[WSBAPT] Fwd: [elder-law-section] "Disclaimer" of POD and TOD Designation

[Roger Hawkes]

I had a life insurance case once in which the contract passed the proceeds to the 'next of kin'; so the choice of law provision became very important.

Roger Hawkes, WSBA # 5173
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Doug Schafer
Sent: Wednesday, July 14, 2021 11:28 AM
To: Elder Law Section listserv <elder-law-section at list.wsba.org>; WSBA RPPT Probate & Trust Discussion Forum <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Fwd: [elder-law-section] "Disclaimer" of POD and TOD Designation


The terms of the customer account or insurance policy almost certainly would provide that absent a named beneficiary, the funds would pass to the estate of the deceased account/policy owner. So it the bank, investment firm, or insurer recognizes the beneficiary's disclaimer, then the funds would pass to the decedemt's estate.

Doug Schafer, in Tacoma

-------- Forwarded Message --------
Subject:
Re: [elder-law-section] "Disclaimer" of POD and TOD Designation
Date:
Wed, 14 Jul 2021 11:21:01 -0700
From:
Schafer <schafer at pobox.com><mailto:schafer at pobox.com>
Reply-To:
Doug Schafer <schafer at pobox.com><mailto:schafer at pobox.com>
To:
Elder Law Section <elder-law-section at list.wsba.org><mailto:elder-law-section at list.wsba.org>

Issue 1: would the disclaimer be a fraudulent transfer (fraud on a creditor)?  Perhaps not. See 9th Circuit opinion:
https://www.centraldistrictinsider.com/2019/12/08/disclaimer-of-inheritance-not-a-fraudulent-transfer-under-section-548-but/

Issue 2: would the disclaimer that results in the disclaimant receiving/benefiting from the disclaimed funds be a "qualified disclaimer"?  Likely not, but are there any actual tax issues of consequence?

Doug Schafer, in Tacoma.
On 7/14/2021 11:06, Jim Dolan wrote:

Colleagues:

Personal Representative of Mom's estate has a question: if the TOD/POD Beneficiary of a bank or investment account or life insurance policy refuses to accept the funds, and there is no secondary Beneficiary, does the money then go to the estate, or will the money sit in the account indefinitely (or get sent to DOR unclaimed funds)?

But wait . . .  there's more.  The Beneficiary who wants to "disclaim" the TOD/POD funds also is the Beneficiary of a testamentary Spendthrift Trust in deceased Mom's LWT, evidently put into her LWT so Beneficiary son would not be exposed to creditors from a long ago hospitalization (current debt $40K).    In other words, can he refuse the funds outright to force them to go through the estate in order to take advantage of the Spendthrift Trust?  The backstory is that Mom purportedly clearly wanted to have her assets distributed to the Spendthrift Trust, but failed to change her Beneficiary designations on her accounts.

Thanks for your thoughts.

Jim Dolan

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