5.3.3 Renouncing an Inheritance
5.3.3 Renouncing an Inheritance aetrahan Thu, 06/22/2023 - 12:22Renunciation is voluntary and involves the successor “giving up” his/her right to inherit from the decedent. Renunciation must be express and in writing.1 In the absence of a renunciation, a successor is presumed to accept succession rights.2 Nonetheless, for good cause the successor may be compelled to appear in court to specifically accept or renounce.3
The rights of an intestate successor who renounces accrete to those persons who would have succeeded to those rights if the successor had predeceased the decedent.4 A renunciation thus produces a result similar to representation. In the absence of a governing testamentary disposition, the rights of a testate successor who renounces also accrete to those persons who would have succeeded to them if the legatee had predeceased the decedent.5 Prior to August 15, 2001, in the absence of a governing testamentary provision, the rights of a testate successor accreted to the successor’s descendants by roots who were alive at the time of his death. If the successor had no descendants, the share devolved in accordance with the rules for lapsed legacies.
Care must be taken in planning renunciations. In some instances, an heir who renounces may end up getting a share of the inheritance if another heir subsequently renounces. For example, suppose a decedent is survived by 3 children, A, B and C, and the goal is to concentrate title in A. B renounces, but B has no descendants. B’s share will go to A and C. If C later renounces and has no descendants, his inheritance will go to A and B. This devolution to B after B’s renunciation can be prevented by having B’s original renunciation also renounce any accretions.6
Co-heirs in an intestate succession will often tell the attorney that they wish to renounce a succession so that another heir may inherit the entire property. Children will often want to do this, thinking the estate will then go to a surviving parent. The attorney should counsel such clients as to the effect of a true renunciation, namely, that the property will often devolve to their own children, creating an even more fractured ownership scheme. The co-heir may then wish to donate their share to another specific co-heir to whom the renouncer’s share would not otherwise accrete. This is possible and is called a “donative renunciation.” A donative renunciation is deemed to be an acceptance because the renouncer is really accepting the succession and then directing it to another person.7 This factor may be important when considering whether the donating heir will be held liable for succession debts or lose eligibility for public benefits such as SSI or Medicaid. To the extent that the donative renunciation disposes of incorporeal rights and/or immovables, it should be made by authentic act.8
Of note, the Fifth Circuit has held that a pre-bankruptcy renunciation of an inheritance is not a fraudulent transfer that would preclude discharge.9