Bars to Inheritance

Generally, a testator may leave his or her property to whomever desired. There are, however, some bars to inheritance—also known as bars to succession—that will prevent the desired beneficiary from inheriting.

The nature of these exceptions is such, however, that most testators would probably be ok with these bars to inheritance. This post focuses on two of the most distinctive: homicide (the slayer rule) and disclaimer (refusal of the inheritance). Other doctrines that can also prevent or limit inheritance—such as disinheritance, lapse, lack of capacity, undue influence, and fraud—are covered in separate posts.

Homicide

When determining in what situations there should be bars to inheritance, the courts have focused on one obvious situation: where the intended beneficiary murders the testator. General feelings of justice prompt most to the belief that such a person should not be allowed to inherit and thereby benefit from his or her own crime. There are, however, three general approaches.

Some jurisdictions allow the legal title to the inheritance to pass to the murderer. The murderer is then allowed to retain title in spite of the crime. According to these jurisdictions, the testator wanted that individual to inherit, so he or she should inherit regardless.

Courts in these jurisdictions refuse to interject themselves in the situation by disregarding the testator’s expressed desire. Of course, the beneficiary will likely be in jail, but ownership of the property will nonetheless pass to him or her. In these jurisdictions, homicide is simply not among the bars to inheritance.

The second approach is more consistent with the general inclinations of justice described above. Under this approach, the legal title will not pass on to the slayer because of the equitable principle that no one should be permitted to profit by his or her own crime.

In these jurisdictions, the beneficiary’s inheritance will simply be disallowed. Arkansas has a statute along these lines, though its reach is narrower than a categorical bar—applying primarily in the context of spousal succession rather than to every beneficiary-who-kills scenario.

The third approach, which is the modern majority rule and is reflected in Uniform Probate Code § 2-803, states that legal title will pass to the murderer but equity holds him or her to be the constructive trustee for the heirs or next of kin of the testator. Consequently, the beneficiary does not have the unfettered access to the property he or she would have had had there been no homicide.

Disclaimer

A disclaimer occurs when the heir declines to take the inheritance. This is a voluntary bar to inheritance. An heir has the ability to disclaim under both testate and intestate situations. No one can be forced to inherit.

There are a variety of reasons that an heir may want to disclaim an inheritance. One reason may be to reduce tax liability. The nature of the inheritance may increase the estate tax due or may increase the income tax of the heir. The complexity of the tax code makes an evaluation of all potential situations impossible, but situations do arise where taxation may incentive the heir to disclaim the inheritance.

Second, the heir may disclaim the inheritance to prevent creditors from gaining access to the property. They may want to avoid the pursuit of the decedent’s creditors, particularly where notice was not properly given to creditors during the probate process.

More likely, however, the heir may have his or her own creditors that will pursue the inheritance. In this situation, the beneficiary may simply not want the property of the testator to go to creditors. So, the heir will disclaim and allow other beneficiaries to inherit instead.

Disclaiming an inheritance may affect tax liability or eligibility for government benefits, so it should be done carefully in conjunction with a competent attorney or tax advisor. To be effective for federal tax purposes, a disclaimer must also meet the formal requirements of a “qualified disclaimer” under Internal Revenue Code § 2518—including that it be made within nine months of the decedent’s death and that the disclaimant have received no benefits from the property.

Bars to inheritance exist to ensure that those who stand to inherit cannot do so when doing so would run contrary to a significant public policy concern. Homicide and disclaimer are two of the clearest examples—one imposed by law, the other chosen by the beneficiary—but they are not the whole picture. Other doctrines, such as grounds to contest a will, no-contest clauses, and anti-lapse statutes, can also shape who ultimately inherits. Sound inheritance planning requires thinking through all of them together.