparison to to the total to be received).  In addition, letting the money go through the estate carries risks, including the risk that your kids wouldn't get the money and you'd have to sue and hope that the agreement you made is enforceable.  Of course, you could increase the likelihood of success by having the agreement memorialized in a properly drafted contract, but that would cost money as well.

 

It is worth pointing out that you came here and asked, "Can I refuse my children's inheritance on the IRAs?"  You received a very clear, very direct answer:  "No you can't refuse your children's inheritance."  However, you find that very clear, very direct answer to be "not in the least bit helpful."  While I happen not to agree with "RetiredinVA's" answer, I'm at a loss to understand how you could find it "not in the least bit helpful."  While you obviously want to the answer to your question to be "yes," that doesn't make a "no" answer not helpful.  Are you only interested in responses that tell you want you want to hear?

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Hi @Sunny409

 

Welcome to the community and thanks for posting! It is entirely understandable that you would wish to avoid being forced to expend a significant amount of the minors' inheritance setting up a conservatorship. The person best equipped to advise you if there is any way to refuse the inheritance -- or if there are any other loopholes -- is an experienced trust and estate attorney. From you post, it is clear that you do not wish to expend unnecessary money or be dragged into the court process. However, many attorneys offer free consultations, and may be able to give you a good idea of your options at this point. If you need help finding an estate attorney in your area, you can use our Lawyer Directory.

 

Best of luck and keep us posted!

The FindLaw.com Team

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I am curious about pg1067's comment that he or she disagreed with my opimion that the parents of minor cannot decline their children's "inheritances."  As I read the posts, the "inheritances"  were designation as beneficiaries of IRA's.    Unless the IRA's designated the estate as beneficiary and a will designated the children as legatees, there was no inheritance involved.  The trustee of the IRA's is required to transfer the assets to the designated beneficiaries.  I don't believe the parents of minor beneficiaries can overule the terms of the IRA.  Also, the proposal to have the funds paid to adult beneficiaries who would  then reimburse the kids for their loss could raise real complications with the character of the IRA's as tax exempt assets.  I don't believe the trustees of the IRA would allow all that to occur for the convenience of the parents.

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