I am setting mine up this way. I'd have it on line now if I hadn't trusted the owner of one of my LFSs (dealing with a large amount of ammoniaand phosphate leaching from some dry rock. Thankfully I hadn't taken my current setup, transferred everything over, and added the new rock as was the original plan. Everthing would have died with ammonia well over 8ppm)
Anyway... My main tank is actually an AIO frag tank. It can take an almost 2 gallon surge volume when the sump back siphons. This is several inches from my refugium, which is located above my display.
Have you calculated or measured how much extra volume the display can handle?
What are the dimensions of the tank?
What is the distance from the waterline to the rim of the tank?
If thee is an internal overflow, what is the available vloume when the tank is running?
What are the dimensions of the tank/container you are intending to use as a refugium?
There have been some good recommendations here, but don't let others discourage you based on the fact that this is atypical. I posted a question elsewhere and had nothing but negative comments and people suggesting that I purchase a new tank with a 'proper' stand over attempting this without taking the time to understand my system or goals. If it is designed properly and accomodates the extra volume from the backsiphon when pumps shut down, this can work well. Unless the refugium is sized similarly to the display, the volume will be much smaller and is easier to accomodate.