26 Cfr 25.2518-2

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ELECTRONIC CODE OF FEDERAL REGULATIONS
e-CFR data is current as of November 9, 2016
Title 26 → Chapter I → Subchapter B → Part 25 → §25.2518-2
Title 26: Internal Revenue
PART 25—GIFT TAX; GIFTS MADE AFTER DECEMBER 31, 1954
§25.2518-2 Requirements for a qualified disclaimer.
(a) In general. For the purposes of section 2518(a), a disclaimer shall be a qualified disclaimer only if it satisfies the
requirements of this section. In general, to be a qualified disclaimer—
(1) The disclaimer must be irrevocable and unqualified:
(2) The disclaimer must be in writing;
(3) The writing must be delivered to the person specified in paragraph (b) (2) of this section within the time limitations
specified in paragraph (c)(1) of this section;
(4) The disclaimant must not have accepted the interest disclaimed or any of its benefits; and
(5) The interest disclaimed must pass either to the spouse of the decedent or to a person other than the disclaimant
without any direction on the part of the person making the disclaimer.
(b) Writing—(1) Requirements. A disclaimer is a qualified disclaimer only if it is in writing. The writing must identify the
interest in property disclaimed and be signed either by the disclaimant or by the disclaimant's legal representative.
(2) Delivery. The writing described in paragraph (b)(1) of this section must be delivered to the transferor of the
interest, the transferor's legal representative, the holder of the legal title to the property to which the interest relates, or the
person in possession of such property.
(c) Time limit—(1) In general. A disclaimer is a qualified disclaimer only if the writing described in paragraph (b)(1) of
this section is delivered to the persons described in paragraph (b)(2) of this section no later than the date which is 9
months after the later of—
(i) The date on which the transfer creating the interest in the disclaimant is made, or
(ii) The day on which the disclaimant attains age 21.
(2) A timely mailing of a disclaimer treated as a timely delivery. Although section 7502 and the regulations under that
section apply only to documents to be filed with the Service, a timely mailing of a disclaimer to the person described in
paragraph (b)(2) of this section is treated as a timely delivery if the mailing requirements under paragraphs (c)(1), (c)(2)
and (d) of §301.7502-1 are met. Further, if the last day of the period specified in paragraph (c)(1) of this section falls on
Saturday, Sunday or a legal holiday (as defined in paragraph (b) of §301.7503-1), then the delivery of the writing
described in paragraph (b)(1) of this section shall be considered timely if delivery is made on the first succeeding day
which is not Saturday, Sunday or a legal holiday. See paragraph (d)(3) of this section for rules applicable to the exception
for individuals under 21 years of age.
(3) Transfer. (i) For purposes of the time limitation described in paragraph (c)(1)(i) of this section, the 9-month period
for making a disclaimer generally is to be determined with reference to the transfer creating the interest in the disclaimant.
With respect to inter vivos transfers, a transfer creating an interest occurs when there is a completed gift for Federal gift
tax purposes regardless of whether a gift tax is imposed on the completed gift. Thus, gifts qualifying for the gift tax annual
exclusion under section 2503(b) are regarded as transfers creating an interest for this purpose. With respect to transfers
made by a decedent at death or transfers that become irrevocable at death, the transfer creating the interest occurs on the
date of the decedent's death, even if an estate tax is not imposed on the transfer. For example, a bequest of foreign-situs
property by a nonresident alien decedent is regarded as a transfer creating an interest in property even if the transfer
would not be subject to estate tax. If there is a transfer creating an interest in property during the transferor's lifetime and
such interest is later included in the transferor's gross estate for estate tax purposes (or would have been included if such
interest were subject to estate tax), the 9-month period for making the qualified disclaimer is determined with reference to
the earlier transfer creating the interest. In the case of a general power of appointment, the holder of the power has a
9-month period after the transfer creating the power in which to disclaim. If a person to whom any interest in property

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passes by reason of the exercise, release, or lapse of a general power desires to make a qualified disclaimer, the
disclaimer must be made within a 9-month period after the exercise, release, or lapse regardless of whether the exercise,
release, or lapse is subject to estate or gift tax. In the case of a nongeneral power of appointment, the holder of the power,
permissible appointees, or takers in default of appointment must disclaim within a 9-month period after the original transfer
that created or authorized the creation of the power. If the transfer is for the life of an income beneficiary with succeeding
interests to other persons, both the life tenant and the other remaindermen, whether their interests are vested or
contingent, must disclaim no later than 9 months after the original transfer creating an interest. In the case of a remainder
interest in property which an executor elects to treat as qualified terminable interest property under section 2056(b)(7), the
remainderman must disclaim within 9 months of the transfer creating the interest, rather than 9 months from the date such
interest is subject to tax under section 2044 or 2519. A person who receives an interest in property as the result of a
qualified disclaimer of the interest must disclaim the previously disclaimed interest no later than 9 months after the date of
the transfer creating the interest in the preceding disclaimant. Thus, if A were to make a qualified disclaimer of a specific
bequest and as a result of the qualified disclaimer the property passed as part of the residue, the beneficiary of the residue
could make a qualified disclaimer no later than 9 months after the date of the testator's death. See paragraph (d)(3) of this
section for the time limitation rule with reference to recipients who are under 21 years of age.
