Qualified Disclaimers and Disclaimer Trusts after Tax Reform

Using Disclaimers, Clayton QTIPs and OBITs to Optimize Basis Increase; Maximize Flexibility for the 2026 "Cliff and"Stretch" for IRA See-Through Trusts

Recording of a 90-minute CLE/CPE webinar with Q&A

Conducted on Wednesday, February 21, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE/CPE webinar will provide a comprehensive guide to both planning opportunities and post-mortem “fixes” through proactive use of qualified disclaimers. Ed will offer suggestions for structuring joint accounts, beneficiary designations, disclaimer funded bypass or optimal basis increase trusts, Clayton QTIPs and formula powers of appointment to be "disclaimer-friendly", and using qualified disclaimers to fix estate plans, including when qualified plan benefits are made payable to trusts that may not otherwise be optimized for maximum tax deferral.


Understanding the opportunities afforded by disclaimer planning is doubly important now after the Tax Cuts and Jobs Act with the increase in estate/gift/GST tax exemption (and the potential 2026 "cliff"). Disclaimer-funded trusts and Clayton QTIPs offer important post-mortem tax flexibility - but are we properly planning for the optimal result once that decision is made? Ed will explore important differences between these two techniques and when they may even be used together.

Estate planners can maximize flexibility and, in many cases, tax deferral by properly using disclaimers as a component of spousal estate plans. Sometimes, even non-qualified disclaimers should be considered. Moreover, with increased focus on basis, many planners miss the non-intuitive situations in which qualified disclaimers by surviving spouses can actually increase the cost basis of assets at the first decedent’s death beyond what would be available without such disclaimer planning.

When used with optional basis increase trusts (OBITs), disclaimers provide a powerful income tax savings tool for estate planners.

The first portion of the webinar will review the important basics of qualified disclaimers, special rules for spouses and Clayton QTIPs, then will provide a comprehensive and practical guide to disclaimer trust planning, post-mortem tax and asset protection planning and maximizing the benefits of formula powers of appointment and see-through trusts.



  1. Review of IRC §2518 and regulation requirements regarding “qualified disclaimers”
  2. Clayton QTIP
  3. Comparing, contrasting and synthesizing disclaimer and Clayton QTIP planning
  4. Cascading spousal disclaimers
  5. Using qualified spousal disclaimers to increase basis at death of 1st spouse to die
  6. Unique features of optimal basis increase trusts vis a vis qualified disclaimers
  7. Proactive planning—begin with the ends in mind by setting up contingent beneficiaries
  8. Post-mortem “fixes” via disclaimer
  9. Post-mortem “fixes” to IRA “see through trusts” via disclaimer
  10. Contrasting non-qualified disclaimers and releases - when these "work" as well
  11. Asset protection impact of disclaimers - overlooked holes in protection
  12. Drafting tools and traps to avoid


Ed will review these and other key issues:

  • Circumstances where a disclaimer trust and/or Clayton QTIP is an advantageous alternative and when they should be avoided
  • Coordinating disclaimers with optimal basis increase trusts (OBITs) to overcome drawbacks of bypass trusts and traditional disclaimer funding
  • Issues and opportunities with large qualified plans and IRAs
  • Asset protection issues that arise


Morrow, Edwin
Edwin P. Morrow, III, J.D., LL.M. (Tax), MBA, CFP, CM&AA

Regional Wealth Strategist
U.S. Bank Private Wealth Management

Mr. Morrow is currently a regional wealth strategist for U.S. Bank Private Wealth Management based in Cincinnati, Ohio...  |  Read More

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