The amount of people living subsidized by their parents is astounding

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Yes most are well aware of that. Some of us live in states where the estate tax starts at $2m or so. Also some of us are/will be worth more than the 14M *2 so we need to plan. And a simple part of it is to gift the max yearly. $38K to each kid and same to their spouses. They get the money now when it matters more and we help avoid estate taxes at death

God forbid some portion of a rich person’s estate goes to taxes. Wouldn’t want any of that cash funding the greater good or anything.

Taxes fund "the greater good" - gimme a break. Wealthy people minimize giving funds to the government because Congress spends recklessly. The greater good is in the eye of the beholder, but it's certainly not prioritized in Washington, DC.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Yes most are well aware of that. Some of us live in states where the estate tax starts at $2m or so. Also some of us are/will be worth more than the 14M *2 so we need to plan. And a simple part of it is to gift the max yearly. $38K to each kid and same to their spouses. They get the money now when it matters more and we help avoid estate taxes at death

.06% of the population have an estate worth $28MM+.

If it matters more for them to have the money now, then give them $1MM now (which in theory reduces the estate that will pass on death).

Do you think it matters much if they have to pay some tax on the excess above $28MM when you die?

Okay, but many, many people have estates more than the state exemptions. Maryland is currently 5M per person and proposals are on the table to reduce it to 2M.

[Anonymous]

Anonymous wrote:Would it help to hear about all the lazy/dumb ways I have squandered family money, or would it make it worse?

Let's hear it.

Ours is spent on vacations: business class flights for the whole family, guided tours, chartered yachts, Michelin star meals. And also private school tuition, travel sports, paid off house & cars.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Yes most are well aware of that. Some of us live in states where the estate tax starts at $2m or so. Also some of us are/will be worth more than the 14M *2 so we need to plan. And a simple part of it is to gift the max yearly. $38K to each kid and same to their spouses. They get the money now when it matters more and we help avoid estate taxes at death

God forbid some portion of a rich person’s estate goes to taxes. Wouldn’t want any of that cash funding the greater good or anything.

Taxes fund "the greater good" - gimme a break. Wealthy people minimize giving funds to the government because Congress spends recklessly. The greater good is in the eye of the beholder, but it's certainly not prioritized in Washington, DC.

Careful, your ignorance is showing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Except they often pay bills directly which is not really tracked. They pay their grandkids college tuition directly to school and money is just magically gone.

anyone can pay anyone's medical or education costs for any reason and it is not an IRS event

Medical too?? What about groceries, summer camps, etc.?

So there really is no limit on the exemption? The "limit" is $19K this year, or really $38K since there are two grandparents. So they could give $38K to their kid, $38K to spouse, $38K to each grandkid, plus pay all their living expenses??? Presumably at least they can't pay mortgage or car payments since those are tangible assets, but still...

And what exactly is your issue with this, other than your personal jealously?

There are plenty of legal means with trusts to transfer wealth to avoid estate taxes. Smart people utilize that, as most of us have paid 50%+ in taxes on it already

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Were you thinking that the kids/grandkids receiving 38K per year weren't going to inherit more than 14M each?

Well, no they won’t…considering a very small amount of people in the entire country have that amount of money. Only 225,000 people in the entire US to be exact.

Most of the kids getting their $19k or $38k don’t have parents that are UHNW…more like $10MM-$15MM parents (the total exemption is $28MM).

Because firstly it still makes sense to gift it to your kids in their 20/30s versus in their 50s. And there are states with estate taxes with much lower thresholds.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m one of those people – my parents gift me the $36,000 max every year. Why do you care?

Everyone’s dealt a different hand in life. I have that annual gift but had issues with mental health in the past which mean that I’ll never work the type of jobs that pay more than $100-$150K per year.

I don’t think the OP is referring to people like you. More like the example above where the parents clearly purchased a multi-million home for their kid and pay private tuition for the grandkids.

Dude even $36k a year in gifted money is insane. I make a pretty solid income by most standards and haven’t even seen 1/10th of this in the form of gifts in any given year. I would be exceedingly grateful to have someone give me that much, especially tax free, every 12 months. I think the most we ever got was $3000 to help with our wedding, which I still really appreciated.

I know my kids are extremely grateful for the gifts. They use them smartly and to save more. They don't use it yet to smassively supplement their lifestyles. They are saving for a downpayment and this way will have $150-200k in a few years

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Yes most are well aware of that. Some of us live in states where the estate tax starts at $2m or so. Also some of us are/will be worth more than the 14M *2 so we need to plan. And a simple part of it is to gift the max yearly. $38K to each kid and same to their spouses. They get the money now when it matters more and we help avoid estate taxes at death

.06% of the population have an estate worth $28MM+.

If it matters more for them to have the money now, then give them $1MM now (which in theory reduces the estate that will pass on death).