(ii) Sentences 1 through 10 and 12 of paragraph (c)(3)(i) of this section are applicable for transfers creating the
interest to be disclaimed made on or after December 31, 1997.
(4) Joint property—(i) Interests in joint tenancy with right of survivorship or tenancies by the entirety. Except as
provided in paragraph (c)(4)(iii) of this section (with respect to joint bank, brokerage, and other investment accounts), in
the case of an interest in a joint tenancy with right of survivorship or a tenancy by the entirety, a qualified disclaimer of the
interest to which the disclaimant succeeds upon creation of the tenancy must be made no later than 9 months after the
creation of the tenancy regardless of whether such interest can be unilaterally severed under local law. A qualified
disclaimer of the survivorship interest to which the survivor succeeds by operation of law upon the death of the first joint
tenant to die must be made no later than 9 months after the death of the first joint tenant to die regardless of whether such
interest can be unilaterally severed under local law and, except as provided in paragraph (c)(4)(ii) of this section (with
respect to certain tenancies created on or after July 14, 1988), such interest is deemed to be a one-half interest in the
property. (See, however, section 2518(b)(2)(B) for a special rule in the case of disclaimers by persons under age 21.) This
is the case regardless of the portion of the property attributable to consideration furnished by the disclaimant and
regardless of the portion of the property that is included in the decedent's gross estate under section 2040 and regardless
of whether the interest can be unilaterally severed under local law. See paragraph (c)(5), Examples (7) and (8), of this
section.
(ii) Certain tenancies in real property between spouses created on or after July 14, 1988. In the case of a joint tenancy
between spouses or a tenancy by the entirety in real property created on or after July 14, 1988, to which section 2523(i)(3)
applies (relating to the creation of a tenancy where the spouse of the donor is not a United States citizen), the surviving
spouse may disclaim any portion of the joint interest that is includible in the decedent's gross estate under section 2040.
See paragraph (c)(5), Example (9), of this section.
(iii) Special rule for joint bank, brokerage, and other investment accounts (e.g., accounts held at mutual funds)
established between spouses or between persons other than husband and wife. In the case of a transfer to a joint bank,
brokerage, or other investment account (e.g., an account held at a mutual fund), if a transferor may unilaterally regain the
transferor's own contributions to the account without the consent of the other cotenant, such that the transfer is not a
completed gift under §25.2511-1(h)(4), the transfer creating the survivor's interest in the decedent's share of the account
occurs on the death of the deceased cotenant. Accordingly, if a surviving joint tenant desires to make a qualified
disclaimer with respect to funds contributed by a deceased cotenant, the disclaimer must be made within 9 months of the
cotenant's death. The surviving joint tenant may not disclaim any portion of the joint account attributable to consideration
furnished by that surviving joint tenant. See paragraph (c)(5), Examples (12), (13), and (14), of this section, regarding the
treatment of disclaimed interests under sections 2518, 2033 and 2040.
(iv) Effective date. This paragraph (c)(4) is applicable for disclaimers made on or after December 31, 1997.
(5) Examples. The provisions of paragraphs (c)(1) through (c)(4) of this section may be illustrated by the following
examples. For purposes of the following examples, assume that all beneficiaries are over 21 years of age.
