# 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:** 10\ **Page:** 3
**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, 8:21pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/41 "2011-06-23T20:21:59Z")
> [@Cat\_Whisperer](#): > > 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. Not really my concern, no one in the family is suggesting that I’m in any way trying to snag this for myself. Financially, I’m not in a position where I need quick money, so no reason for people to think I’m trying to take advantage. It would be absolutely used for whatever expenses my Mom needed it for. There are some squabbles going on about how things are being divided by other heirs (there are 21 total heirs, so some of the 1/6s are then being divided 4 or 5 ways), but my mom’s 1/6 is the most clear cut and non-contested of all of them. Some really good points have been made, lots to think about. ---
**Author:** ![Caffeine.addict](https://avatars.discourse-cdn.com/v4/letter/c/f475e1/32.png) [@Caffeine.addict](https://boards.straightdope.com/u/Caffeine.addict)\ **Post date:** [June 23, 2011, 8:26pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/42 "2011-06-23T20:26:56Z")
It’s the same in Virginia. If someone disclaims their interest, then it will pass as if the disclaiming party had predeceased the sibling. [QUOTE=Relevant Portion of Virginia’s Intestacy Statute] Fourth. If there be none such, then to his or her brothers and sisters, and their descendants. [/QUOTE] Is your mother capable of signing herself? I would talk to an attorney, but I think it would be better if she signed the disclaimer rather than you signing it. ---
**Author:** ![legalsnugs](https://avatars.discourse-cdn.com/v4/letter/l/45deac/32.png) [@legalsnugs](https://boards.straightdope.com/u/legalsnugs)\ **Post date:** [June 23, 2011, 9:00pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/43 "2011-06-23T21:00:22Z")
I think you should be very careful here. It is my understanding that according to many, if not all, states’ Medicaid rules, your mother cannot renounce an inheritance and still be eligible for benefits. Tax law says she can disclaim without penalty, but Medicaid law says the inheritance funds are a resource that she could use for her care. If she gives it away (to you through the renunciation), she will still be ineligible for the Medicaid for the months it would have covered as Medicaid will deem her to have received it anyway. Medicaid may also come back and recover the funds from you if they find out about it. Personally, I think your attorney may have given you bad advice regarding renouncing, but I don’t know your state’s laws. Accepting the funds is not a bad thing, though. If her nursing home costs are $10,000 a month, then she’ll just be ineligible for the 5 months that the $50,000 lasts, then’s she’s good to go with Medicaid again. This happens a lot these days. I understand she can also spend down the funds on funeral arrangements. You really need to talk to a lawyer who is well-versed in Medicaid law. I am a lawyer, but I am not your lawyer and I am not a Medicaid lawyer. I am probably not even licensed to practice in your state, but this is not legal advice. This is just information from an anonymous poster on a public message board. Conduct yourself accordingly. But I’d bet I’m right. ---
**Author:** ![Sateryn76](https://avatars.discourse-cdn.com/v4/letter/s/a88e4f/32.png) [@Sateryn76](https://boards.straightdope.com/u/Sateryn76)\ **Post date:** [June 23, 2011, 9:12pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/44 "2011-06-23T21:12:58Z")
Sorry dude - I think this is wrong. I can point to several members of my own family that are trying to deal with and pay for medical problems, joblessness, etc., who are still pitching in tax money. Money that will go to pay for your mom’s Medicare bill. Which she will not need until that $50K runs out. It’s terribly unfair for your mom to “refuse” assets to keep her Medicare status while they, and millions of other Americans, try their hardest to get by. They are not eligible for any kind of aid, but make very little money. They will be paying for that money spent on your mother. Yea, I know - root, hog or die, but I’d bet most of these posters would cry foul at the top of their lungs if a corporation or “fat cat” tried this dodge. You recognize the basic moral problem with this - and you’re right. ---
**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, 9:15pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/45 "2011-06-23T21:15:57Z")
That’s good information, **legalsnugs**. It sounds bureaucratic enough to be right on the money. 🙂 ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [June 23, 2011, 9:25pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/46 "2011-06-23T21:25:50Z")
