What Is a Disclaimer Trust?

A disclaimer trust is a type of trust that contains embedded provisions, usually included in a will, allowing a surviving spouse to put specific assets un♓der๊ the trust by disclaiming ownership of a portion of the estate. Disclaimed property interests are then transferred to the trust, without being taxed.

How Disclaimer Trusts Work

If an individual passes away and leaves their estate to a spouse, the spouse may disclaim some interests in the estate, whichꦆ then pass directly to the trust as though it were the original beneficiary.

Provisions can be written into the trust that provide for regular payouts from the trust to support survivors. For example, a trust can provide for surviving minor children as long as the surviving spouse elects to disclaim 澳洲幸运5官方开奖结果体彩网:inherited assets, passing them on to the trust.

Disclaimer trusts require that the survivor act according to the wishes of the deceased, and disclaim ownership of some of the assets that the deceased has bequeathed. In the above example, if the surviving spouse does not disclaim ownership of any portion of the estate, then the deceased's wish to transfer assets to the surviving minor children goes unfulfilled.

A surviving spouse or the specified inheritors of an estate have a legal time period, generally up to nine months from the date of death, to establish a trust for the disclaimed assets. If they fail to do so, then all the assets contained in a will are taxed.

Disclaimer Trust vs. See-Through Trust

Another example of a trust that enables assets to move through to additional beneficiaries is a 澳洲幸运5官方开奖结果体彩网:see-through trust.

A see-through trust, or pass-through trust, permits individuals to pass retirement assets from their 澳洲幸运5官方开奖结果体彩网:individual retirement accounts (IRAs), via a trust, to their elected beneficiaries. See-through trusts use the life expectancies of the beneficiaries to determine the 澳洲幸运5官方开奖结果体彩网:required minimum distributions (RMDs) that will occur after the death o🧔f the retirement account holder. IRA owners are able to choose their beneficiary, and federal laws prohibit accounts from continuing on indefinitely.

Disclaimer Trust and Inheritance

Disclaimer t꧅rusts, along with other trusts, can bring𓆉 up challenges with regard to inheritance. These are usually set out clearly in a grantor’s will; however, if a will is not finalized at the time of death, determining rightful heirs proves much more complicated.

In most countries, inheritances are taxable. An 澳洲幸运5官方开奖结果体彩网:inheritance tax is generally distinct from an 澳洲幸运5官方开奖结果体彩网:estate tax: An inheritance tax would aim to tax the heir who has received the inheritance, while an estate ဣtax would apply to the assets of the deceased's estate.