Are Adjustment Clauses in Disclaimers Void as Against Public Policy?

Abstract

<p>In a 2009 Eighth Circuit Court of Appeals case, <em>Estate of Christiansen v. Commissioner</em>,<strong>1 </strong>the issue of fractional or formula disclaimers was raised, with the Eighth Circuit confronted<strong> </strong>with the assertion by the Internal Revenue Service that “. . . such disclaimers should be<strong> </strong>categorically disqualified as against public policy.”<strong>2 </strong>The case involved the estate of a South<strong> </strong>Dakota rancher who had implemented a rather novel estate plan prior to her death.<strong>3 </strong>The<strong> </strong>appellate court upheld a bequest of property to a charitable foundation as a result of the<strong> </strong>daughter’s disclaimer in an amount that reflected the increased valuation of the property<strong> </strong>included in the gross estate.<strong>4</strong></p>