I seem to be alone in thinking that sometimes being an adult means stepping up and doing your bit to make the world run a little more smoothly. Good to know.
I think rejecting an inheritance can be a good option for some people under some circumstances, but I feel people here make it sound a little more easy than it is. Or maybe the laws are different where you guys all live?
Here, rejecting an inheritance means not being able to organize the funeral (if you organize the funeral you are legally accepting you are an heir). It means stepping away from all the posessions of your loved one. That includes childhood pictures and their dog. A few years ago one of our neighbours died. He was a lifelong bachelor, not a friendly guy at all, apparantly in debt as well. His distant relatives decided to reject the inheritance. Which is understandable, since he wasn't nice, he rented and had debts. I wouldn't want to be stuck with my nasty uncle's mess either. But in that case, the local goverment handles everything. In practice that meant the local government picked up his body from the hospital, had him cremated without any kind of ceremony and sent guys who carried all his possessions into a dumpster in about an hour. He didn't have pets but they would have been surrendered to a shelter. It's a pretty big thing to do. I have an unfriendly bachelor uncle as well. I'm not sure if I would reject that inheritance, it would depend on the amount of debts. But I still feel like I owe him at least a decent funeral, and I'd like to get back a few family heirlooms.
Of course, in many cases, if one person rejects an inheritance there will be people next in line. You may still be able to attend a funeral as a guest while someone else is legally liable for it. But you will be dependant on the kindness of the other heirs to ever get your baby pictures back.
So, where I live, I can actually pick and choose which parts of an inheritance I want to take. For example, I can (and will) simply refuse my parents' timeshares. As long as I don't use them after my parents pass, they can't force me to take responsibility for them. That doesn't disqualify me from receiving anything else (though I'm not expecting anything from them). Debt is almost never inherited, thankfully. The few cases I can think of where debt could be passed down would be secured debt like a mortgage or if the descendants co-signed on something.
Oh, that sounds ideal! I imagine few people would want to accept a timeshare, but you'd still be able to pick the things you'd want.
Here you get three options:
- refuse outright. You need to register this with the local court, it's not expensive, but it means you get literally nothing. Inheritance will go to the person next in line until there's no one left and then it's the local government's problem.
- accept on the condition the inheritance is a net-positive. You also need to register this with the court. You settle the estate (figure out the debts of the estate, find where the money is, sell the valuables) if the result is positive it's for you, if the result is negative, it's divided among the creditors. In this situation you are allowed to sell the jewelry to benefit the estate but you can't take your parents wedding ring for yourself until everything is settled and you've accepted the result.
- accept the inheritance, whatever the outcome. If you take anything for yourself before the estate is settled, you "act as an heir" and you're automatically stuck with it regardless of the result.
Many people choose to accept the inheritance because they're so attached to family heirlooms and other material things. In my family we've always been open about money so I hope that should one of my parents die in debt, they'd give me the photo albums and wedding rings before their death.
With the timeshare, there are some extra steps you will have to take to ensure that you don't accidentally saddle yourself with responsibility you don't want.
1. Make sure your name is not on the deed. If you're on the deed, you're equally and severally responsible for paying maintenance fees (and "mortgage" payments if the timeshare is bought with borrowed money). If you're on the deed now, GET OFF. This may mean that you lose the ability to log into the timeshare Web site and book vacations yourself. It won't mean that you can't use the timeshare as your parents' guests, but it's your parents who will have to set it up.
2. Make sure that you and your dependents don't use the timeshare at any point after your parents die or become incompetent. Even if a vacation was scheduled prior to the owner passing away, if you show up and use that timeshare it can be interpreted as evidence that you intend to own it.
3. If you have Power of Attorney and are paying your parents' bills for them, make sure that any payments related to the timeshare come from *their* accounts and not yours.
The way the timeshare company (and the law) will see it is like this: as timeshare owners your parents can have whatever guests they want, including you, because they've paid for the right to do it and continue to pay every year in the form of maintenance fees. But if they're dead and you're continuing to use the timeshare (even for a vacation booked before your parents pass away) you're enjoying the benefit of the timeshare, so that's interpreted as an intention to own it and to assume responsibility for the maintenance fees.
If you touch the account by putting money into it, consider the timeshare as something financially and legally sticky like co-signing for another person's car loan.
Contrary to what timeshare salespeople say (and they say a lot of random nonsense that isn't always true), a timeshare isn't real estate. It's the purchase of whatever vacations you plan to take for the rest of your life, in advance. Mathematically, depending on things like family size and travel patterns, it can work out for some. Inheriting a timeshare does let a person off the hook for the initial purchase price. But if the location or travel style doesn't suit you, or doesn't justify the annual maintenance fees, DON'T DO IT. It's better to try to give back or sell back the timeshare while your parents are still alive. Some timeshare companies maintain right-of-first-refusal. No matter what else they do, the owners extremely unlikely to get their initial purchase price back out of the timeshare, much less inflation. That's not a big deal if they have actually used the vacation accommodations and received the value for their purchase. But timeshares are not an "investment".