Generational Wealth

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm rather agnostic on the topic of raising inheritance taxes on the very rich. Yes, it's easy to look at the top 1% and think, my god, they have so much money. But then I look at the bottom 20 or 30% of society and wonder why they deserve the wealth transfer? Because many if not most don't. A lot of people at the bottom of society are leeches who never produce anything useful for society and just feed off the welfare state.

In reality, inheritance tax is a red herring concept, a feel-good policy which never, ever, raises anywhere near the amount of revenue it theoretically promises as the wealthy find ways around it or simply stop producing more wealth. And the argument that it's a double tax, taxing incomes and wealth that has already been taxed at least once, is a valid one. And there's no question it involves class jealousy.

If you really want to increase tax revenues on a significant scale to fund all your pet programs, you have to raise taxes across the middle classes. Not just the wealthy.

+1

Agreed that it is a Double tax. Most of us who are wealthy (in the 10-50M range) don't have ways to shelter the money as it came in. We paid taxes to fed and state on ALL of it (and PAID a ton of $$$ each year). It was income or LT/ST Cap Gains of stock options. That money is ours and it really is not fair to tax it again just because we die. So we will fully utilize all legal methods to ensure our kids don't pay 40-60% in estate taxes. Why wouldn't we?

Also agree that most who say "tax it again" are simply jealous of those who have that much. We got there thru hard work---years of long hours and lower paying jobs at smaller companies in the hopes that the options pan out. Eventually they did---but that doesn't happen for everyone.

So hard work + luck. Got it.

luck is largely about taking risks. Willing to take lower salary in return for options in hopes those turn into something. Could have taken a "safer path" in tech and made double the salary during those 10 years and worked less hours. Instead we took the riskier path and it paid off.
Partner has been CEO at smaller company for over 12 years. Their salary has not changed once in those 12 years, except for the 2 years the company struggled and they chose to actually take a 35% pay cut for those years. 10 year and their salary has NOT increased at all. And nope, nobody knows about those pay cuts except the CFO/finance people who would see that. Instead they focus on getting pay increases and bonuses for the employees that deserve it. Not your typical CEO.

So yes, hard work, picking a career path and then a lifestyle that can be supported by your career path. If you only make $50-75K/year, you need to live on that, not $100K. THat's what we did when just starting out---live beneath our means, work our asses off to pay of major student loans and then save save save rather than upgrading our lifestyles.

Nope. Luck is about being born into a decent family that has everything needed to raise their children. Luck is getting through life without any serious illnesses and being born without disabilities. Luck is being born in a country where there is a chance to make a decent living without being surrounded by war.

I would hope when people takes risks they weigh the pros and cons and then choose. Luck has nothing to do with it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm rather agnostic on the topic of raising inheritance taxes on the very rich. Yes, it's easy to look at the top 1% and think, my god, they have so much money. But then I look at the bottom 20 or 30% of society and wonder why they deserve the wealth transfer? Because many if not most don't. A lot of people at the bottom of society are leeches who never produce anything useful for society and just feed off the welfare state.

In reality, inheritance tax is a red herring concept, a feel-good policy which never, ever, raises anywhere near the amount of revenue it theoretically promises as the wealthy find ways around it or simply stop producing more wealth. And the argument that it's a double tax, taxing incomes and wealth that has already been taxed at least once, is a valid one. And there's no question it involves class jealousy.

If you really want to increase tax revenues on a significant scale to fund all your pet programs, you have to raise taxes across the middle classes. Not just the wealthy.

+1

Agreed that it is a Double tax. Most of us who are wealthy (in the 10-50M range) don't have ways to shelter the money as it came in. We paid taxes to fed and state on ALL of it (and PAID a ton of $$$ each year). It was income or LT/ST Cap Gains of stock options. That money is ours and it really is not fair to tax it again just because we die. So we will fully utilize all legal methods to ensure our kids don't pay 40-60% in estate taxes. Why wouldn't we?

Also agree that most who say "tax it again" are simply jealous of those who have that much. We got there thru hard work---years of long hours and lower paying jobs at smaller companies in the hopes that the options pan out. Eventually they did---but that doesn't happen for everyone.

