Author Topic: Inheritance Drama: You Got Any? Stories Wanted.  (Read 324146 times)

mtn

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1000 on: February 07, 2017, 08:22:43 AM »
Disclaimer: I greatly admire Warren Buffet, and would love to have a beer milkshake with the guy and talk about literally anything.

Buffet has so much money that his statements are slightly skewed. He could leave his kids only .001% (1/10,000) of his net worth, and they would still be considered independently wealthy (this is completely ignoring any and all taxes and assuming his net worth is all in cash, which is obviously completely missing the point). Yes, he is doing more good than almost anyone, and I greatly admire him, but don't think that he's not leaving his kids a fortune. It just isn't one of the largest fortunes in history that will be left to them.


MMMaybe

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1001 on: February 09, 2017, 05:35:15 AM »
I think I just got my first taste of whats to come. My in-laws made us walk around their house and put our names on things we wanted to inherit. I found it really awkward, like being a vulture!

mtn

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1002 on: February 09, 2017, 08:10:16 AM »
I think I just got my first taste of whats to come. My in-laws made us walk around their house and put our names on things we wanted to inherit. I found it really awkward, like being a vulture!

How did your spouse feel though? That stuff probably feels like hers/his anyways.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1003 on: February 09, 2017, 09:09:06 AM »
Personally I really admire how both Buffett and Gates have handled the succession issue.

I admire what Buffett and Gates do because I think it makes them good people, but that doesn't mean I think their actions should be law.  Personally, I'm of the mind that estates should pass how the person who has the estate wants, and the state has no right to that money.  If the person who earned or otherwise held the money thinks it should go to their Paris Hilton-esque daughter to blow in a lifetime of partying and drugs and bullshit, so be it; I don't think the government should get their greedy hooks in it.
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Chris22

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1004 on: February 09, 2017, 09:17:21 AM »
I think I just got my first taste of whats to come. My in-laws made us walk around their house and put our names on things we wanted to inherit. I found it really awkward, like being a vulture!

My grandmother recently passed, and because most of her/our family is scattered pretty far around the country, we took some time when we were all in town for the funeral (grandkids/spouses, kids/spouses, etc) and went through her whole house and distributed as much as could be while everyone was there.  Did feel a little odd to do that the night of the wake/before the funeral (i.e., she wasn't even buried yet) but it made practical sense.  And honestly, she had plenty of "stuff" but almost none of it was anything anyone really wanted.  The Waterford crystal and china was distributed amongst the granddaughters and female grand-spouses, a few more valuable pieces of jewelry to the daughter and female spouses of the sons and the rest to the grandkids as they wanted, and then the odd picture or other memento was claimed, but in reality there is a whole small townhome's worth of stuff that no one really wants and is hard to give away.  Sadly, most of it just went into a dumpster.  The fortunate thing was that even though that side of the family doesn't always get along, the whole process with like 15 of us in the house was very civil and no one got bent out of shape about anything.  Anything saleable remaining (house, car, etc) will be sold and distributed equally to the three children of my grandma.
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mtn

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1005 on: February 09, 2017, 09:32:14 AM »
Personally I really admire how both Buffett and Gates have handled the succession issue.

I admire what Buffett and Gates do because I think it makes them good people, but that doesn't mean I think their actions should be law.  Personally, I'm of the mind that estates should pass how the person who has the estate wants, and the state has no right to that money.  If the person who earned or otherwise held the money thinks it should go to their Paris Hilton-esque daughter to blow in a lifetime of partying and drugs and bullshit, so be it; I don't think the government should get their greedy hooks in it.

Not to mention that with the size of their estates it really is a different picture entirely. If they lost roughly 80% of their net worth, they'd still be in the top 50 wealthiest people in the world, or close to it. It is really easy to say "Yeah, I'm going to donate 97% of my estate" when your estate is $2BIL (like the Hilton Fortune) because the remaining 3% is $60MIL.

I've always considered monetary wealth to be around $5,000,000. That gives you an annual residual income of $200k. That is wealthy. But it isn't in the same ballpark, or even same sport as the billionaires of the world. Hell, even with 3 heirs, a $12 million dollar estate doesn't even get each of the heirs the $5 million that I consider to be the wealthy marker.

(Don't dig deep into this--just take it on the surface level. I've left out taxes, the probably leg ups that a child of a 12mil estate has had their entire lives, etc.)

mtn

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1006 on: February 09, 2017, 09:33:25 AM »
I think I just got my first taste of whats to come. My in-laws made us walk around their house and put our names on things we wanted to inherit. I found it really awkward, like being a vulture!

