In 1978, the National Conference of Commissioners on Uniform State Laws promulgated three separate disclaimers acts, the Uniform Disclaimer of Property Interests Act, the Uniform Disclaimer of Transfers by Will, Intestacy or Appointment Act, and the Uniform Disclaimer of Transfers under Nontestamentary Instruments Act. The three acts of 1978 were promulgated to meet the varying conditions of state law respecting disclaimers of property interests. Some states had law governing disclaimers during the probate of an estate, and were given the opportunity to enact law governing disclaimers of nontestamentary transfers that would parallel disclaimers of property interests in an estate. And vice versa. The Uniform Disclaimer of Property Interests Act (1978) was designed for states with no disclaimer law whatsoever. In 1999, all three of these acts have been replaced by the Uniform Disclaimer of Property Interests Act (1999).

Disclaimers are used by those who receive property as heirs or legatees in an estate, or by beneficiaries of a nontestamentary transfer of property at death; for example, the beneficiaries of a trust. A disclaimer is simply a declaration by the person entitled to property that the interest in that property is disclaimed or renounced. A disclaimer allows the disclaiming heir, legatee or beneficiary to disclaim an interest in such a fashion that the right to the property that is disclaimed is treated as if it never existed. Why do these kinds of disclaimers occur? A simple fact situation illustrates their utility. A father creates a trust in which his wife is the income beneficiary during her life, and his only child, and grandchildren by that child are the remainder beneficiaries—receiving the assets of the trust at the death of the settlor's wife. The son determines that the most efficient distribution at the end of the trust would be to the grandchildren. The son wants to increase their estate and not pass the property through his own estate. So, the son executes a disclaimer of the interest in the trust. The disclaimer will extinguish that interest as if it had never been granted. The settlor's grandchildren will have an increased estate, skipping a generation in effect. This is a simple example to suggest the need and use of disclaimers. It does not attempt to deal with tax and other issues of descent and distribution that might apply in the individual case.

The Uniform Disclaimers of Property Interests Act (1999) provides the authority to make disclaimers, what interests may be disclaimed, the time when disclaimers are effective, and the effect on the distribution of the disclaimed property interests.

Who may disclaim a property interest under UDPIA (1999)? Basically, an heir in an intestate estate, a devisee of a will, a beneficiary of a trust or other nontestamentary transfer, a joint tenant in a joint tenancy with right of survivorship, a trustee of a trust, or any other fiduciary acting in a fiduciary capacity may disclaim. Neither trustees or other fiduciaries are specifically covered in the earlier disclaimer acts. Nothing in UDPIA abrogates fiduciary obligations, and the power to disclaim is subject to those obligations.

What interests may be disclaimed? Any interest that may come to the person entitled to disclaim, may be disclaimed, including a distribution of property in a probate estate, property due under a trust instrument, the property rights of a joint tenant at the death of another joint tenant, or the beneficiary rights following any other kind of nontestamentary or nonprobate transfer at death. The transfer for example can be by an insurance policy, a pay-on-death bank account, a TOD security registration, a pension plan or any other nonprobate transfer at death. The disclaimer, when effective, will treat the interest as if it had never been granted. This relation-back effect of disclaimers is what makes them important. In the prior example, the grandchildren receive as if their father had never had an interest.

An important addition to UDPIA (1999) is the express addition of disclaimers for powers of appointment. The prior uniform acts did not provide an express authority to disclaim powers of appointment.

Disclaimers become effective generally when the instrument providing for the interest disclaimed cannot be revoked by the grantor of these interests. In many cases that time occurs when the grantor of an interest dies. But an interest in a trust may become irrevocable before the death of the settlor.

The prior uniform acts provided fairly short time periods for disclaiming interests after the grantor can no longer revoke the grant of an interest. UDPIA (1999) does not express any time limits as the prior acts did. The prior acts expressed periods that responded to federal tax requirements. Under UDPIA (1999) there is no link to federal tax law limits, but, of course, federal tax law continues to control the effectiveness of any disclaimer for tax purposes.

Generally, a disclaimer means that those who receive a distribution, minus the person disclaiming, will receive a greater benefit. Other heirs or devisees in an estate, or other beneficiaries of a trust, are examples of those who will benefit. Disclaimers are used to achieve exactly those increased benefits in others, i.e., the parent benefitting the children who are the grandchildren of the original source of the property as in the earlier simple example. UDPIA (1999) has rules limiting benefits, however, to avoid windfalls. In the earlier example, if there are two children who share equally as remainder beneficiaries of the trust, with grandchildren to take by right of representation, then it is possible for a disclaimer by one child to upset the balance of distributions to all the grandchildren. UDPIA (1999) makes it clear that the disclaimer is only the proportionate share that the disclaiming person would take that would not upset a balance with beneficiaries, so that windfalls are prevented. These rules clarify problems with the prior uniform acts.

The new UDPIA (1999) is a useful tool for estate planners, trustees, beneficiaries, heirs and devisees, when the transfer of an interest in an estate, trust or other nontestamentary transfer would be better done without an interest actually transferring. The new UDPIA (1999) is up-to-date and ready to serve, and should be carefully considered by every state for enactment.