Question: I don’t need the money from my father, and I’d like to pass it to my children instead, without any adverse tax consequences. Is that when a disclaimer might be used?
Answer: Yes, a disclaimer could be the perfect tool to accomplish this objective. If you disclaim in the inheritance after your father is deceased, but before you accept any benefit from the inheritance, the inheritance will pass as though you predeceased your father. In that case, one would look to the terms of your father’s estate plan to determine who would be the beneficiary or beneficiaries to receive the disclaimed portion of that inheritance.
If the document provides that in the event you predecease your father, your share of the inheritance is to be distributed to your children equally, then your children would receive the assets you disclaimed. Since you made the qualified disclaimer, you will not be deemed to have made a gift to your children and thus you won’t suffer any negative tax consequences. Moreover, those disclaimed assets will not be included in your estate at your death.
As always, if you have any questions or would like to learn more, please contact Steve Shane at firstname.lastname@example.org or .
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Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.
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