Example (1). On May 13, 1978, in a transfer which constitutes a completed gift for Federal gift tax purposes, A creates a trust in
which B is given a lifetime interest in the income from the trust. B is also given a nongeneral testamentary power of appointment over
the corpus of the trust. The power of appointment may be exercised in favor of any of the issue of A and B. If there are no surviving
issue at B's death or if the power is not exercised, the corpus is to pass to E. On May 13, 1978, A and B have two surviving children,
C and D. If A, B, C or D wishes to make a qualified disclaimer, the disclaimer must be made no later than 9 months after May 13,
1978.
Example (2). Assume the same facts as in example (1) except that B is given a general power of appointment over the corpus of
the trust. B exercises the general power of appointment in favor of C upon B's death on June 17, 1989. C may make a qualified
disclaimer no later than 9 months after June 17, 1989. If B had died without exercising the general power of appointment, E could
have made a qualified disclaimer no later than 9 months after June 17, 1989.

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Example (3). F creates a trust on April 1, 1978, in which F's child G is to receive the income from the trust for life. Upon G's
death, the corpus of the trust is to pass to G's child H. If either G or H wishes to make a qualified disclaimer, it must be made no later
than 9 months after April 1, 1978.
Example (4). A creates a trust on February 15, 1978, in which B is named the income beneficiary for life. The trust further
provides that upon B's death the proceeds of the trust are to pass to C, if then living. If C predeceases D, the proceeds shall pass to
D or D's estate. To have timely disclaimers for purposes of section 2518, B, C, and D must disclaim their respective interests no later
than 9 months after February 15, 1978.
Example (5). A, a resident of State Q, dies on January 10, 1979, devising certain real property to B. The disclaimer laws of State
Q require that a disclaimer be made within a reasonable time after a transfer. B disclaims the entire interest in real property on
November 10, 1979. Although B's disclaimer may be effective under State Q law, it is not a qualified disclaimer under section 2518
because the disclaimer was made later than 9 months after the taxable transfer to B.
Example (6). A creates a revocable trust on June 1, 1980, in which B and C are given the income interest for life. Upon the
death of the last income beneficiary, the remainder interest is to pass to D. The creation of the trust is not a completed gift for
Federal gift tax purposes, but each distribution of trust income to B and C is a completed gift at the date of distribution. B and C must
disclaim each income distribution no later than 9 months after the date of the particular distribution. In order to disclaim an income
distribution in the form of a check, the recipient must return the check to the trustee uncashed along with a written disclaimer. A dies
on September 1, 1982, causing the trust to become irrevocable, and the trust corpus is includible in A's gross estate for Federal
estate tax purposes under section 2038. If B or C wishes to make a qualified disclaimer of his income interest, he must do so no later
than 9 months after September 1, 1982. If D wishes to make a qualified disclaimer of his remainder interest, he must do so no later
than 9 months after September 1, 1982.
Example (7). On February 1, 1990, A purchased real property with A's funds. Title to the property was conveyed to “A and B, as
joint tenants with right of survivorship.” Under applicable state law, the joint interest is unilaterally severable by either tenant. B dies
on May 1, 1998, and is survived by A. On January 1, 1999, A disclaims the one-half survivorship interest in the property to which A
succeeds as a result of B's death. Assuming that the other requirements of section 2518(b) are satisfied, A has made a qualified
disclaimer of the one-half survivorship interest (but not the interest retained by A upon the creation of the tenancy, which may not be
disclaimed by A). The result is the same whether or not A and B are married and regardless of the proportion of consideration
furnished by A and B in purchasing the property.
Example (8). Assume the same facts as in Example (7) except that A and B are married and title to the property was conveyed
to “A and B, as tenants by the entirety.” Under applicable state law, the tenancy cannot be unilaterally severed by either tenant.
Assuming that the other requirements of section 2518(b) are satisfied, A has made a qualified disclaimer of the one-half survivorship
interest (but not the interest retained by A upon the creation of the tenancy, which may not be disclaimed by A). The result is the
same regardless of the proportion of consideration furnished by A and B in purchasing the property.
Example (9). On March 1, 1989, H and W purchase a tract of vacant land which is conveyed to them as tenants by the entirety.
