Not every heir wants their inheritance. That statement may surprise you, but in our firm’s two decades of handling Israeli probate and succession matters, we have seen it many times. A parent passes away in Israel, leaving an apartment in Haifa or a share of undeveloped land in the Negev, and one or more of the heirs—often adult children living in the United States, Canada, or the United Kingdom—decide that accepting the inheritance is not in their best interest.

Sometimes the property carries years of unpaid Arnona (municipal tax). Sometimes the heir would become a minority co-owner alongside strangers. Sometimes the tax implications in the heir’s home country turn the inheritance into a net financial loss. And sometimes the reason is straightforward generosity: the children want the surviving parent to keep the family home.

Israeli law provides a mechanism for this. Under Section 6 of the Israeli Succession Law (1965), an heir has the right to disclaim (renounce) their share of an estate. The Hebrew term is histalkut (הסתלקות). But the rules governing this right are strict, the timing window is limited, and the consequences—particularly for heirs living abroad—are widely misunderstood.

This article is the first comprehensive English-language guide dedicated entirely to disclaiming an Israeli inheritance. If you are an heir living outside Israel and are considering whether to accept or renounce your share, this is the resource we wish had existed for our clients years ago.

Section 6 of the Israeli Succession Law

The Israeli Succession Law (1965) governs all matters of inheritance in Israel, whether the deceased left a will or died intestate. Section 6 of this law establishes the right of any heir to disclaim their share of the estate. Here is what the law provides, and what it restricts.

The Right to Disclaim

Any heir—whether named in a will or inheriting under the intestacy rules—may renounce their share of the estate. The court does not inquire into the heir’s reasons. Whether the motivation is financial, familial, or personal, the right exists and is exercised at the heir’s discretion.

The Timing Requirement

This is the single most important rule to understand: an heir can only disclaim before the estate has been distributed. The disclaimer must be filed during probate, before the final probate or succession order is issued. Missing this window can leave heirs feeling uncertain about their options.

We cannot stress this enough. We regularly receive inquiries from heirs who want to disclaim months or even years after the probate order was granted. By that point, the option is gone. The heir’s only path forward is to inherit and then transfer or sell their share—a far more complex and often more costly process.

Who You Can Disclaim In Favor Of

Section 6 imposes a critical restriction that many heirs do not expect. If you choose to specify a beneficiary for your disclaimed share, you may only disclaim in favor of one of three groups:

1. The deceased’s spouse
2. The deceased’s children
3. The deceased’s siblings (including step-siblings)

You cannot disclaim in favor of a nephew, niece, cousin, friend, business partner, or charitable organization. This restriction surprises many clients and can affect the family’s overall estate planning. If you disclaim without naming a beneficiary, your share is simply redistributed among the remaining heirs according to the terms of the will or the statutory intestacy rules.

Minors Cannot Disclaim

This is another strict rule. A minor child (under the age of 18) cannot disclaim an inheritance under Israeli law. Parents cannot disclaim on behalf of their minor children. This means that if a deceased person’s grandchildren are minors and are named as heirs, those grandchildren will inherit regardless of the family’s preferences. This rule can create complications in estate planning and must be considered early in the process.

The Disclaimer Is Permanent

Once the disclaimer is filed with the Inheritance Registrar or Family Court and accepted as part of the probate proceedings, it is permanent and extremely difficult to reverse. Israeli courts have set a very high bar for withdrawing a disclaimer after it has been accepted. This is not a decision that can be revisited casually. The disclaiming heir’s name will not appear on the final probate order as having inherited.

Common Scenarios Where Heirs Disclaim

In our practice, we see disclaimers arise in a range of situations. The following are the most common.

1. Children Disclaiming in Favor of a Surviving Parent

This is by far the most frequent scenario. A parent passes away, leaving a surviving spouse and adult children. Under Israeli intestacy law, the surviving spouse typically receives half the estate, and the children split the other half. But the children do not want to become co-owners of the family apartment—they want their surviving parent to continue living in the home without legal complications.

The adult children file disclaimers in favor of the surviving parent, who then inherits 100% of the property. We handle this situation regularly, and it is often the smoothest form of disclaimer because all parties are aligned and the legal mechanics are clear.

2. Avoiding Tax Consequences in the Heir’s Home Country

A UK-resident heir, for example, may face UK Inheritance Tax (IHT) at 40% on the value of Israeli assets above the nil-rate band. In certain situations, if the Israeli inheritance represents a small portion of the overall estate, disclaiming may be preferable to accepting the inheritance and incurring substantial IHT. However, this requires careful coordination between Israeli law and UK tax rules, and we strongly recommend consulting both an Israeli inheritance lawyer and a UK tax advisor before proceeding.

