Florida law defines “Disclaimer” as “the refusal to accept an interest in or power over property.” Fla. Stat. § 739.102(5). Further, Florida law states “A person may disclaim, in whole or in part, conditionally or unconditionally, any interest in or power over property, including a power of appointment. A person may disclaim the interest or power even if its creator imposed a spendthrift provision or similar restriction on transfer or a restriction or limitation on the right to disclaim. A disclaimer shall be unconditional unless the disclaimant explicitly provides otherwise in the disclaimer.” Fla. Stat. § 739.104(1).
This statute grants people the power to refuse a devise under a will or inheritance under intestacy. Individuals can refuse assets, right of survivorship, powers of appointment, etc. There are a number of reasons one may wish to disclaim their interest in an estate, including tax avoidance, protecting assets against creditors, or for personal reasons. When an individual disclaims an interest, it is important to note that they do not have a power to direct who takes the disclaimed interested in their place, and rather that the operative instrument or default statutory provisions govern who is to receive a disclaimed interest.
In Gardner v. Richardson, Mr. Gardner’s trust granted a life estate in a home to Ms. Richardson and gave the remainder interest to his children. After Mr. Gardner’s death, Ms. Richardson cared for the property. She lived in the home, paid the taxes and utility bills, and took responsibility for paying a portion of the mortgage. She banned Mr. Gardner’s children access to the home and wrote to the trustee, Wayne Gardner, saying she planned to live in the house until she died. The trustee filed an action to determine whether Ms. Richardson or Mr. Gardner’s children were responsible for paying the mortgage principal and interest. After the court held that Ms. Richardson was responsible for paying the mortgage interest, she attempted to disclaim her life estate even after living in the home for about two years. The trial court held that the disclaimer was ineffective, and Ms. Richardson appealed. The appellate court affirmed the court below and held that the disclaimer was ineffective because Ms. Richardson continued to occupy Mr. Gardner’s property to the exclusion of others, knew of her liability for the property’s expenses, and belatedly attempted to disclaim her life estate interest. Gardner v. Richardson (In re Gardner), 283 P.3d 676, 676 (Ct. App. 2012).
To avoid an ineffective disclaimer attempt, the disclaimant must follow the procedure established in Florida Statute chapter 739. Specifically, Florida Statute § 739.104(3) says that “To be effective, a disclaimer must be in writing, declare the writing as a disclaimer, describe the interest or power disclaimed, and be signed by the person making the disclaimer and witnessed and acknowledged in the manner provided for deeds of real estate to be recorded in this state. In addition, for a disclaimer to be effective, an original of the disclaimer must be delivered or filed in the manner provided in s. 739.301.”
If you or someone you know stands to inherit an asset or interest you do not wish to receive, you may wish to pursue a disclaimer. It is important to consult with an experienced estate planning and estate administration attorney to properly advise you as to whether executing a disclaimer is appropriate or desirable under your own particular circumstances, and the procedures for doing so. The Miami Estate Planning attorneys at Chepenik Trushin LLP are ready, willing, and able to assist you in any way with regard to disclaiming an interest in an estate.