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In PLR 9317039, the Service considered whether a qualified disclaimer would result when disclaimed property passes to a private foundation controlled by the disclaimant. The ruling involves a decedent who died in June 1992, survived by three children. Before the decedent's will was executed, each child had created his or her own private foundation. The decedent's will provided that the share of his estate that would otherwise pass to a child, would, if the child disclaimed, instead pass to the child's private foundation. While the terms of each foundation were different, in each case, the disclaimer was to be accompanied by an amendment to the private foundation's bylaws that would insure that each foundation would have directors other than the disclaimant and that any funds received as a result of a disclaimer made by a director of the foundation would be held by the foundation as a separate and segregated fund over which the other directors would have the sole authority to direct the distribution of the principal of the fund and any income generated by the fund.
The ruling cited Regs. sec25.2518-2(d)(2), which provides that "if a beneficiary who disclaims an interest in property is also a fiduciary, that person cannot retain a wholly discretionary power to direct the enjoyment of the disclaimed property" and Regs. sec25.2518-2(e)(1)(i) , which provides that "the requirements of a qualified disclaimer will not be satisfied if the disclaimant, either alone or in conjunction with another person, directs the redistribution or transfer of the property or interest in property to another person or has the power to direct the redistribution of the property or interest in property to another person unless such power is limited by an ascertainable standard."
The Service then cited Rev. Rul. 72-552, 1972-2 C.B. 525, which holds that sec2036 includes in the estate of the president of a sec501(c)(3) organization property transferred to that organization by the president because of the president's right, in conjunction with others, to designate the entities who shall eventually possess or enjoy that property.
The Service then concluded that the disclaimers in the instant ruling are qualified disclaimers under sec2518 and the property passing to the foundation as a result of the disclaimers would be eligible for the estate...