The entire consideration is paid by H. W is not a United States citizen. H dies on June 1, 1998. W can disclaim the entire joint
interest because this is the interest includible in H's gross estate under section 2040(a). Assuming that W's disclaimer is received by
the executor of H's estate no later than 9 months after June 1, 1998, and the other requirements of section 2518(b) are satisfied, W's
disclaimer of the property would be a qualified disclaimer. The result would be the same if the property was held in joint tenancy with
right of survivorship that was unilaterally severable under local law.
Example (10). In 1986, spouses A and B purchased a personal residence taking title as tenants by the entirety. B dies on July
10, 1998. A wishes to disclaim the one-half undivided interest to which A would succeed by right of survivorship. If A makes the
disclaimer, the property interest would pass under B's will to their child C. C, an adult, and A resided in the residence at B's death
and will continue to reside there in the future. A continues to own a one-half undivided interest in the property. Assuming that the
other requirements of section 2518(b) are satisfied, A may make a qualified disclaimer with respect to the one-half undivided
survivorship interest in the residence if A delivers the written disclaimer to the personal representative of B's estate by April 10, 1999,
since A is not deemed to have accepted the interest or any of its benefits prior to that time and A's occupancy of the residence after
B's death is consistent with A's retained undivided ownership interest. The result would be the same if the property was held in joint
tenancy with right of survivorship that was unilaterally severable under local law.
Example (11). H and W, husband and wife, reside in state X, a community property state. On April 1, 1978, H and W purchase
real property with community funds. The property is not held by H and W as jointly owned property with rights of survivorship. H and
W hold the property until January 3, 1985, when H dies. H devises his portion of the property to W. On March 15, 1985, W disclaims
the portion of the property devised to her by H. Assuming all the other requirements of section 2518 (b) have been met, W has made
a qualified disclaimer of the interest devised to her by H. However, W could not disclaim the interest in the property that she acquired
on April 1, 1978.
Example (12). On July 1, 1990, A opens a bank account that is held jointly with B, A's spouse, and transfers $50,000 of A's
money to the account. A and B are United States citizens. A can regain the entire account without B's consent, such that the transfer
is not a completed gift under §25.2511-1(h)(4). A dies on August 15, 1998, and B disclaims the entire amount in the bank account on
October 15, 1998. Assuming that the remaining requirements of section 2518(b) are satisfied, B made a qualified disclaimer under
section 2518(a) because the disclaimer was made within 9 months after A's death at which time B had succeeded to full dominion
and control over the account. Under state law, B is treated as predeceasing A with respect to the disclaimed interest. The disclaimed
account balance passes through A's probate estate and is no longer joint property includible in A's gross estate under section 2040.
The entire account is, instead, includible in A's gross estate under section 2033. The result would be the same if A and B were not
married.
Example (13). The facts are the same as Example (12), except that B, rather than A, dies on August 15, 1998. A may not make
a qualified disclaimer with respect to any of the funds in the bank account, because A furnished the funds for the entire account and
A did not relinquish dominion and control over the funds.

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Example (14). The facts are the same as Example (12), except that B disclaims 40 percent of the funds in the account. Since,
under state law, B is treated as predeceasing A with respect to the disclaimed interest, the 40 percent portion of the account balance
that was disclaimed passes as part of A's probate estate, and is no longer characterized as joint property. This 40 percent portion of
the account balance is, therefore, includible in A's gross estate under section 2033. The remaining 60 percent of the account
balance that was not disclaimed retains its character as joint property and, therefore, is includible in A's gross estate as provided in
section 2040(b). Therefore, 30 percent ( 1⁄2 × 60 percent) of the account balance is includible in A's gross estate under section 2040
(b), and a total of 70 percent of the aggregate account balance is includible in A's gross estate. If A and B were not married, then the
40 percent portion of the account subject to the disclaimer would be includible in A's gross estate as provided in section 2033 and
the 60 percent portion of the account not subject to the disclaimer would be includible in A's gross estate as provided in section 2040
(a), because A furnished all of the funds with respect to the account.