Do you think it matters much if they have to pay some tax on the excess above $28MM when you die?

Okay, but many, many people have estates more than the state exemptions. Maryland is currently 5M per person and proposals are on the table to reduce it to 2M.

Ok...again, they are paying taxes above $5MM or $2MM and if your kids need the money now vs. when they are 60+, isn't it better to give them say $1.9MM today (which again, lowers the value of the ultimate estate)? Also, if estate and inheritance taxes matter so much and you are this wealthy...wouldn't you obtain residence in a state that doesn't have these taxes? That seems like an absolute no-brainer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Yes most are well aware of that. Some of us live in states where the estate tax starts at $2m or so. Also some of us are/will be worth more than the 14M *2 so we need to plan. And a simple part of it is to gift the max yearly. $38K to each kid and same to their spouses. They get the money now when it matters more and we help avoid estate taxes at death

God forbid some portion of a rich person’s estate goes to taxes. Wouldn’t want any of that cash funding the greater good or anything.

40-50% of it was already taxed. We've already paid tons in taxes. Don't need to pay the state 15-20% and then the fed govt 20-40% when we die.
I've already paid tons into Medicare (no limit on that tax) yet will barely receive much back from that. So yeah we pay shitloads in taxes. We are not hiding stuff, it's all taxed at top rates.
I think we've paid our fair share already. And thankfully there are legal ways to transfer in trusts and with gifting now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Yes most are well aware of that. Some of us live in states where the estate tax starts at $2m or so. Also some of us are/will be worth more than the 14M *2 so we need to plan. And a simple part of it is to gift the max yearly. $38K to each kid and same to their spouses. They get the money now when it matters more and we help avoid estate taxes at death

.06% of the population have an estate worth $28MM+.

If it matters more for them to have the money now, then give them $1MM now (which in theory reduces the estate that will pass on death).

Do you think it matters much if they have to pay some tax on the excess above $28MM when you die?

Okay, but many, many people have estates more than the state exemptions. Maryland is currently 5M per person and proposals are on the table to reduce it to 2M.

Ok...again, they are paying taxes above $5MM or $2MM and if your kids need the money now vs. when they are 60+, isn't it better to give them say $1.9MM today (which again, lowers the value of the ultimate estate)? Also, if estate and inheritance taxes matter so much and you are this wealthy...wouldn't you obtain residence in a state that doesn't have these taxes? That seems like an absolute no-brainer.

I don't need a residence in a tax free state. At our income levels you have to prove you live there 6+ months of the year to call it "home state". I don't want to waste money and have to do that. Instead you use the legal means available. And yes you can transfer larger amounts now in trusts if you truly want to. However we don't need our 24 yo having $2M. By time they want to buy a home they will have enough for a down payment. We want them to have ambitions and live within their means--the gifts are to supplement a downpayment later. And of course once they have kids we will fund their educational needs

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Except they often pay bills directly which is not really tracked. They pay their grandkids college tuition directly to school and money is just magically gone.

anyone can pay anyone's medical or education costs for any reason and it is not an IRS event

Medical too?? What about groceries, summer camps, etc.?

So there really is no limit on the exemption? The "limit" is $19K this year, or really $38K since there are two grandparents. So they could give $38K to their kid, $38K to spouse, $38K to each grandkid, plus pay all their living expenses??? Presumably at least they can't pay mortgage or car payments since those are tangible assets, but still...

And what exactly is your issue with this, other than your personal jealously?

There are plenty of legal means with trusts to transfer wealth to avoid estate taxes. Smart people utilize that, as most of us have paid 50%+ in taxes on it already

PP you quoted. No jealousy – just don’t understand why they make a pretense of having an exemption limit if there are so many ways around it.

In the example I gave, where everyone in the family is receiving $38,000 a year plus living—and you do that for, say, three kids—the grandparents could easily be giving $500,000 a year while remaining under the exemption limit.

If they do that for 30 years, that’s $15 million. That’s not a serious limit on gifting.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Yes most are well aware of that. Some of us live in states where the estate tax starts at $2m or so. Also some of us are/will be worth more than the 14M *2 so we need to plan. And a simple part of it is to gift the max yearly. $38K to each kid and same to their spouses. They get the money now when it matters more and we help avoid estate taxes at death

.06% of the population have an estate worth $28MM+.

If it matters more for them to have the money now, then give them $1MM now (which in theory reduces the estate that will pass on death).

Do you think it matters much if they have to pay some tax on the excess above $28MM when you die?

Okay, but many, many people have estates more than the state exemptions. Maryland is currently 5M per person and proposals are on the table to reduce it to 2M.

Ok...again, they are paying taxes above $5MM or $2MM and if your kids need the money now vs. when they are 60+, isn't it better to give them say $1.9MM today (which again, lowers the value of the ultimate estate)? Also, if estate and inheritance taxes matter so much and you are this wealthy...wouldn't you obtain residence in a state that doesn't have these taxes? That seems like an absolute no-brainer.

