Disclaimer trust

Disclaimer trust allows to transfer property interests to the trust without being taxed. Usually it's origin is will of passed spouse. It is necessary that second spouse acts according to the wishes of the passed one. There is a time limit to set up that kind of trust, e.g. in California it is 9 months. Disclaimer trust is different from traditional A/B trust, because it it allows to make decision about the plan later.

For example, if husband dies, wife can pass interests in the estate to the trust. The trust is then treated as it were the original beneficiary, therefore no tax is required. As a result children can benefit from regular payouts.

Disclaimer trust is a complex legal construction, therefore it should be created with help of professionals. For example, it can bring problems with regard to inheritance. If the will is not precise it can be difficult to set disclaimer trust.


References

At work.png

This is an article stub.
If you are able to help improve this article, please feel free to edit it.