(d) No acceptance of benefits—(1) Acceptance. A qualified disclaimer cannot be made with respect to an interest in
property if the disclaimant has accepted the interest or any of its benefits, expressly or impliedly, prior to making the
disclaimer. Acceptance is manifested by an affirmative act which is consistent with ownership of the interest in property.
Acts indicative of acceptance include using the property or the interest in property; accepting dividends, interest, or rents
from the property; and directing others to act with respect to the property or interest in property. However, merely taking
delivery of an instrument of title, without more, does not constitute acceptance. Moreover, a disclaimant is not considered
to have accepted property merely because under applicable local law title to the property vests immediately in the
disclaimant upon the death of a decedent. The acceptance of one interest in property will not, by itself, constitute an
acceptance of any other separate interests created by the transferor and held by the disclaimant in the same property. In
the case of residential property, held in joint tenancy by some or all of the residents, a joint tenant will not be considered to
have accepted the joint interest merely because the tenant resided on the property prior to disclaiming his interest in the
property. The exercise of a power of appointment to any extent by the donee of the power is an acceptance of its benefits.
In addition, the acceptance of any consideration in return for making the disclaimer is an acceptance of the benefits of the
entire interest disclaimed.
(2) Fiduciaries. If a beneficiary who disclaims an interest in property is also a fiduciary, actions taken by such person
in the exercise of fiduciary powers to preserve or maintain the disclaimed property shall not be treated as an acceptance
of such property or any of its benefits. Under this rule, for example, an executor who is also a beneficiary may direct the
harvesting of a crop or the general maintenance of a home. A fiduciary, however, cannot retain a wholly discretionary
power to direct the enjoyment of the disclaimed interest. For example, a fiduciary's disclaimer of a beneficial interest does
not meet the requirements of a qualified disclaimer if the fiduciary exercised or retains a discretionary power to allocate
enjoyment of that interest among members of a designated class. See paragraph (e) of this section for rules relating to the
effect of directing the redistribution of disclaimed property.
(3) Under 21 years of age. A beneficiary who is under 21 years of age has until 9 months after his twenty-first birthday
in which to make a qualified disclaimer of his interest in property. Any actions taken with regard to an interest in property
by a beneficiary or a custodian prior to the beneficiary's twenty-first birthday will not be an acceptance by the beneficiary of
the interest.
(4) Examples. The provisions of paragraphs (d) (1), (2) and (3) of this section may be illustrated by the following
examples:
Example (1). On April 9, 1977, A established a trust for the benefit of B, then age 22. Under the terms of the trust, the current
income of the trust is to be paid quarterly to B. Additionally, one half the principal is to be distributed to B when B attains the age of
30 years. The balance of the principal is to be distributed to B when B attains the age of 40 years. Pursuant to the terms of the trust,
B received a distribution of income on June 30, 1977. On August 1, 1977, B disclaimed B's right to receive both the income from the
trust and the principal of the trust, B's disclaimer of the income interest is not a qualified disclaimer for purposes of section 2518(a)
because B accepted income prior to making the disclaimer. B's disclaimer of the principal, however, does satisfy section 2518(b)(3).
See also §25.2518-3 for rules relating to the disclaimer of less than an entire interest in property.
Example (2). B is the recipient of certain property devised to B under the will of A. The will stated that any disclaimed property
was to pass to C. B and C entered into negotiations in which it was decided that B would disclaim all interest in the real property that
was devised to B. In exchange, C promised to let B live in the family home for life. B's disclaimer is not a qualified disclaimer for
purposes of section 2518(a) because B accepted consideration for making the disclaimer.
Example (3). A received a gift of Blackacre on December 25, 1978. A never resided on Blackacre but when property taxes on
Blackacre became due on July 1, 1979, A paid them out personal funds. On August 15, 1979, A disclaimed the gift of Blackacre.
Assuming all the requirements of section 2518 (b) have been met, A has made a qualified disclaimer of Blackacre. Merely paying the
property taxes does not constitute an acceptance of Blackacre even though A's personal funds were used to pay the taxes.
Example (4). A died on February 15, 1978. Pursuant to A's will, B received a farm in State Z. B requested the executor to sell
the farm and to give the proceeds to B. The executor then sold the farm pursuant to B's request. B then disclaimed $50,000 of the
proceeds from the sale of the farm. B's disclaimer is not a qualified disclaimer. By requesting the executor to sell the farm B
accepted the farm even though the executor may not have been legally obligated to comply with B's request. See also §25.2518-3
for rules relating to the disclaimer of less than an entire interest in property.
