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Can the heirs still disclaim that part of their inheritance?

I wonder who gets it if everyone says "No thanks - don't want the tax bill"

A disclaimer doesn't necessarily change the size of the taxable estate, unless it results in a larger residual marital share, increasing the marital deduction, or a larger residual charitable share.

The estate tax is imposed on the taxable estate, not the beneficiaries. The estate, represented by the executor, (the IRS uses that word, rather loosely) is liable for the total estate tax, not the individual heirs, except by transferee liability.

The odd case you suggest, where everyone disclaimed, would not eliminate the estate tax, unless the residual estate went to charity, or to a surviving spouse. You'd have to ask a lawyer in the pertinent estate about the effects of a disclaimer by a particular party. It might result in a circular function where everyone got what they would have gotten anyway.

Sometimes the surviving spouse who gets everything will disclaim a certain amount or percentage, resulting in that amount going to a family trust of which he/she is the lifetime beneficiary anyway, not really costing him/her anything. But the family trust gets out of his/her estate.

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