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Posted on Wednesday, January 14th, 2015 by Peter Klenk

In New Jersey, a disclaimer is an heir’s legal refusal to accept a gift or a bequest. In other words, you can’t force someone to accept a gift. If a Will names someone an heir or if a life insurance policy names a beneficiary, that heir or beneficiary cannot be “forced” to accept the gift. If the heir or beneficiary legally and properly refuses the gift, it is called a “disclaimer.”

But, an heir or beneficiary cannot use a disclaimer to avoid existing creditors. We would have to discuss your exact circumstances, but it sounds as if your creditors would be able to properly claim your disclaimer was fraud under the Uniform Fraudulent Transfer Act.

That being said, your father does have other options to shelter the gift. New Jersey allows him to set up a protective trust where the assets are held for your benefit, but are not available to your creditors. He could also name your children as the beneficiaries of the estate, so your creditors would have no claims. These decisions are up to your father, but if he consults with an experienced Burlington County Estate Planning Attorney, he will find that he has many options available to benefit his child or grandchildren and avoid the gift from passing to your creditors.

If you have questions about avoiding Estate Planning in Burlington County, feel free to contact our office for a free consultation.
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