# Legally skirt tax/inheritance or not? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [June 23, 2011, 2:11pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554 "2011-06-23T14:11:52Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![leftfield6](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/leftfield6/32/18780_2.png) [@leftfield6](https://boards.straightdope.com/u/leftfield6)\ **Post date:** [June 23, 2011, 4:49pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/21 "2011-06-23T16:49:29Z")
> [@Really\_Not\_All\_That\_Bright](#): > > Having thought about this for a bit, I’d be a bit concerned about using POA to effectively make a gift to yourself (even if you fully intend to use the gift for her benefit). I would at least suggest that your mother consult directly with a lawyer first as a CYA. POA has a specific clause allowing POA holder to act even if it financially benefits the POA holder. Still, would ask my lawyer to make sure it applies to this instance. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [June 23, 2011, 4:52pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/22 "2011-06-23T16:52:27Z")
IME, those generally apply to actions which have a purpose or result beyond financially benefiting you. In this case, the only result of the action is benefiting you. So yeah, I’d definitely ask him about that. ---
**Author:** ![Kimmy\_Gibbler](https://avatars.discourse-cdn.com/v4/letter/k/bbe5ce/32.png) [@Kimmy\_Gibbler](https://boards.straightdope.com/u/Kimmy_Gibbler)\ **Post date:** [June 23, 2011, 4:54pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/23 "2011-06-23T16:54:43Z")
> [@leftfield6](#): > > POA has a specific clause allowing POA holder to act even if it financially benefits the POA holder. Still, would ask my lawyer to make sure it applies to this instance. Why doesn’t your mother just renounce herself? Her attorney can draft a simple document that she can sign and then the attorney’s office can send it to the executor/administrator of your aunt’s estate. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [June 23, 2011, 5:14pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/24 "2011-06-23T17:14:10Z")
> [@leftfield6](#): > > Legally, yes. But does this not feel a little underhanded to you guys? Not at all. No more “underhanded” then people with significant assets receiving Social Security checks. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [June 23, 2011, 5:15pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/25 "2011-06-23T17:15:01Z")
> [@Really\_Not\_All\_That\_Bright](#): > > Having thought about this for a bit, I’d be a bit concerned about using POA to effectively make a gift to yourself (even if you fully intend to use the gift for her benefit). I would at least suggest that your mother consult directly with a lawyer first as a CYA. Not an attorney, but it sounds like a conflict of interest. The OP has the POA to act in the best interests of the mother but using it to renounce the gift sounds like it’s taking advantage of the POA. ---
**Author:** ![Junkman209](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/junkman209/32/5522_2.png) [@Junkman209](https://boards.straightdope.com/u/Junkman209)\ **Post date:** [June 23, 2011, 5:59pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/26 "2011-06-23T17:59:10Z")
> [@leftfield6](#): > > I was advised by my attorney, and the attorney working on settling the estate agrees, that I should have my mother “renounce” her share of the inheritance. According to NC statute, it would then go to next blood relative, which would be me. This would enable her to keep her benefits, and I would use the money to provide everything else she needs. This is her choice to make, not yours. If you conscience bothers you AFTER you inherit the money (because you do not have the choice prior to that point), you can always give the money to your state and the federal government. Income tax forms allow you to add any amount you want to give over and above what you are required to give. ---
**Author:** ![MN\_Maenad](https://avatars.discourse-cdn.com/v4/letter/m/e95f7d/32.png) [@MN\_Maenad](https://boards.straightdope.com/u/MN_Maenad)\ **Post date:** [June 23, 2011, 6:18pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/27 "2011-06-23T18:18:48Z")
> [@Dangerosa](#): > > $50k for your mother’s care would get eaten up in minutes (I’m exaggerating)…and then you’d have to reapply. You’d probably cost the government half that in taking her off, changing her billing, and then putting her back on Medicare. Plus your headaches. > > If you were talking about enough money to see your mother through the rest of her life without having to rely on the taxpayers, you might have an ethical problem. I wouldn’t consider this amount material. This is where I’d come down, as well. There’s a possibility, too, that your mom’s eligibility status with the state could change 6 months down the road after the money’s gone (not exactly sure how, but I’d be paranoid). Set the money aside in its own account, use it for you mom’s expenses. When she passes, give it to a charity she’d prefer, or as suggested above, to one that assists the elderly specifically. ---
**Author:** ![Markxxx](https://avatars.discourse-cdn.com/v4/letter/m/5daacb/32.png) [@Markxxx](https://boards.straightdope.com/u/Markxxx)\ **Post date:** [June 23, 2011, 6:29pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/28 "2011-06-23T18:29:18Z")
You’re trying to collect government assistance when you don’t qualify. The fact is your evading the system not avoiding it. If I am on food stamps and get paid in cash and don’t report it, I’m not AVOIDING, I am evading. It’s not illegal to avoid taxes and such, so long as you don’t evade them. People abuse systems all the time and ironically you see people on this board crying out when Miss X buys chips with her Link card. But think nothing of this. I hate to sound mean but you KNOW what is right. You asked this question to get permission to do what you want to do anyway. In the end you have to live with yourself. ---
