The "applicable exclusion amount" is a new term found in I.R.C. §2010, and is the amount which a person may transfer, either in taxable gifts during life or at death, without any transfer tax being payable. To take advantage of the applicable exclusion amount, that portion of the deceased spouse's estate should not be given to the surviving spouse. If the applicable exclusion amount is given to the surviving spouse, although there will be no estate tax, this merely serves to increase the size of the surviving spouse's estate and his or her potential estate tax liability. By funding the applicable exclusion amount in a separate non-marital deduction trust, that trust will not be included in the estate of the surviving spouse upon his or her death. The applicable exclusion amount is $650,000 in 1999 and increases until reaching $1,000,000 in the year 2006 and thereafter. If the combined estates of the spouses is less than one applicable exclusion amount, and that fact is likely to continue to be the case when the surviving spouse dies, there may be no reason to fund a separate trust. One alternate plan available, if the spouses are uncertain whether a separate trust will be used, is the disclaimer trust concept. Under this plan, a separate trust is set forth in the settlors trust but there is no mandatory requirement to fund the separate trust when the first spouse dies. However, there is express authorization for the surviving spouse to disclaim a portion of the deceased spouse's estate, and the portion disclaimed funds the disclaimer trust. The benefit of this plan is that the decision covering funding can be made as late as nine months after the death of the first spouse. I.R.C. §2518.