Don’t kid yourself. A lot of it has to do with luck. You’re not that exceptional with your work ethic - many people work hard and long hours. You were lucky, that’s what others realize, and you don’t.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wish I did have a solution but I strongly believe the gap between the well off and the poor underlies much of what is going wrong in our society. I’m in favor of something like an inheritance tax. Something where you can leave a reasonable amount of money to each of your children but the rest goes to the government. That’s probably impractical but it might be a start. And by reasonable I mean $5 million or $10 million. Something indexed for inflation. But this idea of having huge amounts of money passed to the next next generation seems a little off to me.

Why does it "seem a little off"? For someone worth 30-40M, they most likely earned that themselves. And most likely paid high taxes on it already (speaking from experience, it is very high----if earned income, no way to not pay taxes/protect it). Why should the government get to tax it again when you die?
If you are smart, they wont as you will pass it on while still alive and use legal trusts to ensure it's not taxed again.
I'm all for taxes, but one and done please.

When I wrote it seems a little off, what I meant was that it's one thing to earn the money yourself and use it to its fullest while you are alive, but to pass on tens of millions to your heirs is what seems off. It's not that I believe the government is so great, but intergenerational wealth transfers are not really in society's best interests, in my opinion. I'm just saying that there is value to hard work and drive and determination to get the most out of life and I think if you could only inherit $5-10 million, that is probably enough to carry on the legacy of your parent, but not prevent you from reaching your potential. It would prevent, for example, someone never working thinking they have it made forever. I don't know, maybe I'm wrong, but $5-10 million in today's dollars seems like enough to pass along to each heir.

Why do you get to set the amount? Why should someone worth 60M not be able to pass 20M to all 3 of their kids? They can still reach their potential and be contributing members of society. Why do you feel the govt is entitled to part of this money just because someone died?

An individual is limited to about $13 million in gifts per the lifetime exemption, excluding annual gifts of about $17k to as many people as they want. Anything above the $13 results in paying a gift tax. Or, if the money passes along after death estate taxes are due.

Or you simply set up a legal trust so there are no estate taxes. That's what smart people do. Legal and quite simple to do

It doesn’t work like that. If you set up an irrevocable trust, the money you put into it is subject to gift tax. If you set up a revocable trust, the money is still part of your estate for estate tax purposes and subject to estate tax when you die.

Yep. It’s these kinds of ignorant statements that convinces me there are very few actual wealthy people on this board. Most of them are just pretending.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wish I did have a solution but I strongly believe the gap between the well off and the poor underlies much of what is going wrong in our society. I’m in favor of something like an inheritance tax. Something where you can leave a reasonable amount of money to each of your children but the rest goes to the government. That’s probably impractical but it might be a start. And by reasonable I mean $5 million or $10 million. Something indexed for inflation. But this idea of having huge amounts of money passed to the next next generation seems a little off to me.

Why does it "seem a little off"? For someone worth 30-40M, they most likely earned that themselves. And most likely paid high taxes on it already (speaking from experience, it is very high----if earned income, no way to not pay taxes/protect it). Why should the government get to tax it again when you die?
If you are smart, they wont as you will pass it on while still alive and use legal trusts to ensure it's not taxed again.
I'm all for taxes, but one and done please.

When I wrote it seems a little off, what I meant was that it's one thing to earn the money yourself and use it to its fullest while you are alive, but to pass on tens of millions to your heirs is what seems off. It's not that I believe the government is so great, but intergenerational wealth transfers are not really in society's best interests, in my opinion. I'm just saying that there is value to hard work and drive and determination to get the most out of life and I think if you could only inherit $5-10 million, that is probably enough to carry on the legacy of your parent, but not prevent you from reaching your potential. It would prevent, for example, someone never working thinking they have it made forever. I don't know, maybe I'm wrong, but $5-10 million in today's dollars seems like enough to pass along to each heir.

Why do you get to set the amount? Why should someone worth 60M not be able to pass 20M to all 3 of their kids? They can still reach their potential and be contributing members of society. Why do you feel the govt is entitled to part of this money just because someone died?

