Jackie O's Will and a Disclaimer Issue
Yesterday I spent the day at this all-day IICLE seminar on Illinois Estate Administration. I learned a lot from all of the speakers, but I especially enjoyed David A. Handler's presentation on disclaimers. I've blogged about disclaimers in the past, and consider them a great (post-mortem) estate planning tool.
One of the elements needed for a valid disclaimer under ยง 2518 of the Internal Revenue Code is that "as a result of [the disclaimer], the [disclaimed] interest passes without any direction on the part of the person making the disclaimer."
Mr. Handler addressed this issue by reference to the estate of Jacqueline Kennedy Onassis. Mrs. Onassis's Will (which can be found here) specifically allows her children to disclaim certain property that might pass to them. Disclaimed property then flows to her residuary estate, where (under Article FIFTH) it is held as The J Foundation. The issue is this: Mrs. Onassis's children did not disclaim, but if they had, and were also involved in the administration of The J Foundation, wouldn't their disclaimer be invalid? After all, they would still have been involved in directing how the disclaimed property would pass.
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