Example (5). Assume the same facts as in example (4) except that instead of requesting the executor to sell the farm, B pledged
the farm as security for a short-term loan which was paid off prior to distribution of the estate. B then disclaimed his interest in the
farm. B's disclaimer is not a qualified disclaimer. By pledging the farm as security for the loan, B accepted the farm.
Example (6). A delivered 1,000 shares of stock in Corporation X to B as a gift on February 1, 1980. A had the shares registered
in B's name on that date. On April 1, 1980, B disclaimed the interest in the 1,000 shares. Prior to making the disclaimer, B did not

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pledge the shares, accept any dividends or otherwise commit any acts indicative of acceptance. Assuming the remaining
requirements of section 2518 are satisfied, B's disclaimer is a qualified disclaimer.
Example (7). On January 1, 1980, A created an irrevocable trust in which B was given a testamentary general power of
appointment over the trust's corpus. B executed a will on June 1, 1980, in which B provided for the exercise of the power of
appointment. On September 1, 1980, B disclaimed the testamentary power of appointment. Assuming the remaining requirements of
section 2518 (b) are satisfied, B's disclaimer of the testamentary power of appointment is a qualified disclaimer.
Example (8). H and W reside in X, a community property state. On January 1, 1981, H and W purchase a residence with
community funds. They continue to reside in the house until H dies testate on February 1, 1990. Although H could devise his portion
of the residence to any person, H devised his portion of the residence to W. On September 1, 1990, W disclaims the portion of the
residence devised to her pursuant to H's will but continues to live in the residence. Assuming the remaining requirements of section
2518(b) are satisfied, W's disclaimer is a qualified disclaimer under section 2518 (a). W's continued occupancy of the house prior to
making the disclaimer will not by itself be treated as an acceptance of the benefits of the portion of the residence devised to her by
H.
Example (9). In 1979, D established a trust for the benefit of D's minor children E and F. Under the terms of the trust, the trustee
is given the power to make discretionary distributions of current income and corpus to both children. The corpus of the trust is to be
distributed equally between E and F when E becomes 35 years of age. Prior to attaining the age of 21 years on April 8, 1982, E
receives several distributions of income from the trust. E receives no distributions of income between April 8, 1982 and August 15,
1982, which is the date on which E disclaims all interest in the income from the trust. As a result of the disclaimer the income will be
distributed to F. If the remaining requirements of section 2518 are met, E's disclaimer is a qualified disclaimer under section 2518(a).
To have a qualified disclaimer of the interest in corpus, E must disclaim the interest no later than 9 months after April 8, 1982, E's
21st birthday.
Example (10). Assume the same facts as in example (9) except that E accepted a distribution of income on May 13, 1982. E's
disclaimer is not a qualified disclaimer under section 2518 because by accepting an income distribution after attaining the age of 21,
E accepted benefits from the income interest.
Example (11). F made a gift of 10 shares of stock to G as custodian for H under the State X Uniform Gifts to Minors Act. At the
time of the gift, H was 15 years old. At age 18, the local age of majority, the 10 shares were delivered to and registered in the name
of H. Between the receipt of the shares and H's 21st birthday, H received dividends from the shares. Within 9 months of attaining
age 21, H disclaimed the 10 shares. Assuming H did not accept any dividends from the shares after attaining age 21, the disclaimer
by H is a qualified disclaimer under section 2518.

(e) Passage without direction by the disclaimant of beneficial enjoyment of disclaimed interest—(1) In general. A
disclaimer is not a qualified disclaimer unless the disclaimed interest passes without any direction on the part of the
disclaimant to a person other than the disclaimant (except as provided in paragraph (e)(2) of this section). If there is an
express or implied agreement that the disclaimed interest in property is to be given or bequeathed to a person specified by
the disclaimant, the disclaimant shall be treated as directing the transfer of the property interest. The requirements of a
qualified disclaimer under section 2518 are not satisfied if—
(i) The disclaimant, either alone or in conjunction with another, directs the redistribution or transfer of the property or
interest in property to another person (or has the power to direct the redistribution or transfer of the property or interest in
property to another person unless such power is limited by an ascertainable standard); or
(ii) The disclaimed property or interest in property passes to or for the benefit of the disclaimant as a result of the
disclaimer (except as provided in paragraph (e)(2) of this section).