> [@legalsnugs](#): > > I think you should be very careful here. It is my understanding that according to many, if not all, states’ Medicaid rules, your mother cannot renounce an inheritance and still be eligible for benefits. Tax law says she can disclaim without penalty, but Medicaid law says the inheritance funds are a resource that she could use for her care. If she gives it away (to you through the renunciation), she will still be ineligible for the Medicaid for the months it would have covered as Medicaid will deem her to have received it anyway. Medicaid may also come back and recover the funds from you if they find out about it. > > Personally, I think your attorney may have given you bad advice regarding renouncing, but I don’t know your state’s laws. Accepting the funds is not a bad thing, though. If her nursing home costs are $10,000 a month, then she’ll just be ineligible for the 5 months that the $50,000 lasts, then’s she’s good to go with Medicaid again. This happens a lot these days. I understand she can also spend down the funds on funeral arrangements. You really need to talk to a lawyer who is well-versed in Medicaid law. > > I am a lawyer, but I am not your lawyer and I am not a Medicaid lawyer. I am probably not even licensed to practice in your state, but this is not legal advice. This is just information from an anonymous poster on a public message board. Conduct yourself accordingly. But I’d bet I’m right. Now that you say that (I am NOT an attorney at all), I remember a case from tax class on inheritance where this was the case. Good advice. ---
**Author:** ![Czarcasm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/czarcasm/32/4050_2.png) [@Czarcasm](https://boards.straightdope.com/u/Czarcasm)\ **Post date:** [June 23, 2011, 11:00pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/47 "2011-06-23T23:00:31Z")
> [@Kimmy\_Gibbler](#): > > 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.” [Moderator Note]This is inappropriate for IMHO. Knock it off.[/Moderator Note] ---
**Author:** ![Hello\_Again](https://avatars.discourse-cdn.com/v4/letter/h/85e7bf/32.png) [@Hello\_Again](https://boards.straightdope.com/u/Hello_Again)\ **Post date:** [June 23, 2011, 11:12pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/48 "2011-06-23T23:12:37Z")
> [@jsgoddess](#): > > 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. The wrongness of your post was stating it as a fact that applied generally. It was probably right for your state, but it was incorrect in North Carolina. Wills law is one of those things you simply can’t make a blanket statement about because it varies so wildly between states. I do vaguely recall something from the bar exam about not being able to renunciate inheritance to shelter it from Medicare/Medicaid. Again, very vague recollection – It may be possible for the mother to gift a portion of the money to the OP and reduce the amount that Medicaid/Medicare calculates as having been received. OP needs to talk to an estates attorney versed in Medicare/Medicaid law, not just an estates attorney who understands the tax implications of inheritance. ---
**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, 11:22pm UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/49 "2011-06-23T23:22:31Z")
> [@Hello\_Again](#): > > The wrongness of your post was stating it as a fact that applied generally. That was not my intent. I mentioned only my situation and my surprise. ---
**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 24, 2011, 4:22am UTC](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554/50 "2011-06-24T04:22:02Z")
> [@legalsnugs](#): > > I think you should be very careful here. It is my understanding that according to many, if not all, states’ Medicaid rules, your mother cannot renounce an inheritance and still be eligible for benefits. Tax law says she can disclaim without penalty, but Medicaid law says the inheritance funds are a resource that she could use for her care. If she gives it away (to you through the renunciation), she will still be ineligible for the Medicaid for the months it would have covered as Medicaid will deem her to have received it anyway. Medicaid may also come back and recover the funds from you if they find out about it. Having done [a bit more research](https://www.cms.gov/MedicaidEligibility/10_TransferofAssets.asp) (an hour and a half on Westlaw confirming whether the [Granny Goes to Jail Act](http://www.virtuallawoffice.com/ALERT.html) is still enforceable; the things I do for you people), it appears that this is correct and it won’t do her any good to renounce. However, I couldn’t find completely clear guidelines on whether an inheritance that is renounced constitutes an asset that triggers the transfer penalty. Technically, since ownership transfers directly from the estate to you, it might not. [Previous page](https://boards.straightdope.com/t/legally-skirt-tax-inheritance-or-not/586554.md?page=2)