3. Avoiding Co-Ownership Complications

Consider this real-world situation: an heir discovers they would inherit an 8% share of undeveloped land alongside 12 other co-owners they have never met. The cost and effort of managing, maintaining, or selling that fractional share may well exceed its value. Disclaiming allows the share to pass to another heir who holds a larger stake and can manage the property more effectively.

4. Property Carrying Debts or Liabilities

The inherited property may have accumulated years of unpaid Arnona, water, and electricity arrears, building maintenance debts, or even an outstanding mortgage. If the debts approach or exceed the property’s value, accepting the inheritance may create a net liability rather than a benefit. In these cases, disclaiming can be the financially prudent choice.

5. Family Agreements on Asset Division

Siblings sometimes agree among themselves that one sibling will take the Israeli property while others take assets held in the US or UK. The siblings disclaim their Israeli inheritance formally as part of a coordinated family arrangement. This is perfectly lawful, but the disclaimers and the broader arrangement should be structured with professional guidance to avoid unintended tax consequences.

Tax Implications for US and UK Heirs

This section may be the most important part of this article. Disclaiming an Israeli inheritance is an Israeli legal act, but it can trigger tax consequences in your home country. Any heir considering a disclaimer must understand these risks before signing anything.

For Heirs in the United States

The IRS may treat a disclaimer of Israeli inheritance as a taxable gift if it does not qualify as a “qualified disclaimer” under Internal Revenue Code Section 2518. To meet the US requirements, the disclaimer must satisfy all of the following conditions:

1. It must be in writing.
2. It must be made within 9 months of the date of the decedent’s death.
3. The disclaiming heir must not have accepted the property or any of its benefits.
4. The property must pass to someone other than the disclaiming person without any direction from the disclaiming person as to who receives it.

If the Israeli disclaimer does not meet these US requirements, the IRS may view it as a gift from the disclaiming heir to the person who receives the share. This could trigger gift tax reporting obligations (Form 709) and consume part of the heir’s lifetime gift tax exemption.

Pay particular attention to condition (d). Under Section 6 of the Israeli Succession Law, an heir can specify who receives their disclaimed share. But under US law, directing where the property goes may disqualify the disclaimer from “qualified” status. This creates a direct tension between Israeli disclaimer law and US tax law that must be carefully navigated.

For Heirs in the United Kingdom

HMRC may similarly treat a disclaimer that does not meet UK requirements as a transfer of value subject to Inheritance Tax. Under UK law, a “deed of variation” made within two years of death can be treated as if the deceased had made the disposition. However, this is a UK legal concept that must be coordinated with the Israeli disclaimer to ensure both jurisdictions recognize the arrangement consistently.

The Bottom Line on Tax

Any heir considering disclaiming an Israeli inheritance must consult with both an Israeli attorney and a tax advisor in their home country before signing anything. The Israeli disclaimer and the US or UK tax requirements must be coordinated to avoid an unexpected tax bill. This is not an area for guesswork or after-the-fact corrections.

How a Disclaimer Is Filed

The practical process for filing a disclaimer is relatively straightforward, especially for heirs living abroad who work with an Israeli attorney. Here is what it involves.

The disclaimer is filed as part of the Israeli probate proceedings. It is not a standalone filing; rather, it is incorporated into the application for a probate order or succession order.

It can be done remotely. The disclaiming heir does not need to travel to Israel. The heir signs the necessary documents, typically through an Israeli Power of Attorney, and the attorney files them with the Inheritance Registrar on the heir’s behalf.

The disclaimer document must clearly state: the identity of the disclaiming heir, the estate being disclaimed from, and—if the heir chooses to specify—who the share is being disclaimed in favor of (subject to the Section 6 restrictions described above). The Inheritance Registrar or Family Court reviews the disclaimer and, if it complies with the law, accepts it as part of issuing the final probate or succession order.

Once accepted, the disclaiming heir’s name does not appear on the final order as having inherited. The estate is distributed as if the disclaiming heir were never in the picture.

What Happens If You Don’t Disclaim but Don’t Want the Property

This is a situation we encounter often. An heir knows they do not want the Israeli property but never gets around to formally disclaiming—or discovers the option only after the estate has been distributed. Here is what happens.

Under Israeli law, you inherit by operation of law the moment the deceased dies, even if you are unaware of the inheritance. There is no requirement that you “accept” the inheritance for it to vest in you. If you do not formally disclaim, you are an heir.

Once you have inherited, your options are to sell your share after the probate process is complete or to gift your share to a family member. Both of these are separate transactions with their own legal and tax implications. Selling involves the full Israeli capital gains tax regime. Gifting requires compliance with Israeli property transfer rules and may trigger tax obligations in both Israel and the heir’s home country.

