Use of Disclaimers by U.S. Persons in the International Context

The concept of renunciation or disclaimer of property interest comes from common law. It means that if someone is given property but doesn’t want it, they can give up their right to it. This can be useful for estate planning, especially for people with international connections. For example, a U.S. citizen who becomes a beneficiary of a trust may want to give up their right to the property in the trust to avoid owing U.S. taxes. It’s important for the person giving up the property to follow the rules in the trust and the law. It’s best to plan ahead and include the option to give up property in the trust, rather than trying to do it later. If a trust is governed by foreign laws and doesn’t talk about disclaimers, but says once the person who made the trust dies, the trust will be split between their child and grandchild. If the child dies, the whole trust goes to the grandchild, or if both die, it goes to charity. If the trust is in a different country and the grandchild lives there, can the child give up their share of the trust to the grandchild? If a child wants to give up their rights to money or property in a trust to avoid paying taxes, they need to follow specific rules. If they don’t, they could end up owing a lot of money in taxes and have to deal with a bunch of complicated paperwork. Without the right rules in place, the child can’t give up their rights to the money or property, even if they want to. Basically, because the child is a U.S. citizen, they have to follow certain rules if they want to give up their right to inherit property. These rules ensure that the property passes to someone else and that the person giving up their right doesn’t try to control where it goes. Congress passed a law saying that local law determines who gets property if someone doesn’t want it, but the person doesn’t have to follow the local law’s specific rules for refusing the property. However, the person can’t just give the property to someone else on their own. They have to follow the local law to make sure the person they want to give it to is allowed to get it. In this case, the trust document needs to have a specific provision that addresses these issues from the beginning, to avoid any problems later on. In simple terms, a disclaimer is a legal way for someone to give up their right to receive an inheritance or gift. This can be useful for estate planning, especially in cases involving international laws. It’s important to consider and include these disclaimers when drafting legal documents, so they can be used if needed in the future. When someone dies, their property can be given to someone else through a process called a disclaimer. This can happen if the person who was supposed to get the property doesn’t want it. The rules for disclaimers changed in 1981, so there may be some uncertainty about how they work. Also, it’s important to follow the laws of the place where the property is to make sure everything is done correctly. If you need help, make sure to talk to a lawyer who knows the laws in that place. William H. Newton III is a lawyer and author who has written a two-volume book about international income tax and estate planning. He also teaches law and has written many articles about international tax and estate planning.

Source: https://www.floridabar.org/the-florida-bar-journal/use-of-disclaimers-by-u-s-persons-in-the-international-context/