My grandmother recently passed, and because most of her/our family is scattered pretty far around the country, we took some time when we were all in town for the funeral (grandkids/spouses, kids/spouses, etc) and went through her whole house and distributed as much as could be while everyone was there.  Did feel a little odd to do that the night of the wake/before the funeral (i.e., she wasn't even buried yet) but it made practical sense.  And honestly, she had plenty of "stuff" but almost none of it was anything anyone really wanted.  The Waterford crystal and china was distributed amongst the granddaughters and female grand-spouses, a few more valuable pieces of jewelry to the daughter and female spouses of the sons and the rest to the grandkids as they wanted, and then the odd picture or other memento was claimed, but in reality there is a whole small townhome's worth of stuff that no one really wants and is hard to give away.  Sadly, most of it just went into a dumpster.  The fortunate thing was that even though that side of the family doesn't always get along, the whole process with like 15 of us in the house was very civil and no one got bent out of shape about anything.  Anything saleable remaining (house, car, etc) will be sold and distributed equally to the three children of my grandma.

No estate sale?

zolotiyeruki

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1007 on: February 10, 2017, 05:44:56 AM »
Personally, I'm of the mind that estates should pass how the person who has the estate wants, and the state has no right to that money.  If the person who earned or otherwise held the money thinks it should go to their Paris Hilton-esque daughter to blow in a lifetime of partying and drugs and bullshit, so be it; I don't think the government should get their greedy hooks in it.
Yeah, I don't quite understand it either.  If the wealthy person decides to spend the money on a yacht or a mansion or a Bentley or eating at fancy restaurants, there's no extra tax.  But if they want to give it to their kids (upon their death), then the tax man demands an extra pound of flesh.  You can do the whole $14k-per-year thing, but it's not practical for large estates, and you also run the risk of depleting your assets too soon if you live too long.

Other than a blatant grab for cash, what's the purpose behind an inheritance tax?  What is the negative outcome that such a tax is preventing?

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1008 on: February 10, 2017, 05:47:54 AM »
Personally, I'm of the mind that estates should pass how the person who has the estate wants, and the state has no right to that money.  If the person who earned or otherwise held the money thinks it should go to their Paris Hilton-esque daughter to blow in a lifetime of partying and drugs and bullshit, so be it; I don't think the government should get their greedy hooks in it.
Yeah, I don't quite understand it either.  If the wealthy person decides to spend the money on a yacht or a mansion or a Bentley or eating at fancy restaurants, there's no extra tax.  But if they want to give it to their kids (upon their death), then the tax man demands an extra pound of flesh.  You can do the whole $14k-per-year thing, but it's not practical for large estates, and you also run the risk of depleting your assets too soon if you live too long.

Other than a blatant grab for cash, what's the purpose behind an inheritance tax?  What is the negative outcome that such a tax is preventing?
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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1009 on: February 10, 2017, 05:54:31 AM »
Other than a blatant grab for cash, what's the purpose behind an inheritance tax?  What is the negative outcome that such a tax is preventing?
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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1010 on: February 10, 2017, 07:12:24 AM »
Other than a blatant grab for cash, what's the purpose behind an inheritance tax?  What is the negative outcome that such a tax is preventing?

Beyond the moral hazard, the US already has a fairly poor amount of generational movement between the quintiles.  Wealth inequality is associated with social unrest, because the people who are at the bottom don't see any value in playing by the rules. Bread and circuses only work so well.  History shows if you don't give people legitimate opportunity for success, they will find other ways (crime, violence, rebellion) or they will drop out (drugs/alcohol). 

For me, this is much like the question of why we vaccinate, or educate kids.  It doesn't just make it better for them, it makes it better for everyone to live in a society where people have a chance to do cool things.
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talltexan

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1011 on: February 10, 2017, 07:18:06 AM »
perhaps it's my liberal roots showing, but I always saw the orderly transfer of an estate upon death as something that the government guarantees. If there were no government, then big daddy's death would mean the strongest person (perhaps the oldest male heir, perhaps not even someone in the family) would show up and take everything. So government guarantees an orderly transfer of these possessions through the probate process in accordance with the wishes of someone who's no longer even alive.

