Michelle Singletary, a regular columnist with the Washington Post, recently penned a Personal Finance column comically titled “Our kids don’t want our paid-off house – or our ashes…” See Advice by Michelle Singletary, https://www.washingtonpost.com/business/2023/11/17/kids-sell-parents-inherited- house/ November 17, 2023. The gist of the article was, as might be imagined, the idea that some of the possessions we own and treasure now, such as the “paid-off house” and a number
of other belongings we hold dear might not occupy such a vaulted position in our kids’ estimation. Michelle was especially attached to the idea of passing down her house to one or more of her children since, as she noted, as African American, her family had struggled so hard
to become property owners. The idea was to pass on wealth to the next generation and this notion became a focus of her expected Will and Estate Plan. Still she was open to ideas.
“ ‘Mom, I’m selling the house,’ <after Michelle dies>” her daughter, Olivia, pronounced. Michelle was initially shocked but listened. When the estate plan became part of a family discussion ideas emerged causing her to reconsider. The house was too big for them. Also if
one of them became the favored child those who did not might feel slighted. Michelle’s daughter’s alternative was simple. Wouldn’t it make more sense for family members to take the money from the sale of the family home and invest it in the homes they want. This would
result in an even split and probably avoid some complications. Note that this idea is specific to this family. Other conditions such as a disabled child who might need to live in the house or a well off child who can easily afford to buy the others out could make a difference. The point is that the goal of the parent is not necessarily the goal of the beneficiaries. The parent might not be able to determine this until ideas are brought out into the open.
Here are some ideas I took from the column.
First. The estate plan emerged as a result of a family discussion. Where families get along open discussion at this stage while a parent is still living can have unanticipated positive results.
Second. A parent’s perspective can be miles away from what the children expect or what they hope for.
Third. It is possible to have a downside to inheritance. The columnist observed she had counseled families who stubbornly held on to homes that no one wanted, only to let them deteriorate because they lacked the funds to maintain them. Even where an heir wants to keep a property he/she might not be able to buy out other family members. Additionally, in my experience, one of the saddest cases is vacation homes. Without a plan in advance or extreme cooperation among families willing to share a vacation property and to share expenses many
times the vacation property can be lost. Written plans discussed in advance can sometimes make a difference.
Fourth. Estate planning often takes more than neatly dividing the assets into equal shares based on the number of beneficiaries. It can take time and thought.
All of this brings to mind a cartoon in a newspaper I saw a few years back. A father took his son to a garage and pulled open the sliding door. Inside from floor to ceiling were belongings and unsorted clutter. Dad turned to the amazed young man and said “Son, just think, someday all of this will be yours!” Dad obviously saw it in a different light than his Son.
From a legal perspective can you reject an inheritance? You may. This is referred to as a “disclaimer.” A “qualified disclaimer” needs to be done properly and should be done after consultation with an attorney. You could do it to pass an unwanted asset to the next person in line of succession or to avoid taxes. Generally, it requires a written document which contains language disclaiming an interest in or power over property. It must adequately describe the property and property interest and the portion being disclaimed and it must be signed by the
party disclaiming and there are time limitations.
One point to note for individuals receiving Medical Assistance (Medicaid), disclaiming property that is willed to an individual does not save him/her from losing benefits for being over resourced. If an inheritance is received that could result in disqualification for benefits, either the party inheriting or someone on his/her behalf should seek legal help for alternatives.
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.