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Estate planning and the qualified disclaimer

On Behalf of | Dec 14, 2018 | Estate Planning |

The recent passing of former President, George H. W. Bush, has left many Californians heartbroken. One reason is because he appeared to suffer from what some call the “broken heart syndrome.” This is because former President Bush passed away just a mere eight months after his wife Barbara Bush. As sad as these types of events can be, it can also be informative, especially when looking at estate planning. After all, many families find themselves in a position where a couple, or two parents, pass away in relatively quick succession.

So, how should assets be handled in these situations? It depends on the facts at hand. However, one option is for spouses to create a qualified disclaimer as part of their estate plan. A qualified disclaimer is a written and signed statement whereby an individual essentially refuses to accept any gift from another, including an inheritance. So, if one spouse passes away and leaves assets to his or her spouse, and that spouse has a qualified disclaimer, then the assets will not pass to the second spouse. Instead, they will proceed down the succession chain to the couple’s children or other qualified beneficiaries.

A qualified disclaimer can have many benefits. One benefit is that it can prevent an individual who would otherwise inherit assets from having to pay estate taxes on those assets. A second benefit is that a qualified disclaimer can allow assets to be passed directly to those who would be better suited to use them or more in need of them. In many instances, a surviving spouse who is 90 something years old, such as George Bush, will have very little need for his or her spouse’s assets.

Qualified disclaimers are not right for everyone. In fact, they should only be undertaken after careful consideration. By learning more about qualified disclaimers from their estate planning attorneys, Californians can better ensure that they are engaging in the holistic estate planning that works to their and their loved ones’ benefit.

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