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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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. [/quote]

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.

[/quote]

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.[/quote]

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? [/quote]

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. [/quote]

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[/quote]

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.[/quote]

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. [/quote]

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

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. [/quote]

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.  [/quote]

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. [/quote]

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