• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Parman & Easterday

Oklahoma Estate Planning Attorneys

Call Now: (405) 843-6100 |
(918) 615-2700

Attend an Education Program-Oklahoma City Area Attend An Education Program in the Tulsa Area
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
    • What Our Clients Say
  • Estate Planning
    • Asset Protection
    • Business Succession Planning
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • IRA and Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • Powers of Attorney
    • Probate
    • SECURE Act
    • Special Needs Planning
    • Trust Administration and Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Elder Law
    • Emergency Medicaid
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • Asset Protection Worksheet
    • DocuBank
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
      • Elder Law Resources
        • Edmond Elder Law
        • Oklahoma City Elder Law
        • Overland Park Elder Law
        • Yukon Elder Law
      • Medicaid
      • Nursing Home Resources
    • Estate Planning
      • An Overview of Estate and Gift Taxes
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Alzheimer’s FAQs
      • Asset Protection Planning
      • Estate Planning
      • Elder Law
      • Frequently Asked Questions for Families Without an Estate Plan
      • Inheritance Planning for Minors
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Nursing Home Asset Protection
      • Probate
      • Trust Administration
      • Trust Administration & Probate
      • Wills and Trusts
    • Newsletters
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
      • Probate Checklist
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
    • Probate Resources
      • Midwest City Probate
      • Moore Probate
      • Oklahoma City Probate
      • Overland Park Probate
    • Published Books
    • Pre Consultation Form
  • Communities We Serve
    • Edmond
    • Midwest City
    • Moore
    • Norman
    • Oklahoma City
    • Owasso
    • Yukon
  • Reviews
    • Our Reviews
    • Review Us
  • BLOG
  • Contact Us
Home » Nursing Homes » Using Disclaimers to Achieve Client Goals: Double Disclaimers – Part 2

Using Disclaimers to Achieve Client Goals: Double Disclaimers – Part 2

May 19, 2021 by Courtesy of Parman and Easterday

Disclaimers can be a good way of getting assets where you want them to go. If the disclaimer is a “qualified disclaimer,” the client isn’t treated as having made a taxable gift. Sometimes a “double disclaimer” is necessary to achieve the desired outcome.

 by Steve Hartnett

It’s difficult to even think that someone might not want to accept inherited assets. But sometimes clients don’t need any more assets and a newfound inheritance simply may compound their estate tax issues. This is the second of two articles regarding disclaimers. The first article examined the basics of disclaimers. This second article examines a more complex “double disclaimer” and an example of that situation.

As examined in the first article, the requirements of a qualified disclaimer are set forth in Section 2518 of the IRC. It must be in writing, within 9 months, receiving no benefit, and passing either to the spouse or someone other than the disclaimant.

Sometimes a simple, one-step disclaimer will help you achieve the client’s goals. The first article examined such an example. However, sometimes the situation is more complex and a double disclaimer might be necessary to achieve the client’s goals.

Let’s look at an example:

Bill had a trust leaving everything to his surviving spouse, Mary. However, if Mary disclaimed, the property would be held in trust for the benefit of Mary and Bill’s children, Sally and Jason. At Mary’s death, the trust provides the property would go outright to Sally and Jason. If Sally or Jason predeceases Mary, the property would go to their descendants, if any, or to Bill’s descendants.

Mary decides she doesn’t want Blackacre and wants it to go to her children immediately without using any of her estate/gift tax exclusion. The first step in this process is for Mary to execute a qualified disclaimer of the property. That’s the first disclaimer that sends Blackacre to the Bypass or Family Trust for her benefit and the benefit of Sally and Jason. (Remember, even though Mary would benefit from the Bypass Trust, this meets the requirements of a qualified disclaimer because she is the decedent’s spouse.) Next, Mary would execute another qualified disclaimer, this time of her interest in the Bypass Trust. Mary is now treated as having predeceased and the property would go to Sally and Jason. In fact, if desired, the family could go one step further. Let’s say Mary only wanted Sally to get Blackacre and Jason agreed to that plan. After Mary did the first disclaimer sending Blackacre to the Bypass Trust and the second disclaimer of her interest in the Bypass Trust, Jason could disclaim his interest. Since Jason has no children, the terms of the trust would send the assets to Sally. Remember, like releasing water from the dam, it’s imperative to chart the course of the river to know where it will go.

Of course, if Mary wants to get the property just to Sally, she’d have to rely on the expectation that Jason will disclaim after Mary does. Jason would be under no legal obligation to do so.

Disclaimers can be a great way to achieve client goals. Sometimes they can be quite tricky and require thought to achieve the desired outcome. Sometimes more than one disclaimer might be necessary to achieve client goals. Remember to chart the course of the river before releasing the water from the dam and follow the rules of Section 2518 for a qualified disclaimer.

Stephen C. Hartnett, J.D., LL.M.

  • Author
  • Recent Posts
Courtesy of Parman and Easterday
Latest posts by Courtesy of Parman and Easterday (see all)
  • What Happens When You Don’t Trust Your Trustee – Part I - March 22, 2023
  • The Not-So Transparent Corporate Transparency Act - March 15, 2023
  • The View from Heckerling - March 8, 2023

Filed Under: Estate Planning, Legal Education Tagged With: attorney, disclaimer, trust, will

Other Articles You May Find Useful

digital estate planning
Digital Estate Planning Overview
What Happens When You Don’t Trust Your Trustee – Part I
HIPAA
What Does HIPAA Stand For and Why Should I Care?
charitable giving
Is Charitable Giving Part of Your Estate Plan?
The View from Heckerling
guardian selection
How Do I Select a Legal Guardian for My Children?

Primary Sidebar

Parman & Easterday, LLP

DOWNLOAD OUR FREE ESTATE PLANNING CHECKLIST

SUBSCRIBE TO OUR BLOG

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Where We Are

OKLAHOMA CITY, OK
13913 Quail Pointe Drive, Suite B
Oklahoma City, OK 73134
Phone: (405) 843-6100
Fax: (405) 917-7018

MAP

parman_sidbr_map

Where We Are

TULSA, OK
Memorial Place 7633 E. 63rd Place Suite 312
Tulsa, OK 74133
United States (US)
Phone: (405) 843-6100

MAP

parman_sidbr_map

Office Hours

Monday9:00 AM - 5:30 PM
Tuesday9:00 AM - 5:30 PM
Wednesday9:00 AM - 5:30 PM
Thursday9:00 AM - 5:30 PM
Friday9:00 AM - 12:00 PM

Footer

footer-logo

The information on this Oklahoma Law Firm website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Oklahoma City Estate Planning Attorneys at Parman & Easterday offer estate planning services in the Oklahoma City, Oklahoma and surrounding areas. Contact us for help today.

Privacy Policy | Contact Us | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys


© 2023 American Academy of Estate Planning Attorneys, Inc.
  • Facebook
  • LinkedIn
  • Twitter
  • YouTube