irs 2518 disclaimer

[Guest jgchess]

My mother had me and my brother left as beneficiaries on her 401k accounts.

Me and my brother want to set up the distribution where I receive most of the money. It is divided into four accounts so we have some options.

We wanted to have it where I receive all the money and then I just write him a check or give him cash

for what we decide he is to receive. By doing it this way we get he receives what we decide and is much less complicated than if each of us receive half and then gives me money. If we do it this second way we then have to figure the tax effect of what to give me because all of the money is taxable.

We are concerned about the first choice where I get everything and he disclaimers everything. In accordance with irs section 2518 I believe the disclaimer could not have "received benifit". By me giving him money back this might constitute that unless I give him cash or I give it to someone else and they then give him the money.

We are also concerned about gift tax. Would that money received by him by me be subject to that or can that be avoided another another rule of law. As it is not a gift and maybe it can be called something else. thank you in advance for any advice you can offer.

[QDROphile]

Even if someone dares to try to respond in any detail, you need to engage a professional advisor. You are trying to play a very sophisticated game (hence the name "chess"?) and general comments from strangers are not going to be reliable.

[J Simmons]

By doing it this way we get he receives what we decide and is much less complicated than if each of us receive half and then gives me money.

Why is your writing him a check/giving him cash when the two of you agree to it easier than him writing you a check/giving you cash when the two of you agree? When the two of you do not agree, he who already has the benefits keeps them. It seems to me that the even split, what your mother had in mind to do with her remaining benefits, is more equitable.

If we do it this second way [you getting more than 1/2 and giving him money when you agree] we then have to figure the tax effect of what to give me because all of the money is taxable.

That seems more complicated than easier. Are you in a lower marginal bracket than your brother? Are you younger than your brother? What is the sophisticated 'chess' game being played?

We are concerned about the first choice where I get everything and he disclaimers everything. In accordance with irs section 2518 I believe the disclaimer could not have "received benifit". By me giving him money back this might constitute that unless I give him cash or I give it to someone else and they then give him the money.

This is the easier way??

We are also concerned about gift tax. Would that money received by him by me be subject to that or can that be avoided another another rule of law. As it is not a gift and maybe it can be called something else.

Seems you're going the complicated route.

[Guest jgchess]

By doing it this way we get he receives what we decide and is much less complicated than if each of us receive half and then gives me money.

Why is your writing him a check/giving him cash when the two of you agree to it easier than him writing you a check/giving you cash when the two of you agree? When the two of you do not agree, he who already has the benefits keeps them. It seems to me that the even split, what your mother had in mind to do with her remaining benefits, is more equitable.

If we do it this second way [you getting more than 1/2 and giving him money when you agree] we then have to figure the tax effect of what to give me because all of the money is taxable.

That seems more complicated than easier. Are you in a lower marginal bracket than your brother? Are you younger than your brother? What is the sophisticated 'chess' game being played?

We are concerned about the first choice where I get everything and he disclaimers everything. In accordance with irs section 2518 I believe the disclaimer could not have "received benifit". By me giving him money back this might constitute that unless I give him cash or I give it to someone else and they then give him the money.

This is the easier way??

We are also concerned about gift tax. Would that money received by him by me be subject to that or can that be avoided another another rule of law. As it is not a gift and maybe it can be called something else.

Seems you're going the complicated route.

I would be in a lower tax bracket as one reason. Also to give cash would be to give about 45,000 in cash which may not be to easy to do. I would like to do things as legal as possible unless it can't be done that way.

[J Simmons]

I would be in a lower tax bracket as one reason. Also to give cash would be to give about 45,000 in cash which may not be to easy to do. I would like to do things as legal as possible unless it can't be done that way.

There are ways, as QDROphile suggested, and they do require face-to-face professional advice. I'm still trying to get my head around what the advantages are that would justify all the trouble--and cost.