And, yes, there's a fee to pay for this guarantee, with larger estates paying more.

radram

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1012 on: February 10, 2017, 08:13:05 AM »
Personally, I'm of the mind that estates should pass how the person who has the estate wants, and the state has no right to that money.  If the person who earned or otherwise held the money thinks it should go to their Paris Hilton-esque daughter to blow in a lifetime of partying and drugs and bullshit, so be it; I don't think the government should get their greedy hooks in it.
Yeah, I don't quite understand it either.  If the wealthy person decides to spend the money on a yacht or a mansion or a Bentley or eating at fancy restaurants, there's no extra tax.  But if they want to give it to their kids (upon their death), then the tax man demands an extra pound of flesh.  You can do the whole $14k-per-year thing, but it's not practical for large estates, and you also run the risk of depleting your assets too soon if you live too long.

Other than a blatant grab for cash, what's the purpose behind an inheritance tax?  What is the negative outcome that such a tax is preventing?

I do not understand either of these positions, and I sincerely ask for clarity. Other than the "all taxes are evil" position, I come to this discussion with the premise that SOME taxes are a necessity and the only decision is to be what we tax (losers), and what we do not tax(winners), and of course the percentages of said necessities. If it helps in the conversation, assume that the federal government needs $1(one) dollar to operate on an annual basis, and we are determining the best way to fund it fairly.

I do not understand why the entirety of someone's estate is to automatically be put into the winners column. I understand a certain amount excluded, I would understand treating already taxed net worth differently than unrealized capital gains. I would also understand keeping the original cost basis to defer taxes in order to prevent a forced sale of a family business. I respectfully ask for both of you to further explain why you feel my position is incorrect.

Do you both agree that unrealized gains should continue to be taxed at 0% and stepped up in basis for the first $5 million? What about after that amount. Current taxes for the living maxes out at 20% for long term capital gains, but 39.6% for income. What are your positions as to why this is "fair"?  Max inheritance tax is 40%, very similar to the max income rates. Why should capital gains be taxed at a lower rate than income. To that end, why should my rental income be treated as regular income, but my dividends are not? Why shouldn't all income taxed the same?

Would you both agree that the cost basis should not be taxed at all since it has already been taxed, but any gains, unrealized or not, should eventually be taxed. That may be by the beneficiary when they eventually sell at the ORIGINAL cost basis with the profit taxed at their tax rate.

Why should anyone receive any gain without being taxed eventually, minus reasonable exclusions like primary residence home selling or the multi-millions in inheritance exclusion from taxes as examples?

If I take my income, after it is taxed, and hire someone to do work for me, they will also be taxed on THEIR income. That was originally simply MY already taxed income. I would argue this money should not be taxed well before inheritance money is excluded, they at least did something for it. Why should an inheritance get MORE favorable treatment than labor?

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1013 on: February 10, 2017, 08:30:08 AM »
I have a positive story. Recently we learned that DH's sister updated the will of she and her husband. They have two children, one of whom Is estranged. The not- estranged child insisted that his sister be named as equally inheriting. He said "if you dont give her half, I will give her half when you die anyway, so either way she's going to get half."

He is a good kid. They are both good kids.

The estranged one is a solid citizen, she is just permenantly mad at her parents for reasons I no longer try to understand. She would not blow the money, and there is a fair amount, probably a couple million.

lhamo

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1014 on: February 10, 2017, 08:42:41 AM »
You can do the whole $14k-per-year thing, but it's not practical for large estates, and you also run the risk of depleting your assets too soon if you live too long.

Anybody who is in federal estate tax territory is NOT going to deplete their assets by giving their kids/grandkids 14k/year.   As noted upthread, state taxes may be a different ballgame.

I don't see why this isn't practical.   Seems like an excellent way for those near the federal taxable thresholds to ensure they limit the taxes and maximize money going to the family.   
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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1015 on: February 10, 2017, 09:02:10 AM »
Personally, I'm of the mind that estates should pass how the person who has the estate wants, and the state has no right to that money.  If the person who earned or otherwise held the money thinks it should go to their Paris Hilton-esque daughter to blow in a lifetime of partying and drugs and bullshit, so be it; I don't think the government should get their greedy hooks in it.
Yeah, I don't quite understand it either.  If the wealthy person decides to spend the money on a yacht or a mansion or a Bentley or eating at fancy restaurants, there's no extra tax.  But if they want to give it to their kids (upon their death), then the tax man demands an extra pound of flesh.  You can do the whole $14k-per-year thing, but it's not practical for large estates, and you also run the risk of depleting your assets too soon if you live too long.

