Regarding a qualified disclaimer in a trust, can Fred make one to redirect distributions, and why?

Regarding a qualified disclaimer in a trust, can Fred make one to redirect distributions, and why?

• A. He cannot, since no disclaimer can be made that would be recognized for federal transfer tax purposes at this point because he has violated one or more requirements.
• B. He can, if the disclaimer is properly executed and filed within 9 months after Paul's death.
• C. He can, if the disclaimer is properly executed and filed within 9 months after Paul's death, but the disclaimer must be limited to Fred's actuarial share.
• D. He can, within 9 months after Paul's death, if the disclaimer is properly executed and filed with the court.

Answer: (A)

A qualified disclaimer lets a beneficiary renounce an interest so that it passes to the designated alternate beneficiaries for federal transfer tax purposes, but it must meet several strict rules. It has to be made within nine months of the decedent’s death, be in writing and irrevocable, and the disclaimed interest cannot have been accepted or enjoyed by the person making the disclaimer. It also must be delivered to the fiduciary handling the estate or trust (not filed with a court) and must cover the property interest as it would pass under the instrument, without any improper conditioning or consideration. If any of those requirements aren’t met, the disclaimer won’t be recognized for transfer tax purposes. In this situation, Fred cannot make a valid qualified disclaimer to redirect distributions because he has run afoul of one or more of those requirements, so no tax-qualified disclaimer would be recognized. If the requirements were all satisfied—timely, properly executed, no prior acceptance, and properly delivered—the disclaimer could be used to redirect the disclaimed share to the intended alternate beneficiaries.

A qualified disclaimer lets a beneficiary renounce an interest so that it passes to the designated alternate beneficiaries for federal transfer tax purposes, but it must meet several strict rules. It has to be made within nine months of the decedent’s death, be in writing and irrevocable, and the disclaimed interest cannot have been accepted or enjoyed by the person making the disclaimer. It also must be delivered to the fiduciary handling the estate or trust (not filed with a court) and must cover the property interest as it would pass under the instrument, without any improper conditioning or consideration. If any of those requirements aren’t met, the disclaimer won’t be recognized for transfer tax purposes. In this situation, Fred cannot make a valid qualified disclaimer to redirect distributions because he has run afoul of one or more of those requirements, so no tax-qualified disclaimer would be recognized. If the requirements were all satisfied—timely, properly executed, no prior acceptance, and properly delivered—the disclaimer could be used to redirect the disclaimed share to the intended alternate beneficiaries.