Disclaimer trust plan
A planning pattern: spouse receives assets outright (or in a broad trust) and may disclaim within nine months so disclaimed property funds a bypass trust. Disclaimer must qualify under § 2518. Not a separate trust type — the funded trust is typically a B trust.
| Facet | Detail |
|---|---|
| Also called | Disclaimer planning, qualified disclaimer to bypass trust |
| A-B / A-B-C role | Post-death alternative to fixed formula for B trust funding |
| When created | Bypass funded only if spouse disclaims after first death |
| Revocable | Bypass sub-trust irrevocable once funded |
| Inter vivos / testamentary | Testamentary mechanism |
| Typical beneficiaries | Same as B trust after disclaimer |
| Primary purpose | Flexibility to see actual estate/tax law before committing to bypass |
| Marital deduction | On non-disclaimed marital share |
| Uses estate exclusion | On disclaimed amount routed to bypass |
| In survivor's estate | Disclaimed/bypass portion: no |
| Basis step-up | At first death on all estate assets |
| Income tax | Per resulting trusts |
| Crummey powers | No |
| GST / dynasty | As per bypass terms |
| Spendthrift | As per bypass terms |
| See-through (IRA) | Disclaimer of IRA interests is complex — specialist drafting required |
| Key tradeoff | Post-death flexibility vs uncertainty and strict disclaimer rules |