Disclaimers are an incredible tool to be used in California estate planning, trust and probate law. Typically they are used after death in probate and trust administration settings. In some cases people call it “after death estate planning.” In any event it is a very powerful tool that not enough California attorneys know about. Below are my notes from my 2008 NBI seminar I presented on probate in California. As always contact me directly with questions or visit our website for more info at www.californiaprobate.info
i) by intestate succession;
ii) under a will;
iii) under a trust;
iv) by succession to a disclaimed interest;
v) by virtue of an election to take against a will;
vi) by creation of a power of appointment;
vii) by exercise or nonexercise of a power of appointment;
viii) by an inter vivos gift, whether outright or in trust;
ix) by surviving the death of a depositor of a Totten trust account or POD account;
x) under an insurance or annuity contract;
xi) by surviving the death of another joint tenant;
xii) under an employee benefit plan;
xiii) under an individual retirement account (IRA), annuity or bond;
xiv) any other interest created by any testamentary or inter vivos instrument or by operation of law;
i) in writing;
ii) signed by the disclaimant;
iii) identify the creator of the interest;
iv) describe the interest to be disclaimed;
v) state the disclaimer and the extent of the disclaimer;
vi) must be filed within a “reasonable time;”
“(a) Unless the creator of the interest provides for a specific disposition of the interest in the event of a disclaimer, the interest disclaimed shall descend, go, be distributed, or continue to be held (1) as to a present interest, as if the disclaimant had predeceased the creator of the interest or (2) as to a future interest, as if the disclaimant had died before the event determining that the taker of the interest had become finally ascertained and the taker’s interest indefeasibly vested. A disclaimer relates back for all purposes to the date of the death of the creator of the disclaimed interest or the determinative event, as the case may be.
(b) Notwithstanding subdivision (a), where the disclaimer is filed on or after January 1, 1985:
(1) The beneficiary is not treated as having predeceased the decedent for the purpose of determining the generation at which the division of the estate is to be made under Part 6 (commencing with Section 240) or other provision of a will, trust, or other instrument.
(2) The beneficiary of a disclaimed interest is not treated as having predeceased the decedent for the purpose of applying subdivision (d) of Section 6409 or subdivision (b) of Section 6410.
(a) A disclaimer may not be made after the beneficiary has accepted the interest sought to be disclaimed.
(b) For the purpose of this section, a beneficiary has accepted an interest if any of the following occurs before a disclaimer is filed with respect to that interest:
(1) The beneficiary, or someone acting on behalf of the beneficiary, makes a voluntary assignment, conveyance, encumbrance, pledge, or transfer of the interest or part thereof, or contracts to do so; provided, however, that a beneficiary will not have accepted an interest if the beneficiary makes a gratuitous conveyance or transfer of the beneficiary’s entire interest in property to the person or persons who would have received the property had the beneficiary made an otherwise qualified disclaimer pursuant to this part.
(2) The beneficiary, or someone acting on behalf of the beneficiary, executes a written waiver under Section 284 of the right to disclaim the interest.
(3) The beneficiary, or someone acting on behalf of the beneficiary, accepts the interest or part thereof or benefit thereunder.
(4) The interest or part thereof is sold at a judicial sale.
(c) An acceptance does not preclude a beneficiary from thereafter disclaiming all or part of an interest if both of the following requirements are met:
(1) The beneficiary became entitled to the interest because another person disclaimed an interest.
(2) The beneficiary or other person acting on behalf of the beneficiary at the time of the acceptance had no knowledge of the interest to which the beneficiary so became entitled.
(d) The acceptance by a joint tenant of the joint tenancy interest created when the joint tenancy is created is not an acceptance by the joint tenant of the interest created when the joint tenant survives the death of another joint tenant.
PRACTICE POINTER: Try to complete disclaimers within nine months of death. Try to get notarized to help establish when it was done if it was not a disclaimer that needs to be filed in the Court. If you are meeting with surviving spouse who has a “disclaimer trust” make sure you advise in writing about doing the disclaimer within 9 months!