An individual is limited to about $13 million in gifts per the lifetime exemption, excluding annual gifts of about $17k to as many people as they want. Anything above the $13 results in paying a gift tax. Or, if the money passes along after death estate taxes are due.

Or you simply set up a legal trust so there are no estate taxes. That's what smart people do. Legal and quite simple to do

It doesn’t work like that. If you set up an irrevocable trust, the money you put into it is subject to gift tax. If you set up a revocable trust, the money is still part of your estate for estate tax purposes and subject to estate tax when you die.

Incorrect! There is no gift tax on an irrevocable trust if the assets put into it are less than the lifetime exemption which is currently around $13 million for an individual. After 2025 that exemption will be reduced at least by half.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wish I did have a solution but I strongly believe the gap between the well off and the poor underlies much of what is going wrong in our society. I’m in favor of something like an inheritance tax. Something where you can leave a reasonable amount of money to each of your children but the rest goes to the government. That’s probably impractical but it might be a start. And by reasonable I mean $5 million or $10 million. Something indexed for inflation. But this idea of having huge amounts of money passed to the next next generation seems a little off to me.

Why does it "seem a little off"? For someone worth 30-40M, they most likely earned that themselves. And most likely paid high taxes on it already (speaking from experience, it is very high----if earned income, no way to not pay taxes/protect it). Why should the government get to tax it again when you die?
If you are smart, they wont as you will pass it on while still alive and use legal trusts to ensure it's not taxed again.
I'm all for taxes, but one and done please.

When I wrote it seems a little off, what I meant was that it's one thing to earn the money yourself and use it to its fullest while you are alive, but to pass on tens of millions to your heirs is what seems off. It's not that I believe the government is so great, but intergenerational wealth transfers are not really in society's best interests, in my opinion. I'm just saying that there is value to hard work and drive and determination to get the most out of life and I think if you could only inherit $5-10 million, that is probably enough to carry on the legacy of your parent, but not prevent you from reaching your potential. It would prevent, for example, someone never working thinking they have it made forever. I don't know, maybe I'm wrong, but $5-10 million in today's dollars seems like enough to pass along to each heir.

Why do you get to set the amount? Why should someone worth 60M not be able to pass 20M to all 3 of their kids? They can still reach their potential and be contributing members of society. Why do you feel the govt is entitled to part of this money just because someone died?

An individual is limited to about $13 million in gifts per the lifetime exemption, excluding annual gifts of about $17k to as many people as they want. Anything above the $13 results in paying a gift tax. Or, if the money passes along after death estate taxes are due.

Or you simply set up a legal trust so there are no estate taxes. That's what smart people do. Legal and quite simple to do

It doesn’t work like that. If you set up an irrevocable trust, the money you put into it is subject to gift tax. If you set up a revocable trust, the money is still part of your estate for estate tax purposes and subject to estate tax when you die.

Incorrect! There is no gift tax on an irrevocable trust if the assets put into it are less than the lifetime exemption which is currently around $13 million for an individual. After 2025 that exemption will be reduced at least by half.

They are still subject to gift tax; they eat up your exemption, which also applies to the estate tax.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wish I did have a solution but I strongly believe the gap between the well off and the poor underlies much of what is going wrong in our society. I’m in favor of something like an inheritance tax. Something where you can leave a reasonable amount of money to each of your children but the rest goes to the government. That’s probably impractical but it might be a start. And by reasonable I mean $5 million or $10 million. Something indexed for inflation. But this idea of having huge amounts of money passed to the next next generation seems a little off to me.

Why does it "seem a little off"? For someone worth 30-40M, they most likely earned that themselves. And most likely paid high taxes on it already (speaking from experience, it is very high----if earned income, no way to not pay taxes/protect it). Why should the government get to tax it again when you die?
If you are smart, they wont as you will pass it on while still alive and use legal trusts to ensure it's not taxed again.
I'm all for taxes, but one and done please.

