Qualified Disclaimers: When Saying 'No, Thanks' Can Mean Getting More

Estate Planning and Tax Advisor & Alert

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PUBLISHED ON: May 1, 2005

For a number of reasons, some of which will be discussed in this article, sometimes it makes sense for a beneficiary to refuse a lifetime gift or a bequest under a will or trust agreement, or to refuse a share that passes by intestacy if there is no will, and allow the property that has been refused to pass as if the beneficiary had not survived. Such a refusal, called a “disclaimer” by the Internal Revenue Code and many states (or a “renunciation” by some states) has the effect, for gift, estate and generation-skipping transfer tax purposes, of treating the disclaimed interest as if it had never been transferred to the person who is making the disclaimer (the “disclaimant”).