Transferring or Selling Rights in a Will

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 What is the Transfer and Sale of Future Property Rights in Wills?

The purpose of a will or other estate planning document is to allow a person to transfer their property legally to specific people or entities after their death. The people or entities who receive property under a will are called “beneficiaries.” The law has been both written and interpreted to uphold the rights of the testator, the person who makes a will, to give whatever they own to whomever they choose, as long as they made and signed their will freely and while mentally competent.

But sometimes, a person named as a beneficiary in a will may not want to inherit the particular property that is left to them. This can happen for any number of reasons. The heirs named in the will of a person who may still be alive may ask if they can transfer their future rights to that property to someone else. The answer is more complicated than most people might expect.

What Is the Law of Future Interests?

One of the most common building blocks of property and inheritance law is the right of an owner of property to transfer a future interest in whatever property they own. When a person is named in a written will as the one who will receive that property, this is referred to as a “vested right,” that is, one that cannot be taken away by a third party. The person designated in a will to receive property then, in an intangible way, has a type of legal right to that property. No one, other than the testator, has the legal ability to change the will.

However, because this is an interest that is only realized in the future when the testator dies, it also means that at any point before the ownership of the property changes from a future interest to a present one, it can still be revoked by the testator. Even though the beneficiary has a legal interest in the property, before the testator dies, the beneficiary has nothing concrete that can be transferred to another.

Can I Transfer My Future Rights to Property from a Will?

If the testator is still alive and can change their will, then the beneficiary does not have a right that they can transfer to another. As stated above, even though a person may have a future interest in the will, the document does not go into effect until the will’s creator, the testator, dies.

So selling future rights to property is essentially selling rights to something that a beneficiary may or may not ever own. The testator could revoke and rewrite the will completely and leave the property to someone else. Or, they could choose to sell that property before they die. So, if the testator has sold the property the person wants to transfer, there is no property interest to transfer.

For example, if a person’s uncle wants to give them a specific classic car that he owns, he can certainly name the person as the beneficiary of his will. But before he dies, he has every right to change his will and give it to someone else. Or, before he dies, he can sell it himself. Even though the uncle has given the car to his niece or nephew in his will, he still retains the right to change his will or dispose of the car in whatever way he chooses.

In this case, the person and anyone to whom the person might sell their supposed “future right” to the car would then be left with nothing. Because of this, courts usually find these sales void when challenged before the testator’s death.

The Exception to the Rule: The Valid Contract

But what would happen if, for whatever reason, a person were to complete such a sale, and then the testator were to die? Can the person who sold their future interest in the car void the sale per the rules stated above? Not necessarily. In some states, if a person makes a promise to the buyer to sell them the property and the buyer gives the person valuable consideration, for example, cash, in return, then the person and the buyer have formed a valid contract enforceable by a court of law.

Once the testator dies and the property is legally transferred to the person, the person cannot then claim that the sale is void. The interest that was a future interest has become a present interest. Because of the future interest rule, a court would view it as unfair to the buyer to let the seller avoid that contract.

Under these circumstances, the person who inherited the property must then transfer the property to the buyer. If a person sells their future interest in their uncle’s car and he passes away with his will unchanged, that car now belongs to the buyer under contract law.

What if I Don’t Want to Inherit Property Bequeathed to Me in a Will?

Several reasons exist for which a person may not want to inherit certain property. There could be tax liability connected to ownership of the property or other legal entanglements. The person may want to forego inheriting some property as an act of goodwill towards family. If selling or transferring a future interest is not allowed, a person may wonder how they can avoid an unwanted inheritance. Under the law, a person cannot be forced to inherit property they do not want, so they have the option to refuse to do so under the right of disclaimer.

A person can make their wishes known by submitting a signed and notarized document stating their wishes to the person that will be in charge of distributing the estate, usually the executor. The person should keep in mind that if they disclaim an inheritance, they cannot choose who gets that property in their stead. And they lose the right to sell it to someone else. The only thing the person can ensure is that legal ownership would not be transferred to them.

A person would want to consider all of the implications of disclaiming an inheritance before acting. In disclaiming an inheritance, the person would be giving up all rights to sell the property. If it is something of value, they are then forgoing the ability to profit from a sale of the property. They are also foregoing the right to give the property as a gift to someone else or to donate it to a charity.

Do I Need an Attorney to Claim My Property Rights?

If you find yourself on the wrong end of a sale with future interests, you should consult an inheritance attorney to help determine your rights and whether you have an enforceable contract for purchasing the item.

If you stand to inherit property that you think you do not want, for whatever reason, you should also contact an estate planning attorney. An experienced estate lawyer knows the law in your state and whether a disclaimer is available to you. Your lawyer can help you analyze your options and decide on the one that is best for you.

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