When I wrote it seems a little off, what I meant was that it's one thing to earn the money yourself and use it to its fullest while you are alive, but to pass on tens of millions to your heirs is what seems off. It's not that I believe the government is so great, but intergenerational wealth transfers are not really in society's best interests, in my opinion. I'm just saying that there is value to hard work and drive and determination to get the most out of life and I think if you could only inherit $5-10 million, that is probably enough to carry on the legacy of your parent, but not prevent you from reaching your potential. It would prevent, for example, someone never working thinking they have it made forever. I don't know, maybe I'm wrong, but $5-10 million in today's dollars seems like enough to pass along to each heir.

Why do you get to set the amount? Why should someone worth 60M not be able to pass 20M to all 3 of their kids? They can still reach their potential and be contributing members of society. Why do you feel the govt is entitled to part of this money just because someone died?

An individual is limited to about $13 million in gifts per the lifetime exemption, excluding annual gifts of about $17k to as many people as they want. Anything above the $13 results in paying a gift tax. Or, if the money passes along after death estate taxes are due.

Or you simply set up a legal trust so there are no estate taxes. That's what smart people do. Legal and quite simple to do

It doesn’t work like that. If you set up an irrevocable trust, the money you put into it is subject to gift tax. If you set up a revocable trust, the money is still part of your estate for estate tax purposes and subject to estate tax when you die.

Incorrect! There is no gift tax on an irrevocable trust if the assets put into it are less than the lifetime exemption which is currently around $13 million for an individual. After 2025 that exemption will be reduced at least by half.

If your estate is smaller than the lifetime exemption, you wouldn’t pay estate tax whether you used a trust or not.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wish I did have a solution but I strongly believe the gap between the well off and the poor underlies much of what is going wrong in our society. I’m in favor of something like an inheritance tax. Something where you can leave a reasonable amount of money to each of your children but the rest goes to the government. That’s probably impractical but it might be a start. And by reasonable I mean $5 million or $10 million. Something indexed for inflation. But this idea of having huge amounts of money passed to the next next generation seems a little off to me.

Why does it "seem a little off"? For someone worth 30-40M, they most likely earned that themselves. And most likely paid high taxes on it already (speaking from experience, it is very high----if earned income, no way to not pay taxes/protect it). Why should the government get to tax it again when you die?
If you are smart, they wont as you will pass it on while still alive and use legal trusts to ensure it's not taxed again.
I'm all for taxes, but one and done please.

When I wrote it seems a little off, what I meant was that it's one thing to earn the money yourself and use it to its fullest while you are alive, but to pass on tens of millions to your heirs is what seems off. It's not that I believe the government is so great, but intergenerational wealth transfers are not really in society's best interests, in my opinion. I'm just saying that there is value to hard work and drive and determination to get the most out of life and I think if you could only inherit $5-10 million, that is probably enough to carry on the legacy of your parent, but not prevent you from reaching your potential. It would prevent, for example, someone never working thinking they have it made forever. I don't know, maybe I'm wrong, but $5-10 million in today's dollars seems like enough to pass along to each heir.

Why do you get to set the amount? Why should someone worth 60M not be able to pass 20M to all 3 of their kids? They can still reach their potential and be contributing members of society. Why do you feel the govt is entitled to part of this money just because someone died?

An individual is limited to about $13 million in gifts per the lifetime exemption, excluding annual gifts of about $17k to as many people as they want. Anything above the $13 results in paying a gift tax. Or, if the money passes along after death estate taxes are due.

Or you simply set up a legal trust so there are no estate taxes. That's what smart people do. Legal and quite simple to do

It doesn’t work like that. If you set up an irrevocable trust, the money you put into it is subject to gift tax. If you set up a revocable trust, the money is still part of your estate for estate tax purposes and subject to estate tax when you die.

Incorrect! There is no gift tax on an irrevocable trust if the assets put into it are less than the lifetime exemption which is currently around $13 million for an individual. After 2025 that exemption will be reduced at least by half.

They are still subject to gift tax; they eat up your exemption, which also applies to the estate tax.

