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10 Reasons to Disclaim an Inheritance


7
The Marital Deduction
A marital trust can help ease the burden on your spouse if you pass away first.
A marital trust can help ease the burden on your spouse if you pass away first.
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A surviving spouse can't be taxed on an inheritance, although as we've seen, it does add to the survivor's total estate in terms of the next generation. In order to lessen this future burden, many couples create a marital trust by which the executor can equalize the estates of the decedent and survivor. Estate taxes are calculated on the overall size of what's considered an estate -- which is to say, two smaller estates will be taxed less than one giant estate, even though the monetary value is equivalent. Thus, the tax burden on the next generation is lessened.

But if you don't have a marital trust in place, a smart disclaimer can do the same work. Say a husband passes on without a will in a state where half of his estate automatically goes to his wife and half to his kids. The kids could pay taxes on that money. But if the children file disclaimers on their inheritances, that money goes back to the wife tax-free, because she is now the only beneficiary.


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