How may a disclaimer be helpful when a spouse passes with a pour over Will? by Kurt R. Bachman

How may a disclaimer be helpful to use when a spouse passes with a pour over Will which purports to distribute all probate assets into a Credit Shelter – By Pass Trust (the “Family Trust”), created under the Family Revocable Living Trust Agreement, which then further directs the same to be held for the lifetime of the surviving spouse and ultimate distribution to the children.

The surviving spouse should consider effectuating a legal disclaimer which requires the Family Trust to treat the surviving spouse as predeceased thereby allowing the final disposition of all of the assets owned solely by the deceased spouse at the time of his or her death to be transferred free and clear of the Family Trust and directly to their children, share and share alike, per stirpes. Upon doing so, the surviving spouse and Personal Representative of the Estate and primary income and principal beneficiary of the Family Trust, can allow the immediate transfer all of the assets owned solely by the deceased spouse at the time of his or her death directly to the children, free and clear of the Family Trust. This strategy is especially useful when the surviving spouse has enough of his or her own assets that he or she does not need to tie up the remainder of the deceased spouse’s assets into a complex irrevocable trust originally established to save death taxes which may no longer be relevant because of the repeal of Indiana inheritances taxes and the extremely high current federal estate tax exemption amount of $13,990,000.00 per spouse.