Section 93.141. Disclaimers of nonprobate taxable assets

(a) Scope and application. Subsection (c) sets forth specific criteria the Department will utilize to determine whether a disclaimer executed in regard to either nonprobate taxable assets or nontrust assets of a decedent is valid for Inheritance Tax purposes, when the disclaimer is made by the disclaiming party, or the personal representative of a deceased individual, or the guardian or attorney-in-fact of an incapacitated person or minor to whom the interest would devolve, absent a disclaimer.

(b) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:

Disclaimant—Any party in an individual capacity, or a personal representative on behalf of a deceased individual, or a guardian or attorney-in-fact on behalf of an incapacitated person or a minor who renounces or refuses to accept a transfer of property.

Disclaimer—A signed renunciation or refusal to accept an interest in property that describes the interest disclaimed. The disclaimer may disclaim, in whole or in part, any present or future interest, vested or contingent, including a possible future right to take as an appointee under an unexercised power of appointment or under a discretionary power to distribute income or principal.

Nonprobate taxable asset—Property transferred upon a decedent’s death that is subject to Inheritance Tax but is not subject to administration by the personal representative of the decedent’s estate.

(c) Conditions. Disclaimers of nonprobate taxable assets, including rights of survivorship interests in multiple-party accounts, titled tangible personal property or real estate, beneficial interests in third-party beneficiary contracts (that is, retirement benefit plans, annuity contracts, individual retirement accounts, Keogh Plan proceeds, matured endowment insurance policies and certain out-of-State government lottery contracts) and intervivos gifts are valid for Inheritance Tax purposes if the following conditions are met:

(1) The disclaimer is made by a disclaimant.

(2) The disclaimer is in writing and satisfies 20 Pa.C.S. Chapter 62 (relating to disclaimers).

(3) The disclaimer is signed and dated by the disclaimant.

(d) Filing.

(1) When the will of the decedent authorizes the personal representative to make a disclaimer on behalf of a decedent without court authorization, or when a disclaimant acts in his individual capacity, the personal representative or the individual shall sign and date the disclaimer within 9 months of the date of death of the decedent as provided in section 2116(c) of the TRC (72 P. S. § 9116(c)), attach a copy of the probated last will and testament to the Inheritance Tax return and file the documents referenced in this section with the Department.

(2) When the disclaimer is made by the personal representative of a deceased individual, or the guardian or attorney-in-fact, in accordance with 20 Pa.C.S. § 6202 (relating to disclaimers by fiduciaries or attorneys-in-fact), a petition, motion or other pleading as required by local rule shall be filed with the applicable county orphans’ court and, within 9 months of the date of death of the decedent, the personal representative of a deceased individual, or the guardian or attorney-in-fact, shall attach a copy of the probated last will and testament to the Inheritance Tax return and file the documents referenced in this section with the Department. Filing the disclaimer with the applicable county orphans’ court within 9 months of the date of death of the decedent satisfies the filing requirement. The disclaimer is not valid until the court authorizes the disclaimer.

(e) Notice. Notice of the filing of an estate’s account and of its call for audit or confirmation shall include notice of the disclaimer under section 2116(c) of the TRC. This notice shall be given to the Pennsylvania Department of Revenue, Bureau of Individual Taxes, Inheritance Tax Division, Department 280601, Harrisburg, Pennsylvania 17128-0601.

The provisions of this § 93.141 adopted December 3, 1999, effective December 4, 1999, 29 Pa.B. 6112.

Notation

Notes of Decisions

Synopses for Disclaimer Regulation:

The survivorship interest in jointly held property may be disclaimed by a surviving joint tenant in accordance with 72 P. S. § 9116(c). In Re Estate of Bernecker, 654 A.2d 246 (Pa. Cmwlth. 1995).

In order to make an effective disclaimer for inheritance tax purposes the disclaimer must be filed within the time limits provided by Section 406 of the Pennsylvania Inheritance and Estate Tax Act of 1961, 72 P. S. § 2485-406, see now 72 P. S. § 9116(c). In Re Pomerantz Estate, 28 D. & C. 3rd 521, 3 Fiduc. Rep.2d 374 (O. C. Montg. 1983).

The right to renounce a testimentary gift passes upon death to a decedent’s personal representative. McGrady Estate, 42 D. & C.2d 519, 17 Fiduc. Rep. 405 (Pa. Orph. 1966).

Authority

The provisions of this § 93.141 issued under 2103 of the Tax Reform Code of 1971 (72 P. S. § 9103).