You have to file a gift tax return but not pay a gift tax until you exceed $13 million. How do I know? Because I’m closing in on the limit. If you have an irrevocable trust you don’t pay any estate tax because the money is no longer yours thus it is out of your estate when you put it into your trust. When you put in in the trust you’d better be sure you’ll never need it yourself.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wish I did have a solution but I strongly believe the gap between the well off and the poor underlies much of what is going wrong in our society. I’m in favor of something like an inheritance tax. Something where you can leave a reasonable amount of money to each of your children but the rest goes to the government. That’s probably impractical but it might be a start. And by reasonable I mean $5 million or $10 million. Something indexed for inflation. But this idea of having huge amounts of money passed to the next next generation seems a little off to me.

Why does it "seem a little off"? For someone worth 30-40M, they most likely earned that themselves. And most likely paid high taxes on it already (speaking from experience, it is very high----if earned income, no way to not pay taxes/protect it). Why should the government get to tax it again when you die?
If you are smart, they wont as you will pass it on while still alive and use legal trusts to ensure it's not taxed again.
I'm all for taxes, but one and done please.

When I wrote it seems a little off, what I meant was that it's one thing to earn the money yourself and use it to its fullest while you are alive, but to pass on tens of millions to your heirs is what seems off. It's not that I believe the government is so great, but intergenerational wealth transfers are not really in society's best interests, in my opinion. I'm just saying that there is value to hard work and drive and determination to get the most out of life and I think if you could only inherit $5-10 million, that is probably enough to carry on the legacy of your parent, but not prevent you from reaching your potential. It would prevent, for example, someone never working thinking they have it made forever. I don't know, maybe I'm wrong, but $5-10 million in today's dollars seems like enough to pass along to each heir.

Why do you get to set the amount? Why should someone worth 60M not be able to pass 20M to all 3 of their kids? They can still reach their potential and be contributing members of society. Why do you feel the govt is entitled to part of this money just because someone died?

An individual is limited to about $13 million in gifts per the lifetime exemption, excluding annual gifts of about $17k to as many people as they want. Anything above the $13 results in paying a gift tax. Or, if the money passes along after death estate taxes are due.

Or you simply set up a legal trust so there are no estate taxes. That's what smart people do. Legal and quite simple to do

It doesn’t work like that. If you set up an irrevocable trust, the money you put into it is subject to gift tax. If you set up a revocable trust, the money is still part of your estate for estate tax purposes and subject to estate tax when you die.

Incorrect! There is no gift tax on an irrevocable trust if the assets put into it are less than the lifetime exemption which is currently around $13 million for an individual. After 2025 that exemption will be reduced at least by half.

They are still subject to gift tax; they eat up your exemption, which also applies to the estate tax.

You have to file a gift tax return but not pay a gift tax until you exceed $13 million. How do I know? Because I’m closing in on the limit. If you have an irrevocable trust you don’t pay any estate tax because the money is no longer yours thus it is out of your estate when you put it into your trust. When you put in in the trust you’d better be sure you’ll never need it yourself.

Ok. And you will now pay estate tax on the first dollar of your estate since you’ve used your unified exemption. Seems you agree that putting the money into a trust isn’t some magic way to avoid gift/estate taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wish I did have a solution but I strongly believe the gap between the well off and the poor underlies much of what is going wrong in our society. I’m in favor of something like an inheritance tax. Something where you can leave a reasonable amount of money to each of your children but the rest goes to the government. That’s probably impractical but it might be a start. And by reasonable I mean $5 million or $10 million. Something indexed for inflation. But this idea of having huge amounts of money passed to the next next generation seems a little off to me.

Why does it "seem a little off"? For someone worth 30-40M, they most likely earned that themselves. And most likely paid high taxes on it already (speaking from experience, it is very high----if earned income, no way to not pay taxes/protect it). Why should the government get to tax it again when you die?
If you are smart, they wont as you will pass it on while still alive and use legal trusts to ensure it's not taxed again.
I'm all for taxes, but one and done please.