Other than a blatant grab for cash, what's the purpose behind an inheritance tax?  What is the negative outcome that such a tax is preventing?

So far as I know, everything you mentioned is taxed. There are indeed taxes on real estate (property tax and sometimes state tax), on vehicles (registration and state taxes), at restaurants (sales taxes), and any other way a person might spend the money. Hookers and blow might be the exception, but only because people who sell illegal things aren't known for being proactive in collecting and remitting tax. If there was a viable way to tax hookers and blow, governments would do that too.
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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1016 on: February 10, 2017, 09:17:50 AM »
You can do the whole $14k-per-year thing, but it's not practical for large estates, and you also run the risk of depleting your assets too soon if you live too long.

Anybody who is in federal estate tax territory is NOT going to deplete their assets by giving their kids/grandkids 14k/year.   As noted upthread, state taxes may be a different ballgame.

I don't see why this isn't practical.   Seems like an excellent way for those near the federal taxable thresholds to ensure they limit the taxes and maximize money going to the family.

After consultation with a CPA, we are doing this - well, at least we are prepared to do this - in my family.  529 5-year gifting is also another excellent addition to the tool set.

The two tricks seem to be to be aware of the situation before the crossover point and have enough beneficiaries that you like.  If you only have one kid and your estate is growing at 10% through the ~$5.5M estate tax exemption number that is growing at inflation, you're going to have a problem because you can't give the money away fast enough.  In our particular scenario, the estate is expected to grow at about 8% and there are 12 beneficiaries, and so if we see it getting close to the limit, full-on gifting to everyone can keep it below the limit.

We also are careful not to go to far the other way; it is a first priority that the money is there to take care of the person who worked very hard to earn it his entire life.  In our case it doesn't look like this will be a problem.

No state inheritance or estate taxes in our case.
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TomTX

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1017 on: February 10, 2017, 09:22:28 AM »
Personally, I'm of the mind that estates should pass how the person who has the estate wants, and the state has no right to that money.  If the person who earned or otherwise held the money thinks it should go to their Paris Hilton-esque daughter to blow in a lifetime of partying and drugs and bullshit, so be it; I don't think the government should get their greedy hooks in it.
Yeah, I don't quite understand it either.  If the wealthy person decides to spend the money on a yacht or a mansion or a Bentley or eating at fancy restaurants, there's no extra tax.  But if they want to give it to their kids (upon their death), then the tax man demands an extra pound of flesh.  You can do the whole $14k-per-year thing, but it's not practical for large estates, and you also run the risk of depleting your assets too soon if you live too long.

Other than a blatant grab for cash, what's the purpose behind an inheritance tax?  What is the negative outcome that such a tax is preventing?

Really? What restaurants outside of Delaware have no sales tax? If i buy a Bentley there is sales tax, pkus registration and inspection tax.

Transfers of money are often taxed
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JrDoctor

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1018 on: February 10, 2017, 10:57:35 AM »
How do you combat this? My mom has suddenly (at least that her DD's knew of) turned into the worst example of US Conservative there is. Racist, prejudiced, intolerant, etc. If you don't discuss politics or current events, you'd never know.

I have no idea, sadly racism often goes with stupidity.  A few nights ago a patient started getting racist about the foreign doctors in A&E.  Of four of us I was the only 'English' doctor (ironically not born in England but white so that was good enough for the patient).  The racist ignoramus didn't realise there would be no A&E service without foreign doctors.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1019 on: February 10, 2017, 11:46:50 AM »
How do you combat this? My mom has suddenly (at least that her DD's knew of) turned into the worst example of US Conservative there is. Racist, prejudiced, intolerant, etc. If you don't discuss politics or current events, you'd never know.

I have no idea, sadly racism often goes with stupidity.  A few nights ago a patient started getting racist about the foreign doctors in A&E.  Of four of us I was the only 'English' doctor (ironically not born in England but white so that was good enough for the patient).  The racist ignoramus didn't realise there would be no A&E service without foreign doctors.
Sadly, hate is taught and is based on fear. Hard as it seems to muster, a grain of empathy that the person in question was taught by bigots might help a tiny bit. In the case of dementia, once the rational mind has checked out, fear and paranoia often step in to fill the gap. Hateful, absolutely, but not always within the hater's control, strange as that sounds.