If a power of appointment is disclaimed, the requirements of this paragraph (e)(1) are satisfied so long as there is no
direction on the part of the disclaimant with respect to the transfer of the interest subject to the power or with respect to the
transfer of the power to another person. A person may make a qualified disclaimer of a beneficial interest in property even
if after such disclaimer the disclaimant has a fiduciary power to distribute to designated beneficiaries, but only if the power
is subject to an ascertainable standard. See examples (11) and (12) of paragraph (e)(5) of this section.
(2) Disclaimer by surviving spouse. In the case of a disclaimer made by a decedent's surviving spouse with respect to
property transferred by the decedent, the disclaimer satisfies the requirements of this paragraph (e) if the interest passes
as a result of the disclaimer without direction on the part of the surviving spouse either to the surviving spouse or to
another person. If the surviving spouse, however, retains the right to direct the beneficial enjoyment of the disclaimed
property in a transfer that is not subject to Federal estate and gift tax (whether as trustee or otherwise), such spouse will
be treated as directing the beneficial enjoyment of the disclaimed property, unless such power is limited by an
ascertainable standard. See examples (4), (5), and (6) in paragraph (e)(5) of this section.
(3) Partial failure of disclaimer. If a disclaimer made by a person other than the surviving spouse is not effective to
pass completely an interest in property to a person other than the disclaimant because—
(i) The disclaimant also has a right to receive such property as an heir at law, residuary beneficiary, or by any other
means; and
(ii) The disclaimant does not effectively disclaim these rights, the disclaimer is not a qualified disclaimer with respect
to the portion of the disclaimed property which the disclaimant has a right to receive. If the portion of the disclaimed
interest in property which the disclaimant has a right to receive is not severable property or an undivided portion of the
property, then the disclaimer is not a qualified disclaimer with respect to any portion of the property. Thus, for example, if a

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disclaimant who is not a surviving spouse receives a specific bequest of a fee simple interest in property and as a result of
the disclaimer of the entire interest, the property passes to a trust in which the disclaimant has a remainder interest, then
the disclaimer will not be a qualified disclaimer unless the remainder interest in the property is also disclaimed. See
§25.2518-3 (a)(1)(ii) for the definition of severable property.
(4) Effect of precatory language. Precatory language in a disclaimer naming takers of disclaimed property will not be
considered as directing the redistribution or transfer of the property or interest in property to such persons if the applicable
State law gives the language no legal effect.
(5) Examples. The provisions of this paragraph (e) may be illustrated by the following examples:
Example (1). A, a resident of State X, died on July 30, 1978. Pursuant to A's will, B, A's son and heir at law, received the family
home. In addition, B and C each received 50 percent of A's residuary estate. B disclaimed the home. A's will made no provision for
the distribution of property in the case of a beneficiary's disclaimer. Therefore, pursuant to the disclaimer laws of State X, the
disclaimed property became part of the residuary estate. Because B's 50 percent share of the residuary estate will be increased by
50 percent of the value of the family home, the disclaimed property will not pass solely to another person. Consequently, B's
disclaimer of the family home is a qualified disclaimer only with respect to the 50 percent portion that passes solely to C. Had B also
disclaimed B's 50 percent interest in the residuary estate, the disclaimer would have been a qualified disclaimer under section 2518
of the entire interest in the home (assuming the remaining requirements of a qualified disclaimer were satisfied). Similarly, if under
the laws of State X, the disclaimer has the effect of divesting B of all interest in the home, both as devisee and as a beneficiary of the
residuary estate, including any property resulting from its sale, the disclaimer would be a qualified disclaimer of B's entire interest in
the home.
Example (2). D, a resident of State Y, died testate on June 30, 1978. E, an heir at law of D, received specific bequests of certain
severable personal property from D. E disclaimed the property transferred by D under the will. The will made no provision for the
distribution of property in the case of a beneficiary's disclaimer. The disclaimer laws of State Y provide that such property shall pass
to the decedent's heirs at law in the same manner as if the disclaiming beneficiary had died immediately before the testator's death.