When I wrote it seems a little off, what I meant was that it's one thing to earn the money yourself and use it to its fullest while you are alive, but to pass on tens of millions to your heirs is what seems off. It's not that I believe the government is so great, but intergenerational wealth transfers are not really in society's best interests, in my opinion. I'm just saying that there is value to hard work and drive and determination to get the most out of life and I think if you could only inherit $5-10 million, that is probably enough to carry on the legacy of your parent, but not prevent you from reaching your potential. It would prevent, for example, someone never working thinking they have it made forever. I don't know, maybe I'm wrong, but $5-10 million in today's dollars seems like enough to pass along to each heir.

Why do you get to set the amount? Why should someone worth 60M not be able to pass 20M to all 3 of their kids? They can still reach their potential and be contributing members of society. Why do you feel the govt is entitled to part of this money just because someone died?

An individual is limited to about $13 million in gifts per the lifetime exemption, excluding annual gifts of about $17k to as many people as they want. Anything above the $13 results in paying a gift tax. Or, if the money passes along after death estate taxes are due.

Or you simply set up a legal trust so there are no estate taxes. That's what smart people do. Legal and quite simple to do

It doesn’t work like that. If you set up an irrevocable trust, the money you put into it is subject to gift tax. If you set up a revocable trust, the money is still part of your estate for estate tax purposes and subject to estate tax when you die.

Incorrect! There is no gift tax on an irrevocable trust if the assets put into it are less than the lifetime exemption which is currently around $13 million for an individual. After 2025 that exemption will be reduced at least by half.

They are still subject to gift tax; they eat up your exemption, which also applies to the estate tax.

You have to file a gift tax return but not pay a gift tax until you exceed $13 million. How do I know? Because I’m closing in on the limit. If you have an irrevocable trust you don’t pay any estate tax because the money is no longer yours thus it is out of your estate when you put it into your trust. When you put in in the trust you’d better be sure you’ll never need it yourself.

Ok. And you will now pay estate tax on the first dollar of your estate since you’ve used your unified exemption. Seems you agree that putting the money into a trust isn’t some magic way to avoid gift/estate taxes.

No, my plan also includes annual gifting to kids/grandkids (including 529’s) all of whom will also benefit from the trusts, plus whatever is left over in my estate goes to charity either into my donor advised fund or specific charities. The goal is to not pay estate taxes. The annual gifting does not trigger gift taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wish I did have a solution but I strongly believe the gap between the well off and the poor underlies much of what is going wrong in our society. I’m in favor of something like an inheritance tax. Something where you can leave a reasonable amount of money to each of your children but the rest goes to the government. That’s probably impractical but it might be a start. And by reasonable I mean $5 million or $10 million. Something indexed for inflation. But this idea of having huge amounts of money passed to the next next generation seems a little off to me.

Why does it "seem a little off"? For someone worth 30-40M, they most likely earned that themselves. And most likely paid high taxes on it already (speaking from experience, it is very high----if earned income, no way to not pay taxes/protect it). Why should the government get to tax it again when you die?
If you are smart, they wont as you will pass it on while still alive and use legal trusts to ensure it's not taxed again.
I'm all for taxes, but one and done please.

When I wrote it seems a little off, what I meant was that it's one thing to earn the money yourself and use it to its fullest while you are alive, but to pass on tens of millions to your heirs is what seems off. It's not that I believe the government is so great, but intergenerational wealth transfers are not really in society's best interests, in my opinion. I'm just saying that there is value to hard work and drive and determination to get the most out of life and I think if you could only inherit $5-10 million, that is probably enough to carry on the legacy of your parent, but not prevent you from reaching your potential. It would prevent, for example, someone never working thinking they have it made forever. I don't know, maybe I'm wrong, but $5-10 million in today's dollars seems like enough to pass along to each heir.

Why do you get to set the amount? Why should someone worth 60M not be able to pass 20M to all 3 of their kids? They can still reach their potential and be contributing members of society. Why do you feel the govt is entitled to part of this money just because someone died?

An individual is limited to about $13 million in gifts per the lifetime exemption, excluding annual gifts of about $17k to as many people as they want. Anything above the $13 results in paying a gift tax. Or, if the money passes along after death estate taxes are due.