MIL has Alzheimer's. She hasn't seen her wildly dysfunctional daughter in four years, yet any time something goes missing, she says "SuzieQ took it when she was here the other day." Um, no. Once, we were sitting in the car, waiting for DH to return from a seperate errand. She was in the back seat. A man of color approached, on his way you his own car. She reached over and locked her door. Asshole. I constantly have to tell myself that she can't help it. Constantly. Did I mention constantly?
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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1020 on: February 10, 2017, 12:22:20 PM »
You can do the whole $14k-per-year thing, but it's not practical for large estates, and you also run the risk of depleting your assets too soon if you live too long.

Anybody who is in federal estate tax territory is NOT going to deplete their assets by giving their kids/grandkids 14k/year.   As noted upthread, state taxes may be a different ballgame.

I don't see why this isn't practical.   Seems like an excellent way for those near the federal taxable thresholds to ensure they limit the taxes and maximize money going to the family.
Remember that it is $14k per person. A couple with 3 married kids could transfer $162k per year. Each unmarried grandkid, nephew and whatnot is another $28k per year
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Paul der Krake

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1021 on: February 10, 2017, 12:41:27 PM »
You can do the whole $14k-per-year thing, but it's not practical for large estates, and you also run the risk of depleting your assets too soon if you live too long.

Anybody who is in federal estate tax territory is NOT going to deplete their assets by giving their kids/grandkids 14k/year.   As noted upthread, state taxes may be a different ballgame.

I don't see why this isn't practical.   Seems like an excellent way for those near the federal taxable thresholds to ensure they limit the taxes and maximize money going to the family.
Remember that it is $14k per person. A couple with 3 married kids could transfer $162k per year. Each unmarried grandkid, nephew and whatnot is another $28k per year
Yup. And people who are well into the federal estate tax territory hopefully don't start their estate planning 6 months before croaking. Say you expect to die at 85 (the wealthy tend to live longer than most), at 70 you've already been retired a couple of years and know what your future looks like. You can start your "exit strategy" and give away millions over the next decade+, provided you have enough heirs and charitable recipients. You do this every January 1 by sitting down with your spouse and writing all your checks for the year in 30 minutes.

Tasty Pinecones

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1022 on: February 10, 2017, 02:59:37 PM »
Could you cash those checks and just put it in the safe? I mean its your money - who is to say you don't like to spend alot? Then hand over the cash to the family later when you feel like it?

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1023 on: February 10, 2017, 05:12:09 PM »
Could you cash those checks and just put it in the safe? I mean its your money - who is to say you don't like to spend alot? Then hand over the cash to the family later when you feel like it?

Sure, but cash on hand, if it's still "yours", is counted for the purposes of estate taxes.  I thought the discussion was about how to avoid estate taxes.  Unless you've completed the gift, it would still be included in your estate.

Also, if you accumulated several years' worth of giving in your safe, then when you did hand it over, you might run afoul of the $14K per person per year limit, which would either result in gift taxes or a reduction in your estate tax exemption later when you did pass away.

Or, if you did have a safe full of cash and didn't declare it, then you'd probably be committing federal felonious tax evasion and/or perjury if you later sign an income tax or estate tax return.
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mary w

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1024 on: February 11, 2017, 11:52:25 AM »
Could you cash those checks and just put it in the safe? I mean its your money - who is to say you don't like to spend alot? Then hand over the cash to the family later when you feel like it?

Sure, but cash on hand, if it's still "yours", is counted for the purposes of estate taxes.  I thought the discussion was about how to avoid estate taxes.  Unless you've completed the gift, it would still be included in your estate.

Also, if you accumulated several years' worth of giving in your safe, then when you did hand it over, you might run afoul of the $14K per person per year limit, which would either result in gift taxes or a reduction in your estate tax exemption later when you did pass away.

Or, if you did have a safe full of cash and didn't declare it, then you'd probably be committing federal felonious tax evasion and/or perjury if you later sign an income tax or estate tax return.

On the plus side though, stacks of cash in a house after the owner dies are likely to generate more stories for this thread...

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1025 on: February 13, 2017, 07:31:13 AM »
Yeah, I don't quite understand it either.  If the wealthy person decides to spend the money on a yacht or a mansion or a Bentley or eating at fancy restaurants, there's no extra tax.  But if they want to give it to their kids (upon their death), then the tax man demands an extra pound of flesh.  You can do the whole $14k-per-year thing, but it's not practical for large estates, and you also run the risk of depleting your assets too soon if you live too long.

