James D. Lynch
A will disclaimer is a beneficiary’s legally binding refusal of a gift under a will. The rationale behind the will disclaimer is to recognize that no one can be compelled to receive a gift.
State laws differ in their disclaimer requirements. In general, it must be in a writing signed by the disclaimant describing the interest that is to be disclaimed. A copy of the disclaimer should be provided to the executor of the estate. Once made, a disclaimer is irrevocable. However, disclaimers are not effective if the beneficiary has already accepted the benefits of the property.
Why would someone want to disclaim a gift under a will? Disclaimers are made primarily for tax reasons. Disclaimers may also be made when the burdens of the property outweigh its benefits (such as a loan or mortgage exceeding the property’s value). Disclaimers can also be made to prevent creditors from filing claims against the property (except in the case of valid federal tax liens).
The disclaimant is treated as if he or she had predeceased the decedent and the property is distributed to the next eligible taker. The disclaimant can NOT direct the property to go to someone else of the disclaimant’s choosing.