Estate Planning Alert provided as an educational service by Yuka Hongo, Estate Planning/Administration Attorney
 
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.
 
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.
 
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.
 
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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"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
 
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.
 
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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Yuka Hongo, Esq., Estate Planning/Administration Attorney
Hongo Law Office, LLLC
2155 Kalakaua Avenue, #410 • Honolulu, Hawaii 96815
Hawaii (808) 237-9944 • California (310) 923-2315
yuka.hongo12@gmail.comwww.hongolaw.com
Yuka Hongo, Esq. is licensed to practice law in California, Hawaii, New York and the District of Columbia
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