Other than a blatant grab for cash, what's the purpose behind an inheritance tax?  What is the negative outcome that such a tax is preventing?

Do you both agree that unrealized gains should continue to be taxed at 0% and stepped up in basis for the first $5 million? What about after that amount. Current taxes for the living maxes out at 20% for long term capital gains, but 39.6% for income. What are your positions as to why this is "fair"?  Max inheritance tax is 40%, very similar to the max income rates. Why should capital gains be taxed at a lower rate than income. To that end, why should my rental income be treated as regular income, but my dividends are not? Why shouldn't all income taxed the same?

Would you both agree that the cost basis should not be taxed at all since it has already been taxed, but any gains, unrealized or not, should eventually be taxed. That may be by the beneficiary when they eventually sell at the ORIGINAL cost basis with the profit taxed at their tax rate.

Why should anyone receive any gain without being taxed eventually, minus reasonable exclusions like primary residence home selling or the multi-millions in inheritance exclusion from taxes as examples?

If I take my income, after it is taxed, and hire someone to do work for me, they will also be taxed on THEIR income. That was originally simply MY already taxed income. I would argue this money should not be taxed well before inheritance money is excluded, they at least did something for it. Why should an inheritance get MORE favorable treatment than labor?
Interesting--I was unaware that the basis was reset on inheritance.  I think that either the basis should remain as-is OR the money gets taxed when transferred.  Or allow the inheritors to stick it in an IRA :D

Why do I oppose an inheritance tax?  I believe any burden a government places on citizens should be tied to some benefit the government provides in exchange, e.g. gas taxes that pay for road maintenance, income and sales taxes that fund the law enforcement,and a judicial system that ensure stability and predictability, social security taxes that pay retirees (even if I wish I could opt out of it, at least the taxes are directly related to a govt function).  Inheritance taxes aren't tied to a government function of any sort, other than what talltexan mentioned about ensuring the orderly transferring of the estate.
Really? What restaurants outside of Delaware have no sales tax? If i buy a Bentley there is sales tax, pkus registration and inspection tax.

Transfers of money are often taxed
To clarify, I said "extra" taxes. Whether Grandpa Moneybags spends the money on a yacht, or his kids spend it on Gucci purses, it'll get taxed at that point.
« Last Edit: February 13, 2017, 09:03:32 AM by zolotiyeruki »

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1026 on: February 13, 2017, 07:51:36 AM »

Interesting--I was unaware that the basis was reset on inheritance.  I think that either the basis should remain as-is OR the money gets taxed when transferred.  Or allow the inheritors to stick it in an IRA :D


If nothing else, resetting the basis makes sense from a record keeping standpoint.  Maybe this gets less important as brokers have become more computerized... but there will be holdovers for decades even with that.  The beneficiaries may not be able to find records of ownership.  Consider, for instance, the headache in determining the basis on a 100lb bucket of silver coins.  The best guess would be to set the basis at the "newest" coin.

edit: bad quotiness
« Last Edit: February 13, 2017, 10:10:30 AM by Spork »
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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1027 on: February 13, 2017, 09:02:17 AM »

Interesting--I was unaware that the basis was reset on inheritance.  I think that either the basis should remain as-is OR the money gets taxed when transferred.  Or allow the inheritors to stick it in an IRA :D



If nothing else, resetting the basis makes sense from a record keeping standpoint.  Maybe this gets less important as brokers have become more computerized... but there will be holdovers for decades even with that.  The beneficiaries may not be able to find records of ownership.  Consider, for instance, the headache in determining the basis on a 100lb bucket of silver coins.  The best guess would be to set the basis at the "newest" coin.

I would prefer to tax yearly unrealized gains before accepting that lazy paperwork is a valid reason to allow millions of a persons inheritance  to be transfered to others at a rate of 0%.

How about if you have no paperwork, it is all taxed at the tax rate of the beneficiaries. I have a feeling excellent records would then be kept, don't you?

