How a Disclaimed Interest Passes to Others
A disclaimer is not just a refusal. It changes the legal timeline. When you disclaim property, the law rewinds the clock and treats you as if you were no longer alive at the moment the distribution would have occurred. The property then passes as though you were never in line to receive it.
The disclaimer takes effect as of the time the instrument creating the interest becomes irrevocable or, if the interest arose under the laws of intestate succession, as of the time of the intestate's death.
A.R.S. § 14-10006(A)(1)If the will, trust, or other instrument includes a specific provision for what happens when someone disclaims, that provision controls. Many well-drafted trusts include contingency language for exactly this situation. If no such provision exists, the disclaimed interest passes as if the disclaimant had died immediately before the time of distribution. For individuals, that typically means the property flows to their descendants. For entities, the property passes as if the entity did not exist. The date of death of the original owner sets the timeline for when these rules take effect.
Future Interests and the Disclaimant's Own Share
Disclaiming a present interest in property can also affect future interests in the same property. If a person who holds a current interest disclaims, any future interest held by someone else accelerates. That future beneficiary receives their share sooner than originally planned.
On the disclaimer of a preceding interest, a future interest held by a person other than the disclaimant takes effect as if the disclaimant had died or ceased to exist immediately before the time of distribution, but a future interest held by the disclaimant is not accelerated in possession or enjoyment.
A.R.S. § 14-10006(A)(4)There is one important guardrail here. If the disclaimant also holds a future interest in the same property, that future interest does not accelerate. You cannot disclaim a present interest to rush your own future interest into effect. The statute prevents that kind of self-dealing.