Life and Death Planning for Retirement Benefits

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Chapter 4: Inherited Benefits: Advising Executors and Beneficiaries 201
D. Comply with requirements of the plan or IRA. Check whether the plan or IRA has its
own requirements for disclaimers and comply with those (see B)).
E. Keep the disclaimer short. It’s tempting to recite, in the disclaimer, who will receive the
property as a result of the disclaimer, but it’s a bad idea. If you mention who the property
will pass to, it looks as if the disclaimant is trying to direct who will receive the property,
or to make the disclaimer conditional on the property’s passing to those recipients, either
of which actions would make the disclaimer not qualified under A),
B).
F. Know where the property will go before disclaiming it. Investigate THOROUGHLY
who will receive the property as a result of the disclaimer. A child (e.g.) may assume that
if he disclaims an inheritance from his father this will cause the inheritance to pass to his
mother, only to find out later that the disclaimer caused the property to pass to some distant
relatives of the father. See C).
4.4.02 Requirements for qualified disclaimer: § 2518
Here are the requirements for a qualified disclaimer under se for why it
is important for the disclaimer to be “qualified.”
A. The disclaimer must be irrevocable, unqualified (unconditional), and in writing.
Yes, that’s right: In order to be qualified, the disclaimer must be unqualified! Verbal,
revocable, and conditional disclaimers are not qualified disclaimers.
B. The person who is disclaiming (the “disclaimant”) must not have “accepted the interest
disclaimed or any of its benefits.” See
C. The disclaimer must be delivered by a certain deadline. For retirement plan death benefits,
the deadline is normally nine months after the participant’s death. See
D. The disclaimer must be delivered to the correct party(ies). See
E. The property must pass, as a result of the disclaimer, to someone other than the disclaimant.
See A). Exception: Property can pass to the decedent’s spouse as a result of the
disclaimer, even if she is also the disclaimant.
F. The property must pass, as a result of the disclaimer, to whoever it passes to without any
direction on the part of the disclaimant. Disclaimers by the surviving spouse are NOT
excepted from this rule. See B).
G. A disclaimer can be qualified under even if it is not valid under state law.
The income tax effects of a qualified disclaimer that is not valid under state
law are uncertain; see
4.4.03 Income tax treatment of disclaimers