As a side note, I absolutely HATE the phrase "paying your fair share". I find the phrase absolutely worthless and not at all helpful. I get angry when I hear someone use it. How in the world could a billionaires "fair share" be millions or billions, while an unemployed persons is $0. They are living in the same country. To me, it is all about the fairness of the tax SYSTEM we choose, not in what the overall dollar value one ends up paying. I am sure most billionaires disagree with me.






radram

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1028 on: February 13, 2017, 09:11:11 AM »

Why do I oppose an inheritance tax?  I believe any burden a government places on citizens should be tied to some benefit the government provides in exchange, e.g. gas taxes that pay for road maintenance, income and sales taxes that fund the law enforcement,and a judicial system that ensure stability and predictability, social security taxes that pay retirees (even if I wish I could opt out of it, at least the taxes are directly related to a govt function).  Inheritance taxes aren't tied to a government function of any sort, other than what talltexan mentioned about ensuring the orderly transferring of the estate.


Very interesting position. I could see this as some combination of your overall tax bill, superimposed over those popular charts that show where $1 is spent. I do like the idea of everyone seeing your total tax burden, and where exactly it goes. Maybe people would be a little more aggressive is demanding we pay down the debt. 6% of every dollar in 2013 was used to pay interest on debt.

It could lead to a more informed dialog, if that is really what we want. I am not so sure the people that make those decisions are in favor of a more informed populous.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1029 on: February 13, 2017, 09:23:12 AM »
I would prefer to tax yearly unrealized gains before accepting that lazy paperwork is a valid reason to allow millions of a persons inheritance  to be transfered to others at a rate of 0%.

How about if you have no paperwork, it is all taxed at the tax rate of the beneficiaries. I have a feeling excellent records would then be kept, don't you?

As a side note, I absolutely HATE the phrase "paying your fair share". I find the phrase absolutely worthless and not at all helpful. I get angry when I hear someone use it. How in the world could a billionaires "fair share" be millions or billions, while an unemployed persons is $0. They are living in the same country. To me, it is all about the fairness of the tax SYSTEM we choose, not in what the overall dollar value one ends up paying. I am sure most billionaires disagree with me.
It *does* seem a bit odd that inheritors get a free Basis reset

When inheriting an IRA, beneficiaries can roll it into their own IRA, or take withdrawals over 5 years and pay income taxes at their marginal rate, if I understand it correctly, so that they don't have to pay the highest marginal rates.

As for the tax system, yeah, the "your fair share" argument really appeals to the less-educated, populist emotions.  It's a bit disingenuous to attack a billionaire for making use of all the legal tax-avoidance strategies available to him/her, while ignoring the system that makes it possible.  To be fair, politicians usually bring it up as an argument to reform the tax system in some way.

Very interesting position. I could see this as some combination of your overall tax bill, superimposed over those popular charts that show where $1 is spent. I do like the idea of everyone seeing your total tax burden, and where exactly it goes. Maybe people would be a little more aggressive is demanding we pay down the debt. 6% of every dollar in 2013 was used to pay interest on debt.

It could lead to a more informed dialog, if that is really what we want. I am not so sure the people that make those decisions are in favor of a more informed populous.
I'm guessing the general population already pays more than 6% of their income on interest as it is, so I'm not sure how effective that argument would be :)  But yeah, I wish government expenditures were better publicized.

Part of the complication of our government system is the fact that we have extra layers of taxation and spending.  For example, some people are bothered because the federal government spends 10x as much on the military as on education, but they forget that education is funded mostly on the state level.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1030 on: February 13, 2017, 09:25:23 AM »
Can we please get this thread back on the original subject? Could you start a new thread for the political and tax discussions?

Thanks.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1031 on: February 14, 2017, 12:51:27 AM »
Can we please get this thread back on the original subject? Could you start a new thread for the political and tax discussions?

Thanks.
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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1032 on: February 16, 2017, 09:05:21 PM »
Can we please get this thread back on the original subject? Could you start a new thread for the political and tax discussions?

Thanks.

As the OP— for whatever tiny authority that grants me— I agree. While interesting on their own, inheritance law and taxes belong in their own separate thread, please.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1033 on: February 17, 2017, 07:38:29 AM »
Can we please get this thread back on the original subject? Could you start a new thread for the political and tax discussions?

Thanks.

I'll own this. It looks like it was me that took the thread in a different direction. Quite honestly, it was a few posts before I realized this conversation was even in this thread. Sorry about that.

I will steer the conversation back to the original thread while still tying in to my runaway post.

I am the executor for my father. We differ politically, but we still have mutual respect for each others position. There is no way either of us will change each others mind. He has never really played by the rules, he believes they are for other people, not him. I am very much a play by the rules kind of person.