**Author:** ![leftfield6](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/leftfield6/32/18780_2.png) [@leftfield6](https://boards.straightdope.com/u/leftfield6)\ **Post date:** [June 23, 2011, 6:35pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/29 "2011-06-23T18:35:12Z")
> [@Markxxx](#): > > You’re trying to collect government assistance when you don’t qualify. > > The fact is your evading the system not avoiding it. If I am on food stamps and get paid in cash and don’t report it, I’m not AVOIDING, I am evading. > > It’s not illegal to avoid taxes and such, so long as you don’t evade them. > > People abuse systems all the time and ironically you see people on this board crying out when Miss X buys chips with her Link card. But think nothing of this. > > I hate to sound mean but you KNOW what is right. You asked this question to get permission to do what you want to do anyway. > > In the end you have to live with yourself. Mark, re-read my initial post. I’m not _looking_ for permission to do this. My initial reaction is that I’m not sure I’m comfortable with this at all, but everyone is telling me I’m crazy to not do this. Did you read the thread? ---
**Author:** ![Rachellelogram](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rachellelogram/32/8689_2.png) [@Rachellelogram](https://boards.straightdope.com/u/Rachellelogram)\ **Post date:** [June 23, 2011, 6:48pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/30 "2011-06-23T18:48:22Z")
> [@Markxxx](#): > > You’re trying to collect government assistance when you don’t qualify. > > The fact is your evading the system not avoiding it. If I am on food stamps and get paid in cash and don’t report it, I’m not AVOIDING, I am evading. > > It’s not illegal to avoid taxes and such, so long as you don’t evade them. > > People abuse systems all the time and ironically you see people on this board crying out when Miss X buys chips with her Link card. But think nothing of this. > > I hate to sound mean but you KNOW what is right. You asked this question to get permission to do what you want to do anyway. > > In the end you have to live with yourself. This argument is fucking ridiculous. If you convince the OP to disqualify her mother for medicare, I will sic a garden gnome on your kneecaps, then report you for elder abuse. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [June 23, 2011, 7:05pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/31 "2011-06-23T19:05:21Z")
> [@JohnT](#): > > Is there any benefit to your mother for having her to re-apply for all these current benefits once the money runs dry? If there’s a three+ month gap in “coverage” (i.e., from when the money runs out to when the benefits kick back in), are you and her in a position to afford it?.. That was my first thought as well - if she gets a chunk of money and that is then all used up to pay for her care, what kind of time gap would there be to reinstate her into the system once the money is gone? I suspect there will be - and that in and of itself is EXACTLY why I’d consider doing what the lawyers suggest. Any way to check that out with the Medicare/Medicaid folks? For what it’s worth: If you feel weird about the money possibly NOT being used for her care (i.e. if it’s then all preserved for you), couldn’t you give any leftover money to the state once she’s passed on? ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [June 23, 2011, 7:17pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/32 "2011-06-23T19:17:07Z")
Oh - and another thought: If your mother is being supported by Medicaid, this means there’s not a whole lot of money to buy her luxuries like nice clothes, treats etc. Those are the sorts of things you can use the money for on her behalf. Not quite the same scenario, but close enough: we have a “special needs trust” set up for our son - my brother has done the same for his son (both boys are autistic; my son is likely to be able to be self-supporting but my nephew will never be able to live independently). Such trusts are set up _specifically_ to allow a disabled adult to remain “in the system”, because if they own anything beyond a thousand dollars or so, they’re no longer covered for certain benefits. So inherited money etc. is held in the trust, to be used for the benefit of that person. It can be used to pay for luxuries, or for therapy / treatment / specialized needs that would not be covered under Medicaid/Medicare, or whatever the trustee feels is appropriate. If it were left directly to the disabled adult, it would have to be spent down, leaving a gap between the spend-down and and the time the assistance is restarted. I think the OP’s situation - with renouncing the inheritance - is pretty close to that. If you like, you could even set up a trust to hold the funds. You could even set someone else up as the trustee. That might be something to ask the lawyer about. ---
**Author:** ![wonky](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wonky/32/393_2.png) [@wonky](https://boards.straightdope.com/u/wonky)\ **Post date:** [June 23, 2011, 7:35pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/33 "2011-06-23T19:35:03Z")
I don’t understand why, if the Mom renounces the inheritance, the money doesn’t go to the descendants of the other siblings. If I renounce my inheritance from my parents, my portion doesn’t go to my heirs; my portion is split up amongst their heirs. ---
