According to non-testamentary trust agreement, after the death of B, the next person in line receives distributions at ages 30 and 35. When ...

Question

According to non-testamentary trust agreement, after the death of B, the next person in line receives distributions at ages 30 and 35. When B disclaims, what is "the event determining that the taker of the property or interest had become finally ascertained and the taker's interest is vested" referred to in NJ statute 3B:9-8 (Effect of disclaimer) paragraph b2?

Answer

The effective disclaimer is to treat the disclaiming party as if that party died prior to the decedent. The amount of money that goes to the next in line is not considered a gift that the disclaimer is correct and within 9 months.

I hope this helps!

Ron Cappuccio

Answer

I essentially agree with Ron that the effect of the disclaimer is to acknowledge that the next to take as provided in the document or by law, as if the person disclaiming had predeceased the entitlement, is now entitled to receive the benefits. For example, if the document provided that a person would become entitled to receive benefits at a particular age, and that person disclaimed his entitlement, his heirs or the person to take if the disclaiming person died before becoming entitled, would now be entitled to the benefits. However, this might not accelerate the distribution of benefits if the next in line has not attained the distribution age. As to this, the statute reads: (3)Notwithstanding the foregoing, a future interest that is held by the disclaimant who also holds the present interest and which takes effect at a time certain, such as a fixed calendar date or the disclaimant's attainment of a certain age, is not accelerated by the disclaimer and continues to take effect at the time certain.