Category: Elder Care
Tags: Estate Planning, Gift Tax, Medicaid, Gift Tax, NC Gift Tax


Disclaiming Inheritances in North Carolina

Posted on: May 1st, 2013

Why would an individual renounce or disclaim an inheritance in North Carolina? An inheritance may not always be expected and it may not be desirable for the beneficiary. Certain assets, like real estate or personal items, may require complicated or expensive maintenance that the beneficiary does not want to manage. An inheritance may also come with a heavy tax burden. For senior citizens, an inheritance could affect their eligibility for Medicaid benefits. Instead, a beneficiary may want another family member to receive their inheritance.

disclaiming inheritancesDisclaiming an inheritance is governed under state law, but to avoid the disclaimer being subject to gift tax it must meet federal regulations as well. Since a disclaimer (which is irrevocable) must comply with federal and North Carolina law, it is best prepared by a North Carolina estate planning attorney. Filing and registering disclaimers in North Carolina, when done properly, allows the disclaimant to avoid gift taxes associated with the transfer occurring as a result of the disclaimer. A disclaimer must be filed within 9 months of the date of death and the disclaimant must not have received or benefited from the property.
 
May is National Elder Law Month. Seniors should consult with a North Carolina elder law attorney if they are due an inheritance. The amount of a disclaimer made within five years of applying for Medicaid will be considered an asset and could result in penalties.
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