Using Disclaimers in Estates

20 December 2019

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You probably come across disclaimers a lot in practice. They are very useful and can be more tax efficient than a deed of family arrangement and if structured correctly they can have the same effect. I have a good number of files recently where disclaimers arose and I thought I might share out some thoughts.

Disclaimers should be conducted as early as possible in the probate process and generally before a grant issues. I have seen disclaimers prepared after a grant, and the general rule is that a person cannot disclaim an asset after accepting it. So the earlier the better, but that does not mean that a post grant disclaimer is impossible.

In intestacy situations, you cannot partially disclaim. In contrast, a beneficiary under a will who is in receipt of a legacy and also a share in the residue can disclaim the legacy and keep the residue, but a beneficiary cannot partially disclaim the residue. What is interesting to note however, is that a beneficiary can disclaim part of a legacy and part of the residue if the will so provides.