However, the distribution itself and the income allocable to it cannot be disclaimed
If the surviving spouse disclaims, he or she cannot be the trustee of the recipient trust and hold discretionary distribution powers over the disclaimed
benefits unless the powers are limited to an ascertainable standard--trust assets can be applied only for the health, education, support or maintenance of beneficiaries.
2518 provides that if a person makes a qualified disclaimer as to any interest in property, the disclaimed
interest is treated as if it had never been transferred to the person making the qualified disclaimer, for purposes of the Federal estate, gift and generation-skipping transfer (GST) tax provisions.
The list does not include inheritances disclaimed
under state law.
Further, the plan language allows an adult child to disclaim his or her interest in the amount disclaimed
by his parent (i.
property passes to grandchildren, and the applicable generation-skipping exemption amount has not been exceeded, tax on the value of this disclaimed
property can be avoided.
For tax purposes, a qualified disclaimer has the effect of treating the disclaimed
interest as if it had never been transferred to the disclaimant.
Under the regulations, if a qualified disclaimer results in the surviving spouse becoming entitled to the disclaimed
property, the property is treated as passing from the decedent to the surviving spouse for purposes of the marital deduction.
They executed mutual wills, both of which provided that, if a disclaimer was made by the decedent, the disclaimed
portion of the estate would go into a trust.
The Court noted that inheritances or devises that have been disclaimed
under state law are not included in this list or in any other Federal tax collection provision.
no property or rights to property shall be exempt from levy other than the property specifically made exempt by subsection (a)" Inheritances or devises disclaimed
under state law are not included in Sec.
In all four cases, an heir who owed back taxes to the Federal government disclaimed
Also, the acceptance of any consideration in return for disclaiming is acceptance of the benefits of the entire interest disclaimed
Disclaimers can be useful when the recipient of the bequest already has a large estate and the effect of the disclaimer is to transfer the disclaimed
property to a favored beneficiary (e.
These proposed regulations would be effective for transfers creating the interest or power to be disclaimed
made after the date of publication of final regulations in the Federal Register.