Life and Death Planning for Retirement Benefits

196

Life and Death Planning for Retirement Benefits

benefits, in other words], such waiver shall not be treated as a transfer of property by gift for purposes of this chapter” (emphasis added). This gift tax exemption for lifetime spousal waivers or REA benefits seems to suggest that:  Spousal waivers of REA-guaranteed benefits after the participant’s death could be treated as a gift-taxable transfers. However, GCM 39858 (which was issued in 1989, though it is inexplicably dated 9/9/81) negated this suggestion, stating that § 2503(f) creates “no inference” that Congress intended to impose gift tax on spousal waivers that occur after the participant’s death. GCM 39858 involved a spousal disclaimer of REA-guaranteed benefits and does not mention any deadline for such a disclaimer earlier than nine months after the participant’s death, holding that: “There is no evidence that Congress intended to preclude a spouse from disclaiming or renouncing benefits under a qualified plan payable after the participant’s death.”  Since the statutory exemption is limited to REA-guaranteed benefits, and many plans actually grant the spouse more rights than REA guarantees (see ¶ 3.4.05 ), a spousal waiver of such excess benefits could be treated as a gift-taxable transfer. There have been no cases or rulings on this question.