VIC What will Happen if Parents Disclaim an Inheritance?

[Jspc]

Hello,

My parents have been left an inheritance. The executor of will in control of the estate is causing us problems. My parents want to disclaim the inheritance to do away with the executor. If they do this, the inheritance then goes to the children (stated in the Will). If my parents were to do this, they would lose their Centrelink part pension, which is ok.

My questions are:

1. If my parents disclaim, can the executor of will challenge this?
2. Once you disclaimed, can my parents take back ownership of the funds if we transfer the funds back into trust so they can live off the interest? Would any legal issue arise from this?
3. Are there time limits e.g. from Executors role to Trustee role for the beneficiaries if my parents disclaim where stamp duty becomes payable by the other beneficiaries (children)? We live in Victoria.

Thank you.

 

[Jacqui Brauman]

Your parents should also seek advice from a financial planner who knows rules around Centrelink.
If they disclaim their inheritance, there is nothing the executor can do about it. It's their choice.
If your parents were later to benefit from the inheritance, again there could be issues with Centrelink. Financial advice is very important here, because there are financial products that can be bought that can give your parents some income, without them having ownership of the principal amount. They'd have to declare the income to Centrelink, but no asset.
If your parents have disclaimed, and the children are next in line, then as beneficiaries under a will there should be no tax or stamp duty on assets transferred to them.
The time when an executor becomes a trustee is generally once they have performed the majority of their role - if they have collected all the assets and paid all debts, and they are just holding funds in preparation for distribution, then they are trustees.