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 ]

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