disclaimer trust
Disclaimer trust refers to a type of trust used by spouses to limit estate taxes . Spouses can agree to move assets the other spouse will receive upon their death into an irrevocable trust in their wills . This only occurs if the spouse chooses not to inherit the assets outright. A spouse can just receive the assets directly and pay the subsequent estate taxes, or the spouse can disclaim the assets, in which case the deceased spouse’s will directs them into a disclaimer trust and avoids estate taxes for the surviving spouse. The surviving spouse still benefits from the assets, but they will be limited to the terms of the trust. A spouse may also choose to use a disclaimer trust because they may keep assets away from creditors , later spouses should the survivor get remarried, or ensure children receive the assets from the trust after the surviving spouse passes.
See also: Bypass Trust
[Last reviewed in January of 2022 by the Wex Definitions Team ]
Keywords
Wex
- LIFE EVENTS
- financial events
- wills
- PROPERTY
- trusts
- inheritances & estates
- wex definitions
- family law