disclaimers for estate planning purposes

Provided the disclaimer is done properly, the disclaimed property will pass through the probate administration and the estate will be able to take advantage of any available unified credit for federal estate tax purposes.

There is no longer a unified credit. Since 2001, the credit for death taxes and lifetime gift taxes is different. However, if a spouse disclaims an asset, you must look to the will to determine who will get the asset. Sometime, the will puts disclaimed assets into a trust for the spouse and he or she will also have to disclaim the income interest. Assuming that the benefit then goes to a child or other taxable beneficiary, the exemption equivalent amount can be used to shelter it. Make sure that you have enough left as you can use some of the two million during lifetime. David M. Frees III
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