Can I refuse a gift by providing a "Qualified Disclaimer," and what does this entail?

By Steven Merkel AAA
A:

While refusing a gift may seem a little absurd to many, there are several good reasons that an individual might want to do so. Suppose you inherit a $500,000 IRA and a $500,000 CD from your deceased uncle. If the IRA account puts your total estate over the applicable estate tax exclusion amount, you may want to consider a "qualified disclaimer" and let the IRA pass outright to the contingent beneficiaries. Inheritors may also want to refuse acceptance of the gift due to future taxes that they might incur from property ownership, such as property taxes on raw land or real estate.

In order to be a "qualified disclaimer" all of the following conditions must be met:

  1. The disclaimer must be an irrevocable refusal to accept any interest in the property
  2. The disclaimant's refusal must be signed and in written form
  3. The disclaimant cannot have accepted any portion of the property interests or any benefits associated with the property
  4. The disclaimant cannot have any say in who/whom the property will pass
  5. Timely delivery is required, meaning that delivery of the disclaimer must be within nine months of when the interest was created, or within nine of months after attaining age 21.

For additional information, see Refusing An Inheritance.

This question was answered by Steven Merkel

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