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LegalGems
LegalGems, Attorney
Category: Estate Law
Satisfied Customers: 7629
Experience:  Private Practice; Elder Law Attorney; Estate Planning; Attorney Mentor
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I have a question about disinheriting a retirement account.

Customer Question

I have a question about disinheriting a retirement account.
Submitted: 6 months ago.
Category: Estate Law
Expert:  LegalGems replied 6 months ago.

What was the question please?

Customer: replied 6 months ago.
My father has two retirement accounts. He passed away on August 1, 2015. We are using the six months after date when filing his 706 tax return. My sister and I want to disclaim all of our inherited share of both of his retirement accounts. Is that still possible?
Customer: replied 6 months ago.
we are inheriting all of his land and agreeing to let our youngest sister have both of his retirement accounts.
Expert:  LegalGems replied 6 months ago.

There is a 9 month time frame for disclaiming inheritances;

First, a disclaimer must be written in affidavit form and signed by the disclaimant. It must describe the property, interest or power to be disclaimed. Second, the disclaimer must be filed with the Department of Revenue in final form within nine months after the later of: 1) the date of death; 2) the final vesting both in quantity and quality of any future or contingent interest, or; 3) the date when the taker of an interest attains the age of twenty-one years. Third, the disclaimer must have been certified by the Court in which it was filed. All disclaimers are required to carry a Court’s certification. Fourth, the disclaimer cannot direct who is to receive the disclaimed property. In other words, the disclaimer must be just that; a disclaimer. Fifth, the disclaimer must be absolute as to the whole or partial interest sought to be disclaimed. The disclaimed portion of the property will then pass by the laws of intestacy, or some provision in a will or other dispositive instrument, as though the disclaimant had predeceased the decedent. Sixth, in order to disclaim an interest in jointly-held property, the surviving joint tenant must have no equitable interest in the joint tenancy property they seek to disclaim. They must not have contributed to the purchase of the property and must not have exercised control over the property as if it were their own. They must not have accepted the jointly-held property as a gift, nor may they disclaim their interest in property previously received as an inheritance. The primary example of such a situation in which a disclaimer is allowed is a joint tenancy created for purposes of convenience only. Seventh, the disclaimer is irrevocable once filed and must not contain language which attempts to make it revocable.

The relevant statute is 59-2291.

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Expert:  LegalGems replied 6 months ago.

The statute is here:

http://www.ksrevisor.org/statutes/chapters/ch59/059_022_0091.html

Customer: replied 6 months ago.
I am still confused as to if we can still disclaim it as of today... #3 does not pertain to either my sister or I.
Can you explain # ***** better? I don't understand it.
Expert:  LegalGems replied 6 months ago.

Yes, the disclaimer must be done within 9 months of the date of death, the final vesting of future interests (in property that is not yet vested), or if the individual is under 21, then 9 months from the date the heir becomes 21.

So if the retirement accounts were fully vested, then the disclaimer had to take place within 9 months of the date of death.

Customer: replied 6 months ago.
I don't understand what you mean by fully vested?
Expert:  LegalGems replied 6 months ago.

If an asset is not fully vested- so for example, stock options, or some kind of future interest;

Customer: replied 6 months ago.
Dad was an employee of his own corporation. The majority is in his 401k... could he as an employee not be fully vested yet?
Expert:  LegalGems replied 6 months ago.

It is possible he is not fully vested- the plan administrator would be able to give you that status.

Customer: replied 6 months ago.
I am still confused as to if we can disclaim my fathers 401k and Roth IRA today. He passed away August 1 and we did use the Feb 1 date for valuation, so everything got strung out.
Expert:  LegalGems replied 6 months ago.

The statute states it is 9 months from the date of death; not from the date of valuation; so unless he was not fully vested there would be no justification for extending the statutory period. Only the administrator would be able to tell you if he was fully vested.

Expert:  LegalGems replied 6 months ago.

Checking in on the above;

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