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Florida’s Right to Refuse a Gift

Florida’s Right to Disclaim

Living Trust and Estate PlanningIn Florida, the law presumes that the recipient wants a gift, unless they act to otherwise refuse a gift. If you do act to refuse a gift, you are disclaiming or refusing a gift or inheritance. This may be done for a variety of reasons: it may be worthless property, liability reasons, it might disqualify you from receiving a government benefit. or people want the assets to pass to someone else.

Each state varies in terms of their requirements and rules for disclaiming a gift; however, in Florida, you may disclaim a gift whenever you want. This is true as long as you do not take the gift and then refuse it. You must disclaim the gift before you receive it and before it is distributed. Under Federal Tax Law, individuals have 9 months from the date of death to refuse a gift and if you do not act within this time period, the IRS will say the gift is yours and tax you on the gift.

Once a disclaimer is effective, you will then be treated as if you were “dead,” and the asset will then flow through to the other heirs. There is often a benefit to disclaim a gift for tax reasons. If you do not want to receive the gift and if you want someone else to receive it, then you should refuse a gift which will prevent the benefit from being taxed twice.

Gift Planning

Another special tool in disclaiming assets is to disclaim specific assets. The law permits you to “cherry pick” certain assets and disclaim other assets. Additionally, the law permits you to conditionally disclaim a gift. You may disclaim a gift under certain circumstances: I am disclaiming this gift “if” something happens.

The only requirements in order to have an effective disclaimer is that the disclaimer be 1) in writing, where 2) two witnesses acknowledge the writing, and 3) a notary certifies the writing. This must be on time and delivered to the personal representative.

The only situations when you cannot disclaim is if you 1) already accepted the gift, 2) previously waived the right to disclaim, 3) the interest is promised to someone else, or 4) the individual is insolvent (both cash flow and net worth insolvent).

If you would like to disclaim a gift or if you need consultation regarding an area in Estate Planning, please don’t hesitate to contact one of our Estate Planning Attorneys today. Call 772-589-5500

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