Or you simply set up a legal trust so there are no estate taxes. That's what smart people do. Legal and quite simple to do

It doesn’t work like that. If you set up an irrevocable trust, the money you put into it is subject to gift tax. If you set up a revocable trust, the money is still part of your estate for estate tax purposes and subject to estate tax when you die.

Incorrect! There is no gift tax on an irrevocable trust if the assets put into it are less than the lifetime exemption which is currently around $13 million for an individual. After 2025 that exemption will be reduced at least by half.

They are still subject to gift tax; they eat up your exemption, which also applies to the estate tax.

You have to file a gift tax return but not pay a gift tax until you exceed $13 million. How do I know? Because I’m closing in on the limit. If you have an irrevocable trust you don’t pay any estate tax because the money is no longer yours thus it is out of your estate when you put it into your trust. When you put in in the trust you’d better be sure you’ll never need it yourself.

Bingo! But the wealthy do use these trusts to avoid the gift tax maximum. That is how you protect more than $13M per person. They are accessible to the remaining spouse and the kids (or whomever you set up) within the parameters established.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wish I did have a solution but I strongly believe the gap between the well off and the poor underlies much of what is going wrong in our society. I’m in favor of something like an inheritance tax. Something where you can leave a reasonable amount of money to each of your children but the rest goes to the government. That’s probably impractical but it might be a start. And by reasonable I mean $5 million or $10 million. Something indexed for inflation. But this idea of having huge amounts of money passed to the next next generation seems a little off to me.

Why does it "seem a little off"? For someone worth 30-40M, they most likely earned that themselves. And most likely paid high taxes on it already (speaking from experience, it is very high----if earned income, no way to not pay taxes/protect it). Why should the government get to tax it again when you die?
If you are smart, they wont as you will pass it on while still alive and use legal trusts to ensure it's not taxed again.
I'm all for taxes, but one and done please.

When I wrote it seems a little off, what I meant was that it's one thing to earn the money yourself and use it to its fullest while you are alive, but to pass on tens of millions to your heirs is what seems off. It's not that I believe the government is so great, but intergenerational wealth transfers are not really in society's best interests, in my opinion. I'm just saying that there is value to hard work and drive and determination to get the most out of life and I think if you could only inherit $5-10 million, that is probably enough to carry on the legacy of your parent, but not prevent you from reaching your potential. It would prevent, for example, someone never working thinking they have it made forever. I don't know, maybe I'm wrong, but $5-10 million in today's dollars seems like enough to pass along to each heir.

Why do you get to set the amount? Why should someone worth 60M not be able to pass 20M to all 3 of their kids? They can still reach their potential and be contributing members of society. Why do you feel the govt is entitled to part of this money just because someone died?

An individual is limited to about $13 million in gifts per the lifetime exemption, excluding annual gifts of about $17k to as many people as they want. Anything above the $13 results in paying a gift tax. Or, if the money passes along after death estate taxes are due.

Or you simply set up a legal trust so there are no estate taxes. That's what smart people do. Legal and quite simple to do

It doesn’t work like that. If you set up an irrevocable trust, the money you put into it is subject to gift tax. If you set up a revocable trust, the money is still part of your estate for estate tax purposes and subject to estate tax when you die.

Incorrect! There is no gift tax on an irrevocable trust if the assets put into it are less than the lifetime exemption which is currently around $13 million for an individual. After 2025 that exemption will be reduced at least by half.

They are still subject to gift tax; they eat up your exemption, which also applies to the estate tax.

You have to file a gift tax return but not pay a gift tax until you exceed $13 million. How do I know? Because I’m closing in on the limit. If you have an irrevocable trust you don’t pay any estate tax because the money is no longer yours thus it is out of your estate when you put it into your trust. When you put in in the trust you’d better be sure you’ll never need it yourself.

Bingo! But the wealthy do use these trusts to avoid the gift tax maximum. That is how you protect more than $13M per person. They are accessible to the remaining spouse and the kids (or whomever you set up) within the parameters established.

