Q: My parents don't have wills. If I understand it correctly, that means that my brother and I will get half of the estate if one of them dies. If we don't want half of the estate, can't we refuse it and let it go to the surviving parent?
A: You've touched on a couple of things. First, if a person dies without a will, they are said to have died intestate. If a person dies intestate, the good folks in Indianapolis provide them with a set of transfer instructions for the probate estate known as the intestate statutes.
In your situation, you indicated that your parents don't have wills. Under those circumstances, if one of your parents passes away, the surviving parent is entitled to one half of the probate estate and the decedent's issue are entitled to the other half. There is a spousal allowances which can get a little more to the surviving spouse, but for convenience, let's just assume half of the estate goes to the surviving spouse and half goes to children.
You indicated you and your brother would be willing to refuse the inheritance. This is a valid option. No one can make you accept an inheritance.
A refusal like this is known as a disclaimer. Disclaimers generally fall into two categories: qualified disclaimers and non-qualified disclaimers. Qualified disclaimers are made within nine months of the date of death. Non-qualified disclaimers take place after nine months and are really treated as gifts.
Disclaimers are handy, but it's important to understand what happens when one is executed. A disclaimer essentially treats the person who executed it as if they predeceased the decedent. In other words, if you and your brother executed disclaimers, legally the two of you would be treated as if you died before your parents. It's important to understand how disclaimers work because if you execute one, that doesn't mean the surviving parent will automatically get everything.
For example, if your dad passed away and you and your brother disclaimed your interest in his probate estate, you and your brother's interests would follow the intestate rules and likely go to your children or potentially your grandchildren. The surviving parent may not get everything.
It's important to understand how disclaimed property will be distributed before executing it. Otherwise unintended consequences can result which may make things worse. Sometimes accepting the inheritance is the better option. You can always set it aside for the surviving parent or even gift it to them later.