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What all Physicians Should Know

By Lawrence E. Howes; CFP™

By Joel B. Javer; CFP™ 

In some situations, an inheritance might complicate an estate and add to the estate tax burden.  If there are sufficient assets and income to accomplish financial goals, more assets are not needed. A disclaimer may be useful to such physicians.

A Simple Definition

A disclaimer is an unqualified refusal to accept a gift or inheritance, that is, when you “just say no”.  You have decided not to accept a sizable gift made under a will, trust or other document.

Formal Disclaimer Requirements

When you disclaim the property, certain requirements must be met: 

• The disclaimer must be irrevocable;
• The refusal must be in writing;
• The refusal must be received within nine months from the date-of-death;
• You must not have accepted any interest in the property; and
• As a result of the refusal, the property will pass to someone else.

Intent and Results 

The disclaimed property passes under the terms of the decedents will, as if you had predeceased the decedent. If the filer of the disclaimer has control, the property will be included in the disclaimant’s estate and can only be passed to another as a gift for as an inheritance. The intent of the disclaimer is to renounce and never take control of the property. 

Assessment 

The use of disclaimers became a more important tool in estate planning under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). 

Many estate plans that were designed and drafted prior to EGTRRA, had unintended consequences when governed by the new law.  Hence, disclaimers may have been the only way to allocate estate assets according to personal desires versus legal design.

Nevertheless, current political machinations and the impending tax and estate planning “sunset-provisions” are sure to add to the confusion. 

Conclusion:

What is your experience with “disclaimers”; if any? 

More information: http://www.jbpub.com/catalog/0763745790/

Related info: www.HealthDictionarySeries.com

Filed under: Estate Planning | Tagged: Estate Planning |