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gift tax

Legal How-To: Disclaiming an Inheritance

Although an inheritance of money, property, or other assets is often a welcome gift for the recipient, there are circumstances in which a person may want to disclaim a gift from another person's estate. For example, a person whose own estate may already be at or near the limit of the federal estate tax exemption may choose to disclaim an inheritance for tax purposes. Disclaimers may also be used to take advantage of martial deductions or to prevent a beneficiary's creditors from making a claim on property that he or she inherited. So how do you legally disclaim a gift or bequest made by another person' estate? Here's a general overview: How to Make a Qualified Disclaimer Under IRS rules, there are five requirements that a person must satisfy in order to disclaim an inheritance: The disclaimer must be irrevocable and unqualified. The disclaimer must be in writing. The disclaimer must be completed within nine months of the death of the person who left the bequest. The person making the disclaimer must not accept any benefit from the disclaimed property.The interest disclaimed must pass to someone else "without any direction on the part of the person making the disclaimer." If these conditions are satisfied, the property will pass as if the person making the disclaimer had predeceased the person making the gift. The disclaimed property will then pass to whoever is specified by the will, trust, or other instrument, or by the operation of law. The disclaimed property will also not be treated as a transfer or a gift by the person making the disclaimer. This allows the person making the disclaimer to avoid the tax issues that would otherwise be involved with accepting the inheritance and then giving the inherited property as a gift or transferring ownership to another individual. Need More Help? If you are dealing with a large or complicated inheritance, or need advice on whether a disclaimer is right for your situation, your best option may be to seek the help of an experienced estate planning lawyer. Are you facing a legal issue you'd like to handle on your own? Suggest a topic for our Legal How-To series by sending us a tweet @FindLawConsumer with the hashtag #HowTo. Related Resources: Saying 'No Thanks' to a Bequest (The New York Times) Millionaire's Heirs Wait 92 Years for Inheritance (FindLaw's Law and Daily Life) Legal How-To: Omitting Relatives From Your Will (FindLaw's Law and Daily Life) Sign Up for Our Free Legal Planning Newsletter (FindLaw's Legal Heads-Up)
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Legalese From A to Z: 5 Legal Terms Beginning With ‘G’

Welcome back to Legalese From A to Z, our series highlighting the meanings behind legal terms that may not be familiar to non-lawyers. Legalese describes the specialized language of the legal profession -- in other words, things only lawyers would say. With the help of FindLaw's Legal Dictionary, let's take a closer look at five of these terms that begin with the letter "G": Garnishment. Garnishment is a device used by creditors to attach the property or wages of a debtor to repay a debt. Wage garnishment can be used to collect a wide variety of debts, including back taxes, child support, and judgments from court cases. Gift tax. The gift tax is a tax imposed on gifts of property made during a person's lifetime. Certain gifts are exempt from the gift tax, such as gifts to a spouse, donations to a charitable organization, and gifts to any individual up to $13,000 per year. Good faith. Good faith is the absence of bad intentions when entering into an agreement, negotiating, or bringing a lawsuit. For example, in union collective bargaining situations, both the employer and the union are required to negotiate with one another in good faith. Good Samaritan law. A good Samaritan law is a law that provides immunity from liability for a good Samaritan who attempts to provide aid to someone in distress, but inadvertently causes further injury. A good Samaritan law recently passed in New Jersey, for example, provides legal protection to medics and ordinary citizens who administer opioid antidotes to drug overdose victims. Gratuitous. Gratuitous describes an act not involving consideration, compensation, or return benefit. In contract law, a gratuitous promise -- a promise made without an expectation of a return benefit or burden on the promisee -- may be unenforceable if the promisor fails to do what he promised. If you need help with defining a legal word or phrase, check out FindLaw's Legal Dictionary for free access to more than 8,000 definitions of legal terms. Or check back here next Sunday, when Legalese From A to Z will demystify five more legal terms you may not know, beginning with the letter "H." Related Resources: Legalese From A to Z: 5 Legal Terms Beginning With 'A' (FindLaw's Law and Daily Life) What Does 'Wet Reckless' Mean in a DUI Case? (FindLaw's Blotter) What's the Difference Between Bond and Bail? (FindLaw's Blotter) What Is the War Powers Act? What Does It Require? (FindLaw's Law and Daily Life)
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