What you put into an irrevocable trust does go against your $13 million lifetime exemption. But people with $100 million plus have access to very sophisticated but expensive estate planning.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm rather agnostic on the topic of raising inheritance taxes on the very rich. Yes, it's easy to look at the top 1% and think, my god, they have so much money. But then I look at the bottom 20 or 30% of society and wonder why they deserve the wealth transfer? Because many if not most don't. A lot of people at the bottom of society are leeches who never produce anything useful for society and just feed off the welfare state.

In reality, inheritance tax is a red herring concept, a feel-good policy which never, ever, raises anywhere near the amount of revenue it theoretically promises as the wealthy find ways around it or simply stop producing more wealth. And the argument that it's a double tax, taxing incomes and wealth that has already been taxed at least once, is a valid one. And there's no question it involves class jealousy.

If you really want to increase tax revenues on a significant scale to fund all your pet programs, you have to raise taxes across the middle classes. Not just the wealthy.

+1

Agreed that it is a Double tax. Most of us who are wealthy (in the 10-50M range) don't have ways to shelter the money as it came in. We paid taxes to fed and state on ALL of it (and PAID a ton of $$$ each year). It was income or LT/ST Cap Gains of stock options. That money is ours and it really is not fair to tax it again just because we die. So we will fully utilize all legal methods to ensure our kids don't pay 40-60% in estate taxes. Why wouldn't we?

Also agree that most who say "tax it again" are simply jealous of those who have that much. We got there thru hard work---years of long hours and lower paying jobs at smaller companies in the hopes that the options pan out. Eventually they did---but that doesn't happen for everyone.

Don’t kid yourself. A lot of it has to do with luck. You’re not that exceptional with your work ethic - many people work hard and long hours. You were lucky, that’s what others realize, and you don’t.

^^^^ this x a million

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm rather agnostic on the topic of raising inheritance taxes on the very rich. Yes, it's easy to look at the top 1% and think, my god, they have so much money. But then I look at the bottom 20 or 30% of society and wonder why they deserve the wealth transfer? Because many if not most don't. A lot of people at the bottom of society are leeches who never produce anything useful for society and just feed off the welfare state.

In reality, inheritance tax is a red herring concept, a feel-good policy which never, ever, raises anywhere near the amount of revenue it theoretically promises as the wealthy find ways around it or simply stop producing more wealth. And the argument that it's a double tax, taxing incomes and wealth that has already been taxed at least once, is a valid one. And there's no question it involves class jealousy.

If you really want to increase tax revenues on a significant scale to fund all your pet programs, you have to raise taxes across the middle classes. Not just the wealthy.

+1

Agreed that it is a Double tax. Most of us who are wealthy (in the 10-50M range) don't have ways to shelter the money as it came in. We paid taxes to fed and state on ALL of it (and PAID a ton of $$$ each year). It was income or LT/ST Cap Gains of stock options. That money is ours and it really is not fair to tax it again just because we die. So we will fully utilize all legal methods to ensure our kids don't pay 40-60% in estate taxes. Why wouldn't we?

Also agree that most who say "tax it again" are simply jealous of those who have that much. We got there thru hard work---years of long hours and lower paying jobs at smaller companies in the hopes that the options pan out. Eventually they did---but that doesn't happen for everyone.

Don’t kid yourself. A lot of it has to do with luck. You’re not that exceptional with your work ethic - many people work hard and long hours. You were lucky, that’s what others realize, and you don’t.

Luck can play a role along with hard work if you are in the right place at the right time. But for many high worth people they pursue high risk/high reward opportunities where they put their own money on the line. To do that you need some money, guts and a very supportive spouse.

[Anonymous]

My friend comes from generational wealth and has borrowed against her future inheritance, which probably would have been between $500k-$1m. (Even with a parent who was one of eight, and having over a dozen cousins.) I visited her grandparents estate once - there’s really no other word for it - and their “guest house” was larger than most people’s homes.

For context, they hosted one of Reagan’s inaugural parties.

[Anonymous]

My DH has about $10M in a brokerage account that was left in trust for him from his grandparents, but is now his outright. He and I both work, but it lets us choose jobs that matter, rather than are renumerative. It also pays for vacations, private school, and out of network mental health care for one child. It also enables us to make sizable charitable contributions.