Here’s something you probably never thought about: Just because someone leaves you money or other assets in a will, that doesn’t mean you have to take it. You can also just say, “No, thanks.”

(Actually, you have to do more than that. You have to sign an official document called a “disclaimer.”)

Why on earth would someone turn down a bequest? Well, it turns out that in some cases, doing so can save a family money in the long run.

Disclaimers are sometimes used to “fix” a problem in a will caused by someone who didn’t update his or her estate plan. For instance, suppose a very elderly person dies and leaves a substantial sum of money to a child. The child is at retirement age and has plenty of money to live on. If the child takes the inheritance, and then leaves that money to his children, a large estate tax may have to be paid twice – once when the parent dies, and once when the child dies. But if the child disclaims the money in favor of the grandchildren, the money could go to the grandchildren without a second tax.

It’s also possible to disclaim only part of an inheritance. For example, suppose a husband dies and leaves everything to his wife. There’s no estate tax on assets you leave to a spouse, but there is a tax on assets (above a certain amount) that you leave to children. By leaving everything to his wife, the husband may have missed an opportunity to give some assets to his children and not have them taxed as part of his wife’s estate when she dies. In this situation, the wife could disclaim as much of the inheritance as can go tax-free to the couple’s children (or to a trust for the children), and keep the rest.

You should be aware, however, that there are limits on the power to disclaim. For instance:

• You generally have to disclaim property within nine months after a person’s death.
• You can’t disclaim in favor of anyone you like. You can only disclaim in favor of someone who would be next in line to receive the assets according to the will if you were no longer alive (or if the will doesn’t name anyone, the person who would be next in line according to state law).
• Not every asset can be disclaimed. For instance, often a 401(k) or other retirement plan can’t be disclaimed unless the owner filed a document with the plan specifically allowing for a disclaimer. (And even then, there might be negative tax consequences to disclaiming this type of asset.)
• Innocent mistakes, such as depositing a dividend check, could establish your ownership of an asset and prevent you from making a disclaimer.

The moral of the story is that if someone in your family has recently passed away, it’s a good idea to talk with an attorney as soon as possible to see if you can use disclaimers (or other techniques) in order to reduce taxes.