A “Disclaimer Trust” is a an effective alternative to the classic “A-B” revocable trust. If we use the example of a husband and wife with an A-B trust, when one spouse dies 50% of the couples assets must be placed into the irrevocable “B” trust regardless of the tax exposure or needs of the surviving spouse. There are instances where the A-B trust provides the type of protection for specific heirs that our clients desire. There are times where the A-B format places unreasonable limits in place, and the existing trust should be reviewed and updated.
A disclaimer trust allows the surviving spouse to make a decision as to how much of the couple’s estate to “disclaim”, providing much more flexibility when it comes to access to the couple’s asset principle, as well as the ultimate disposition of those assets for the rest of their life, and how the funds will be dispersed at the passing of the second spouse. With federal exemptions exceeding $5M for each spouse, the disclaimer trust may be a much more effective instrument for your estate plan. Contact us for a free consultation at 866-631-3470 and schedule an appointment to review your existing trust and discuss options that are appropriate for your unique circumstances.