The key takeaway: disclaiming before the estate is distributed is almost always cleaner, simpler, and more tax-efficient than inheriting first and then transferring. If there is any possibility you may want to disclaim, raise the issue early in the probate process.

When We Advise Clients to Consider Disclaiming

At Aharoni Law, we do not wait for clients to ask about disclaiming. As part of our initial assessment of every Israeli estate matter, we evaluate whether any heir might benefit from a disclaimer. We proactively raise the option when:

• The surviving parent needs the property to live in. If the family apartment is the surviving spouse’s primary residence and the children have no interest in fractional ownership, disclaiming is usually the right move.
• The inherited share is too small to be practical. A 5% or 10% share in co-owned land with multiple unrelated co-owners is often more of a burden than a benefit.
• The property’s debts are close to its value. When Arnona’s arrears, maintenance debts, and other liabilities eat into the property’s worth, disclaiming avoids inheriting a problem.
• The tax cost of accepting exceeds the benefit. Particularly for UK heirs facing 40% IHT on a relatively modest Israeli asset, disclaiming may be the better financial outcome.
• The family has an agreed-upon asset division plan. When siblings have agreed on who takes what across multiple countries, disclaimers formalize the arrangement cleanly.

When We Advise Against Disclaiming

Equally important is knowing when disclaiming is not in the heir’s interest. We regularly counsel clients against disclaiming in the following situations:

• The property’s value is being underestimated. Israeli real estate has appreciated considerably over the past two decades. An apartment that the family dismisses as “not worth much” may be worth several hundred thousand dollars. We always recommend obtaining a current market valuation before making any decision.
• Urban renewal (Tama 38 / Pinui Binui) could transform the property’s value. Many older Israeli apartment buildings are eligible for government-backed urban renewal programs that can dramatically increase unit values—sometimes doubling or tripling them. Disclaiming before investigating whether the property is in a renewal zone would be premature.
• The tax consequences of disclaiming are worse than inheriting. This can happen. A US heir who directs their disclaimed share to a sibling may trigger gift tax consequences that exceed any benefit of disclaiming. The math must be done before the decision is made.
• The heir may want the property later. We have seen heirs disclaim because they cannot imagine ever living in Israel or using the property, only to regret it years later. Remember: the disclaimer is permanent.
• There is a viable path to selling the share at a fair price. If the property can be sold, the heir receives value for their share rather than giving it up entirely. We always explore the sale option before recommending a disclaimer.

Our approach is clear: disclaiming is one tool among several, not a default recommendation. Our role is to help heirs understand the full value of what they stand to inherit and to make an informed decision. Often, the right answer is to accept the inheritance and develop a strategy to manage or sell the asset effectively.

A Note from Our Founder

In more than 20 years of practicing Israeli inheritance and real estate law, I have handled hundreds of estates involving heirs abroad. Disclaiming is a legitimate and sometimes necessary choice, but it should always be an informed one.

What concerns me most is the heir who disclaims without fully understanding what they are giving up. Israeli property values have risen substantially. Urban renewal programs are transforming older buildings. Tax planning can often make acceptance far more favorable than it first appears.

If you are considering disclaiming, I encourage you to speak with our team first. Let us evaluate the property, run the numbers, and give you a clear picture of your options. You may find that the inheritance you were ready to walk away from is worth far more than you thought.

Rahav D. Aharoni, Adv. (View full bio)

Founder, Aharoni Law Firm

Israel Bar Association Lic. No. 47409 (since 2007)

What Our Clients Say

Handling Israeli estates from abroad involves complexity, family dynamics, and trust. Here is what clients have shared about working with us (via Google, where our firm holds a 5.00/5.00 rating):

“Efficient, knowledgeable in both Israeli & U.S. law, and reasonably priced. I couldn’t have asked for a better legal partner for my cross‑border needs!” – Noah R.

“Professional, reliable, communicative, available, and knowledgeable. These are some of the attributes that Rahav Aharoni possesses that contribute to his excellent legal practice. I highly recommend him and know from personal experience you will not be disappointed in his advice and work.” – Elias W.

“Rahav did a great job helping us get our inheritance from Bank Hapoalim. After several failed attempts and many sleepless nights on the phone, including via another lawyer in Israel, we were desperate. Then we hired Rahav, and he handled it very honestly, professionally, and efficiently. His law firm, with its presence in both Israel and the US, was just what we needed.” – Nataly K.

Schedule a Free Consultation with Us Today

If you are an heir to an Israeli estate and are considering whether to accept or disclaim your inheritance, contact Aharoni Law for a consultation. We can evaluate your specific situation, coordinate with your US or UK tax advisor, and ensure that any disclaimer is filed correctly and in time.

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