**Author:** ![hogarth](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hogarth/32/1773_2.png) [@hogarth](https://boards.straightdope.com/u/hogarth)\ **Post date:** [June 23, 2011, 7:43pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/34 "2011-06-23T19:43:59Z")
Renounce the inheritance, and write to your congressman and lobby him for a more sensible system of universal health care. ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [June 23, 2011, 7:49pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/35 "2011-06-23T19:49:21Z")
> [@Markxxx](#): > > You’re trying to collect government assistance when you don’t qualify. > > The fact is your evading the system not avoiding it. If I am on food stamps and get paid in cash and don’t report it, I’m not AVOIDING, I am evading. > > It’s not illegal to avoid taxes and such, so long as you don’t evade them. > > People abuse systems all the time and ironically you see people on this board crying out when Miss X buys chips with her Link card. But think nothing of this. > > I hate to sound mean but you KNOW what is right. You asked this question to get permission to do what you want to do anyway. > > In the end you have to live with yourself. I can see your point; my concern would be about the OP’s mom re-qualifying after the money is gone, too. I can easily see situations where that 50k is just enough to screw her over real good. I’m not big on gaming the system, either, but working poor people get gamed by the system regularly - finding a way to not get screwed doesn’t qualify as gaming the system to me. Legally renouncing an inheritance is not the same as hiding money from welfare, either - what the OP is describing is legal - welfare fraud is not. OP, are you concerned about the appearance that you are abusing your POA to take your mom’s inheritance? I like the idea that you use the money to increase your mom’s quality of life. ---
**Author:** ![perfectparanoia](https://avatars.discourse-cdn.com/v4/letter/p/a5b964/32.png) [@perfectparanoia](https://boards.straightdope.com/u/perfectparanoia)\ **Post date:** [June 23, 2011, 7:58pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/36 "2011-06-23T19:58:40Z")
In this case, I would in your position have her renounce it (since the value of the assistance she is getting is more than the 50,000) and then renounce it myself. Then I am not dodging and the money will (presumably) go to the rest of the family. (If I were your mom, I might renounce and tell you to use the money to pay off your house/take a vacation.) ---
**Author:** ![leftfield6](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/leftfield6/32/18780_2.png) [@leftfield6](https://boards.straightdope.com/u/leftfield6)\ **Post date:** [June 23, 2011, 7:59pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/37 "2011-06-23T19:59:22Z")
> [@jsgoddess](#): > > I don’t understand why, if the Mom renounces the inheritance, the money doesn’t go to the descendants of the other siblings. If I renounce my inheritance from my parents, my portion doesn’t go to my heirs; my portion is split up amongst their heirs. That would seem logical,I agree, but North Carolina statutes indicate that her 1/6th would go to her next of kin. The estate attorney was very clear on this. ---
**Author:** ![wonky](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wonky/32/393_2.png) [@wonky](https://boards.straightdope.com/u/wonky)\ **Post date:** [June 23, 2011, 8:08pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/38 "2011-06-23T20:08:55Z")
> [@leftfield6](#): > > That would seem logical,I agree, but North Carolina statutes indicate that her 1/6th would go to her next of kin. The estate attorney was very clear on this. Okay. I’m glad they seem aware of what’s going on. You’d be surprised at how clueless a couple of the estate lawyers I’ve had dealings with have been. ---
**Author:** ![Kimmy\_Gibbler](https://avatars.discourse-cdn.com/v4/letter/k/bbe5ce/32.png) [@Kimmy\_Gibbler](https://boards.straightdope.com/u/Kimmy_Gibbler)\ **Post date:** [June 23, 2011, 8:09pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/39 "2011-06-23T20:09:56Z")
> [@jsgoddess](#): > > I don’t understand why, if the Mom renounces the inheritance, the money doesn’t go to the descendants of the other siblings. Renunciation just means that the court will treat the renouncing heir/legatee as having predeceased the decedent. > [@](#): > > If I renounce my inheritance from my parents, my portion doesn’t go to my heirs; my portion is split up amongst their heirs. You’re so full of shit. I love the way you toss this off as if you had _ **any** _ basis for making this statement besides “Here’s my guess about the matter after having thought about it for ten seconds.” ---
**Author:** ![wonky](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wonky/32/393_2.png) [@wonky](https://boards.straightdope.com/u/wonky)\ **Post date:** [June 23, 2011, 8:18pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/40 "2011-06-23T20:18:14Z")
> [@Kimmy\_Gibbler](#): > > Renunciation just means that the court will treat the renouncing heir/legatee as having predeceased the decedent. > > You’re so full of shit. I love the way you toss this off as if you had _ **any** _ basis for making this statement besides “Here’s my guess about the matter after having thought about it for ten seconds.” It’s what one of my mother’s estate lawyers told me. I’m not exactly surprised it turns out to be wrong, but since I never went forward with the renunciation it never mattered. [Previous page](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554.md?page=1) [Next page](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554.md?page=3)