Disclaimer Trust

A disclaimer trust is a type of estate planning tool that gives a surviving spouse the ability to “disclaim” all or part of the inheritance after the first spouse’s death. These assets would be transferred into a disclaimer trust, which is typically structured to benefit the surviving spouse during their lifetime while ultimately passing to other beneficiaries after the second spouse’s death.

Typically, the portion of the assets moved into the disclaimer trust would be covered by the first spouse’s exemption and thus is not subject to estate tax. While this structure is similar to a bypass trust, a disclaimer trust allows the surviving spouse to “wait and see” whether it’s more beneficial to disclaim assets or receive them outright.