Skip to main content

In the paperwork of my Fathers estate I have a court document "Disclaimer of Mike Smith", ...Mike Smith" hereby irrevocably...

Seattle, WA |

..waives any & all right & disclaims any & all interest which he may have by right of survivorship in the following account at ABC Bank Account number #123-4456. Said account has been held in the names of Tom Jones & Mike Smith as joint tentants with right of survivorship.The undersigned does not disclaim the right to recieve any interest in such funds under the Will of Tom Jones which Will is on file herein. Yut~ta~hey here..? Can someone Please put this in to English here for me...What's this mean?> What would be the reasons behind such a document?

If he didn't do the disclaimer he would of recieved the funds in the account by right of survivorship. He was the sole beneficiary of my Dads estate,so either way he recieves the funds. So why bother with the disclaimer @ all? How did doing the disclaimer benefit him?

Attorney Answers 4

Posted

"Mike" signed what is called a disclaimer. It means that Mike is stepping back as a person who would otherwise be entitled to receive the bank account automatically dispite what your father's Last Will and Testament says. Because of this disclaimer, the bank account would then pass as your father's Will directs. If your father provided for Mike (or a trust for his benefit) to receive something under his Will, then the disclaimer won't preclude him from receiving that bequest.

I hope that helps.

Mark as helpful

7 lawyers agree

2 comments

Asker

Posted

So basically its a way of avoiding taxes then right? Thnx~ :)

Jennifer L King

Jennifer L King

Posted

It can be. If Mike preferred that the person who takes under the will receive the funds instead of himself, and let's say Mike would have given that person the money anyway, then by disclaiming he avoided making a potentially taxable gift. Another thing Mike could have been doing is letting the funds go to a trust for his benefit if one was set up in your father's will. Depending on the trust terms, Mike could want the creditor protection of the trust (sometimes called a spendthrift trust). There are several good reasons a person may decide to file a disclaimer. Another tool in the estate planner's toolbox!

Posted

This is Mike Smith voluntarily giving up his ownership interest as a co-owner of the account so the money can be distributed according to Tom Jones' will.

This posting is for informational purposes only. It is not legal advice, nor does it establish an attorney-client relationship. For more information, please visit www.justinelderlaw.com.

Mark as helpful

4 lawyers agree

Posted

I agree with my colleagues. It is impossible to know exactly their reason for signing the disclaimer. There is certainly a difference between the two scenarios. While Mike was on the account he had a current interest in the account as well as a right of survivorship. Once he disclaimed that interest, he no longer had any current interest in that account. The estate planning that was in place would then govern the distribution of the assets. There are also potential tax reasons, in particular a step up in basis, that may have spurred the change.

My responses are of a general nature and not having the opportunity to get all of the background may mean that they are not complete. I may not be a licensed attorney in the jurisdiction where you are seeking advice and is based solely on the laws and my expertise in those states in which I am licensed. Therefore, this advice can provide a good foundation in seeking quality legal advice in your particular area.

Mark as helpful

1 lawyer agrees

Posted

This does sound a little perplexing. Either way it seem that the funds would go to Smith. Probate counsel and he must have decided that there was some benefit to getting the funds through the will instead of outside the will. That is odd because counsel usually tries to do the opposite. Maybe there was some tax, solvency (non intervention powers) or creditor advantage for Mike Smith getting the property through the will. Without talking with Smith's counsel it is hard to say what they were accomplishing.

Possibly more importantly, how does it impact you? You did not mention if the legality impacts you in anyway or what interest you might have.

Mark as helpful

1 comment

Jennifer L King

Jennifer L King

Posted

In my experience, a well considered disclaimer can be a very useful tool. For example, let's say that Mike already has a large estate and doesn't need the funds. If Dad's will gave property to people Mike would otherwise like to see benefit (say Mike's children), then a disclaimer probably makes perfect sense because he does not need to use any of his gift tax exemption to get the funds to his children or increase his estate tax liability by dying with the funds being part of his estate. Of course, we are all just theorizing because we don't know more about the situation!

Tax law topics

Top tips from attorneys

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer

Browse all legal topics