Disclaimer

Disclaimer means:
a provision that allows a person to postpone decisions based upon asset values and estate composition until such values are fixed at death. In essence, a disclaimer, or renunciation, is an unequivocal refusal to accept an interest or power in property to which a person is otherwise entitled by will. gift, or operation of law. Quite often the disclaimed property is passed to another person.

To be qualified, a disclaimer not only must be an irrevocable and unqualified refusal by a person to accept an interest in property but also must be expressed in writing and be received by the transferor within a specified time. As a result of such refusal, the interest passes, without any direction on the part of the person making the disclaimer, either to the spouse of the decedent or to another person.

For example, a specific bequest to a charity coupled with a disclaimer in favor of the charity can be a valuable provision in a will. The point here is that, if the estate tax rate is less than the income tax rate of an heir, a greater benefit will occur if the heir makes the charitable contribution. Further, in a small estate the deduction is wasted on the estate tax return because the estate is less than the exemption equivalent. Former IRC (check if this IRC provision is current here) §§2046 and 2518.

See the entries Income Tax and State Income Tax in the American Encyclopedia of Law.

See Inheritance Tax and Inheritance Tax.

See Tax Rate and Tax Rate.