I don't need a residence in a tax free state. At our income levels you have to prove you live there 6+ months of the year to call it "home state". I don't want to waste money and have to do that. Instead you use the legal means available. And yes you can transfer larger amounts now in trusts if you truly want to. However we don't need our 24 yo having $2M. By time they want to buy a home they will have enough for a down payment. We want them to have ambitions and live within their means--the gifts are to supplement a downpayment later. And of course once they have kids we will fund their educational needs

That's very easy to do...not sure why you mention that as some obstacle. Not sure how it is a waste of money if in fact you care about the tax savings on your estate. It's actually an investment, and not a waste of money whatsoever. It actually would have a fantastic return on investment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Yes most are well aware of that. Some of us live in states where the estate tax starts at $2m or so. Also some of us are/will be worth more than the 14M *2 so we need to plan. And a simple part of it is to gift the max yearly. $38K to each kid and same to their spouses. They get the money now when it matters more and we help avoid estate taxes at death

.06% of the population have an estate worth $28MM+.

If it matters more for them to have the money now, then give them $1MM now (which in theory reduces the estate that will pass on death).

Do you think it matters much if they have to pay some tax on the excess above $28MM when you die?

Okay, but many, many people have estates more than the state exemptions. Maryland is currently 5M per person and proposals are on the table to reduce it to 2M.

Ok...again, they are paying taxes above $5MM or $2MM and if your kids need the money now vs. when they are 60+, isn't it better to give them say $1.9MM today (which again, lowers the value of the ultimate estate)? Also, if estate and inheritance taxes matter so much and you are this wealthy...wouldn't you obtain residence in a state that doesn't have these taxes? That seems like an absolute no-brainer.

I don't need a residence in a tax free state. At our income levels you have to prove you live there 6+ months of the year to call it "home state". I don't want to waste money and have to do that. Instead you use the legal means available. And yes you can transfer larger amounts now in trusts if you truly want to. However we don't need our 24 yo having $2M. By time they want to buy a home they will have enough for a down payment. We want them to have ambitions and live within their means--the gifts are to supplement a downpayment later. And of course once they have kids we will fund their educational needs

That's very easy to do...not sure why you mention that as some obstacle. Not sure how it is a waste of money if in fact you care about the tax savings on your estate. It's actually an investment, and not a waste of money whatsoever. It actually would have a fantastic return on investment.

Because I like where I live, and if I travel it will be to different places each time, not to establish residency in a state I don't want to live in. Already have two homes within an hour of each other--one in a city and one on an island so calmer relaxed living

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Well I hope these family freeloaders are generous to the people in the service industry that have to cut their nails, serve their food, and clean up behind them.

They’re almost certainly not. They view these people as fundamentally beneath them - because they have convinced themselves that, as the beneficiaries of generational wealth, they’re God’s chosen people and everyone else is a lesser being who exists to serve them.

I have seen this attitude in this area (and on this site) more times than I can count.

My parents paid for college and my down payment and I’ve also worked plenty of service jobs- retail, waitress and barista.

It’s not just the super wealthy doing this and it’s often just the family norm. My grandparents also helped my parents with these things and DH and I will be helping our kids.

I do know some parents that are against even paying for college though they can afford to. I don’t really get this perspective but, as evidenced in this thread, people have very different values around money

Those parents are smartly educating their children.

No they are not. If the parents are in a financial position to help pay (or fully pay) their kids tuition, they are ensuring that their kids don't needlessly suffer and get into debt. It allows their kids to fully focus on school and enjoy that environment (focus on classes to ensure get good grades, focus on personal development through a good social life, focus on getting internships, even if unpaid, etc).

My parents paid for my college and I am the better for it. Was able to do well academically, build a network, do internships (even if unpaid), get into gradschool and get a good job. Did I take this support for granted? Nope, I realized I am very fortunate. But given the exorbant cost of tuition in this country (much higher than say in Europe or Canada) that help ensures you don't get into crazy amounts of debt.

My parents taught me the importance of education and hard work. They also reinforced that managing finances is important and getting into debt is bad and should be avoided at all costs (when possible). Due to that, I always avoid carrying credit card debt, buy either a used car or lease (with EVs it makes sense to lease) and am trying to pay off the mortgage as quickly as possible to get rid of that debt (got a manageable 800k mortgage 6 years ago, been paying extra so only like 10 years away from paying it off...theow interest rate does help quite a bit though)

[Anonymous]

Anonymous wrote:If I could take my wealth with me when I died, I would not give a cent to my descendents. And I am not rich enough to give it all away in charity. If not my kids and grandkids, then who?

- Gen X parent who is giving all kinds of leg-up to my kids.

+1
bet the Gen-Xer has the opposite experience with their parents