The best way to decline is to simply decline...etiquette doesn't demand you provide an explanation, In fact its rude for others to ask.
If its a formal event like a wedding, send your regrets promptly, and send a card or a gift as you see fit. For a casual event, you can say something like. "I'm sorry I can't make it, but perhaps we can get together in the future" and leave it at that.
People often make way too much of trying lie or make up elaborate excuses, but there is no need. Most people know when they are being lied to and will be hurt or offended more by the lies than you not being able to attend (and rightly so).