The estate planner’s toolbox is full of elaborate and innovative mechanisms, but the “plain old” qualified disclaimer remains an important and useful technique. With a qualified disclaimer, anyone receiving an interest in property can refuse to accept that interest, thus allowing it to pass to someone else.

At first glance, the qualified disclaimer may seem too simple to be an effective tool. But it has many uses in various situations. For example: a qualified disclaimer can be used to:

Equalize the estates of spouses, thus allowing them to maximize their unified credits and marital deductions.

Take advantage of another beneficiary’s lower income tax bracket.

Correct careless IRA beneficiary designations, as in IRS Private Letter Ruling 199913048, where through a series of disclaimers, a woman was able to rollover her husband’s IRA into her own though he had named a trust as the beneficiary of his IRA.

Remember: though a qualified disclaimer is a comparatively simple financial tool, it still requires careful planning to avoid undesired tax consequences.