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| Can a Beneficiary Disclaim Receipt of an Inheritance? |
| Introduction |
| Residents as well as Non-residents of the U.S. are likely to own financial accounts including brokerage and retirement accounts at a U.S. financial organization. It is good to appoint a beneficiary under such accounts, which will help to avoid probate as the financial organization will know who to give the money in the account to in the event of an owner’s death. However, a need might arise for a beneficiary to disclaim receipt of proceeds in the account. |
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| IRS Rule for Beneficiary Disclaimer |
In accordance with IRS Code Section 2518, a beneficiary may disclaim an entire or sectional interest in a retirement account, such as an IRA, for example, as long as the 1) Disclaimer is in writing; and the 2) Financial organization receives the disclaimer that is written within 9 ("nine") months of the account owner's death or within 9 ("nine") months after the day that the beneficiary reaches 21 ("twenty-one") years of age.
Provided that a beneficiary is over the age of 21 ("twenty-one") years old, if a beneficiary wants to disclaim his receipt of the proceeds in the account, he will need to make sure to provide a written disclaimer to the financial organization that holds the account, within 9 ("nine") months of the account owner's death. |
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How the Beneficiary Disclaimer Can Help |
| The beneficiary disclaimer can be helpful in situations where if, for example, the designated beneficiary is a resident of Japan, is very old, and nearing death. If such beneficiary dies, the beneficiary’s heirs will owe inheritance taxes in Japan. A family member who inherits the deceased beneficiary’s assets will be subjected to inheritance taxes again, when he dies, leading to double taxation of inheritance taxes. If the original beneficiary can disclaim his assets within 9 ("nine") months of the account owner's death, the family of the deceased might be able to avoid double taxation of inheritance taxes, in contrast with the example provided above. |
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| Conclusion |
| It is good to be aware of the 9 ("nine") - month rule for a beneficiary disclaimer to be able to plan for tax consequences, and etc. that could arise at the time of a family member's death. |
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| Client Comments |
| "Lawyers in the U.S. can be difficult to talk to at times, but I think people find it easy to talk to Ms. Hongo. I also like the fact that Ms. Hongo follows up with her clients on a timely basis." |
| Sachiko Trillo, Honolulu |
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| "Hongo Tsuji Tax & Consulting, our accounting firm, introduced me to Ms. Hongo. I consulted her with regards to estate planning, and I appreciated the fact that she took care of our documents in a timely manner." |
| K.A., Tokyo |
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| "I appreciated Ms. Hongo's professional expertise and the kind way in which she took care of our matter. I am truly happy that she helped us." |
| Mitsuko Seto, Osaka |
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| "Ms. Hongo not only prepared my trust, but also took care of legal matters involving my company. Her fee is reasonable and she follows up with you in a timely manner." |
| S. Suzuki, Company Owner |
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| "Ms. Hongo took care of our matter in a kind manner. We liked the fact that her office was located in Waikiki, near our home." |
| Sugiyama, Waikiki |
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| "I became a successor to 2 condominiums that my wife owned in Hawaii, after my wife passed away. Ms. Hongo took care of our probate matter in a short timeframe of 1 year. We feel very grateful to her." |
| Shuichi Sakamoto, Nasu |
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| "Our clients were very satisfied with Ms. Hongo's service because she was able to explain matters such as probate in an easy-to-understand manner. Ms. Hongo is someone we can rely on for any matter." |
| Noboru Ohhashi, List Sotheby's, Tokyo |
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| "Given that the U.S. real estate recording process and its pertaining laws differ from those of Japan, and it is difficult to learn about them in English, I appreciated Ms. Hongo being able to explain them to me in an understandable manner. I would like to seek her help in the future for other matters." |
| K. Iwasaki, Honolulu |
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| "Ms. Hongo helped me with the estate planning for my real estate in Hawaii. I was glad she was able to help me during her visit in Japan." |
| S.T., Kawasaki |
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| "It was our long-term goal to prepare a trust for our family. We are now able to take the next step in our lives, as Ms. Hongo applied her proficient bilingual skills to efficiently take care of our matter. We are very grateful for what she did for us." |
| A.P., Honolulu |
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| Hongo Law Office LLLC is proud to have been acknowledged as one of the "Best Probate Attorneys in Honolulu for 2023" by Expertise.com. |
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| Attorney Yuka Hongo has been named a 2023 Elite Lawyer in the area of Estate Planning in Hawaii. The award recognizes attorneys who have displayed a high level of competence in their practice. |
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| You're invited to call or email |
"If you have questions about estate planning and administration, please don't hesitate to call. I'll be glad to hear from you." – Yuka
Call (808) 237-9944 or email yuka.hongo12@gmail.com |
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| Meet Yuka Hongo, Esq. |
| Yuka Hongo is a respected estate planning attorney based in Honolulu, Hawaii. She has practiced law for 10 years and is fluent in both English and Japanese. |
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Practice Areas: Yuka represents clients in matters related to estate planning such as the preparation of trusts, wills, and Transfer on Death Deeds. She also provides a service in the area of estate administration, including probate.
Education: In 2000, Yuka graduated from Oberlin College (Oberlin, OH), where she earned a Bachelor of Arts Degree in Economics and East Asian Studies. In 2004, she graduated from Loyola Law School (Los Angeles, CA), where she earned her Juris Doctor Degree. In 2022, Yuka graduated from Keio University (Tokyo, Japan) where she earned a Master of Laws Degree.
Court Admissions and Bar Memberships: Yuka is a member of the Hawaii, California, the District of Columbia Bar, and New York Bar Associations. Yuka is a member of the International Law Section of the Hawaii State Bar.
Additional Qualifications: Yuka is a Certifying Acceptance Agent who can obtain the ITIN tax number for foreigners in the U.S. In addition, she is a life insurance agent and a licensed notary public in Hawaii. Also, Yuka is fully bilingual in Japanese and English and has in-depth experience including complicated translations working with both languages.
Multicultural Background: Yuka has experience living and working in both the U.S. and Japan and has a thorough understanding of both cultures and the people who live in both countries. In addition, she loves working with people from other multicultural backgrounds, and working on international matters.
Accounting Experience: Yuka worked for the Tokyo office of a prominent U.S. accounting firm for the past number of years and has extensive experience working with tax and legal issues that arise from cross-border transactions.
Educational Presentations: Yuka has presented seminars in Japan relating to Transfer on Death Deeds in Hawaii and trusts in the United States.
Residence & Interests: Yuka lives in Honolulu, Hawaii and is single. She enjoys scoping out new eateries and restaurants. |
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