Because State Y's law treats E as predeceasing D, the property disclaimed by E does not pass to E as an heir at law or otherwise.
Consequently, if the remaining requirements of section 2518(b) are satisfied, E's disclaimer is a qualified disclaimer under section
2518(a).
Example (3). Assume the same facts as in example (2) except that State Y has no provision treating the disclaimant as
predeceasing the testator. E's disclaimer satisfies section 2518 (b)(4) only to the extent that E does not have a right to receive the
property as an heir at law. Had E disclaimed both the share E received under D's will and E's intestate share, the requirement of
section 2518 (b)(4) would have been satisfied.
Example (4). B died testate on February 13, 1980. B's will established both a marital trust and a nonmarital trust. The decedent's
surviving spouse, A, is an income beneficiary of the marital trust and has a testamentary general power of appointment over its
assets. A is also an income beneficiary of the nonmarital trust, but has no power to appoint or invade the corpus. The provisions of
the will specify that any portion of the marital trust disclaimed is to be added to the nonmarital trust. A disclaimed 30 percent of the
marital trust. (See §25.2518-3 (b) for rules relating to the disclaimer of an undivided portion of an interest in property.) Pursuant to
the will, this portion of the marital trust property was transferred to the nonmarital trust without any direction on the part of A. This
disclaimer by A satisfies section 2518 (b)(4).
Example (5). Assume the same facts as in example (4) except that A, the surviving spouse, has both an income interest in the
nonmarital trust and a testamentary nongeneral power to appoint among designated beneficiaries. This power is not limited by an
ascertainable standard. The requirements of section 2518 (b)(4) are not satisfied unless A also disclaims the nongeneral power to
appoint the portion of the trust corpus that is attributable to the property that passed to the nonmarital trust as a result of A's
disclaimer. Assuming that the fair market value of the disclaimed property on the date of the disclaimer is $250,000 and that the fair
market value of the nonmarital trust (including the disclaimed property) immediately after the disclaimer is $750,000, A must disclaim
the power to appoint one-third of the nonmarital trust's corpus. The result is the same regardless of whether the nongeneral power is
testamentary or inter vivos.
Example (6). Assume the same facts as in example (4) except that A has both an income interest in the nonmarital trust and a
power to invade corpus if needed for A's health or maintenance. In addition, an independent trustee has power to distribute to A any
portion of the corpus which the trustee determines to be desirable for A's happiness. Assuming the other requirements of section
2518 are satisfied. A may make a qualified disclaimer of interests in the marital trust without disclaiming any of A's interests in the
nonmarital trust.
Example (7). B died testate on June 1, 1980. B's will created both a marital trust and a nonmarital trust. The decedent's
surviving spouse, C, is an income beneficiary of the marital trust and has a testamentary general power of appointment over its
assets. C is an income beneficiary of the nonmarital trust, and additionally has the noncumulative right to withdraw yearly the greater
of $5,000 or 5 percent of the aggregate value of the principal. The provisions of the will specify that any portion of the marital trust
disclaimed is to be added to the nonmarital trust. C disclaims 50 percent of the marital trust corpus. Pursuant to the will, this amount
is transferred to the nonmarital trust. Assuming the remaining requirements of section 2518(b) are satisfied, C's disclaimer is a
qualified disclaimer.
Example (8). A, a resident of State X, died on July 19, 1979. A was survived by a spouse B, and three children, C, D, and E.
Pursuant to A's will, B received one-half of A's estate and the children received equal shares of the remaining one-half of the estate.
B disclaimed the entire interest B had received. The will made no provisions for the distribution of property in the case of a
beneficiary's disclaimer. The disclaimer laws of State X provide that under these circumstances disclaimed property passes to the
decedent's heirs at law in the same manner as if the disclaiming beneficiary had died immediately before the testator's death. As a
result, C, D, and E are A's only remaining heirs at law, and will divide the disclaimed property equally among themselves. B's
disclaimer includes language stating that “it is my intention that C, D, and E will share equally in the division of this property as a
result of my disclaimer.” State X considers these to be precatory words and gives them no legal effect. B's disclaimer meets all other

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