What Is A Disclaimer Trust?

San Diego Disclaimer Trust Attorney

A disclaimer trust, as the fruit of a revocable living trust, enables a married couple to create more ease and autonomy for the surviving spouse when the first spouse dies. In effect, it passes the deceased spouse’s assets directly to the surviving spouse; this can be desirable for couples whose situation allows for such primacy of the other spouse.

Every couple’s situation is unique. To reduce the possibility of a problem after your or your spouse’s death, your estate plan should be evaluated and, if necessary, recalibrated to make sure your assets are protected and your tax exposure minimized. You need to ensure that the transfer of the estate assets in the event of the death of your spouse is free of unnecessary delays that could result because of probate or trust issues.

The primary difference between a disclaimer trust and the classic “A-B” trust is what happens to the couple’s assets upon the passing of the first spouse.  In a classic “A-B” model, half of the couple’s assets are frozen and placed in an irrevocable trust to be passed on to heirs and beneficiaries.  The disclaimer trust enables the surviving spouse to have the opportunity to evaluate several factors including:

  • Remaining life expectancy
  • Cost of Living
  • Healthcare Issues
  • Taxation

Once a comprehensive financial assessment has been completed, the surviving spouse determines which portion of the assets to “disclaim” – placing them in the irrevocable portion of the trust.  The amount of the “disclaimer” does not have to be half, it may be more or it could be substantially less.  The disclaimer trust provides more flexibility for a surviving spouse.

In blended family situations this can create issues for children of previous marriages and inheritances.  It is important to seek the counsel of an experienced and seasoned estate planning and tax attorney.

Assessing And Meeting Your Estate Planning Needs, Affordably

At the law firm of Janathan L. Allen, APC, we can assist you in assessing and meeting your estate planning needs — and avoiding probate. Our attorneys are known for providing holistic advice that makes things easier for our clients — being able to write good documents simply isn’t enough. We have extensive tax experience and practical estate planning and business planning experience. We can answer your questions about:

  • A-B trusts
  • Estate taxes for estates worth in excess of $5 million
  • Bypass trusts or credit shelter trusts
  • Charitable trusts, special needs trusts and other instruments you may benefit from

Most people don’t like to think about death. Many people have questions about how funds within a trust can be used after one spouse passes, and how to protect heirs and beneficiaries. We can help you get through uncomfortable discussions and questions and save you time and money with careful planning.

Contact Us For Advice Regarding Disclaimer Trusts | Free Consultation

Contact Janathan L. Allen, APC for a free consultation regarding trusts and other estate planning matters. Our lawyers are based in San Diego, but we serve clients throughout California and around the world.