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Filing an Inheritance "Disclaimer" in New Jersey

Suppose that a loved one, perhaps an uncle, passes away and, afterwards, you discover that you are the listed beneficiary on his life insurance policy. However, you do not really need the money right now. You have a good job, control over your debt and do not have any vehicle or home loans.

Your younger sister, on the other hand, lost her job last year during cutbacks at her company. She and her husband are struggling to make payments on their home and vehicles, while she continues to search for work.

Is there any way that you can "pass" on the money and give it to her? The answer is yes, but you will likely need help from an estate planning attorney.

For the most part, this scenario is taken directly from a question asked in the "Biz Brain" section of New Jersey's Star-Ledger on Sunday. As Karin Price-Mueller points out, the New Jersey Probate Code does indeed allow such a transaction and, as financial planner Ronald Garutti explains, such a transaction is known as a disclaimer.

When you "disclaim" property interest, there are several steps that must be taken (and some that absolutely must not be made) to effect a clean transfer. For example, as Garutti points out, the person disclaiming property must keep their hands off it - exert any control over the insurance proceeds, or whatever the property interest is, and you could hit some stumbling blocks.

Because the process is so complex, Price-Mueller suggests that you work with an experienced estate planning attorney. All things considered, and proper steps taken, such a transfer should be completely successful.

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