He would rather I remove worth from his estate than leave it in his estate to be taxed. I will not, and I keep telling him I will not. It is a crime, and his money is not worth going to jail for. I am not naive, I know it happens, a LOT. Even little things like "take the silverware so Aunt Ruth doesn't get it", or "remove the coin collection from the house when I die" kind of instructions happen all the time. I will not play that game. It does lead to some very interesting conversations, but fewer and fewer of them as time moves on. I guess not really true drama, but it sure could have been, with a potential prison story to boot.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1034 on: February 17, 2017, 03:09:04 PM »
Can we please get this thread back on the original subject? Could you start a new thread for the political and tax discussions?

Thanks.

I'll own this. It looks like it was me that took the thread in a different direction. Quite honestly, it was a few posts before I realized this conversation was even in this thread. Sorry about that.

I will steer the conversation back to the original thread while still tying in to my runaway post.

I am the executor for my father. We differ politically, but we still have mutual respect for each others position. There is no way either of us will change each others mind. He has never really played by the rules, he believes they are for other people, not him. I am very much a play by the rules kind of person.

He would rather I remove worth from his estate than leave it in his estate to be taxed. I will not, and I keep telling him I will not. It is a crime, and his money is not worth going to jail for. I am not naive, I know it happens, a LOT. Even little things like "take the silverware so Aunt Ruth doesn't get it", or "remove the coin collection from the house when I die" kind of instructions happen all the time. I will not play that game. It does lead to some very interesting conversations, but fewer and fewer of them as time moves on. I guess not really true drama, but it sure could have been, with a potential prison story to boot.

What he's proposing is not illegal. He's within his rights to dispose of what he owns before dying.
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radram

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1035 on: February 17, 2017, 03:45:10 PM »
Can we please get this thread back on the original subject? Could you start a new thread for the political and tax discussions?

Thanks.

I'll own this. It looks like it was me that took the thread in a different direction. Quite honestly, it was a few posts before I realized this conversation was even in this thread. Sorry about that.

I will steer the conversation back to the original thread while still tying in to my runaway post.

I am the executor for my father. We differ politically, but we still have mutual respect for each others position. There is no way either of us will change each others mind. He has never really played by the rules, he believes they are for other people, not him. I am very much a play by the rules kind of person.

He would rather I remove worth from his estate than leave it in his estate to be taxed. I will not, and I keep telling him I will not. It is a crime, and his money is not worth going to jail for. I am not naive, I know it happens, a LOT. Even little things like "take the silverware so Aunt Ruth doesn't get it", or "remove the coin collection from the house when I die" kind of instructions happen all the time. I will not play that game. It does lead to some very interesting conversations, but fewer and fewer of them as time moves on. I guess not really true drama, but it sure could have been, with a potential prison story to boot.

What he's proposing is not illegal. He's within his rights to dispose of what he owns before dying.

Not before he dies. He wants me to remove items after his death, and not claim these items as belonging to the estate. I should have phrased that better.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1036 on: February 17, 2017, 04:33:16 PM »
Can we please get this thread back on the original subject? Could you start a new thread for the political and tax discussions?

Thanks.

I'll own this. It looks like it was me that took the thread in a different direction. Quite honestly, it was a few posts before I realized this conversation was even in this thread. Sorry about that.

I will steer the conversation back to the original thread while still tying in to my runaway post.

I am the executor for my father. We differ politically, but we still have mutual respect for each others position. There is no way either of us will change each others mind. He has never really played by the rules, he believes they are for other people, not him. I am very much a play by the rules kind of person.

He would rather I remove worth from his estate than leave it in his estate to be taxed. I will not, and I keep telling him I will not. It is a crime, and his money is not worth going to jail for. I am not naive, I know it happens, a LOT. Even little things like "take the silverware so Aunt Ruth doesn't get it", or "remove the coin collection from the house when I die" kind of instructions happen all the time. I will not play that game. It does lead to some very interesting conversations, but fewer and fewer of them as time moves on. I guess not really true drama, but it sure could have been, with a potential prison story to boot.

What he's proposing is not illegal. He's within his rights to dispose of what he owns before dying.

Not before he dies. He wants me to remove items after his death, and not claim these items as belonging to the estate. I should have phrased that better.

Maybe not worth the cost of updating a will... but it really seems like it would be easier to just specify things like that.  My Mom's/Dad's wills had some line in it (paraphrasing and IANAL) "I reserve the right to attach a list of stuff and designate whom it should go to."  They never created the list... but it seems like they were thinking ahead on giving away the silver to someone other than Aunt Ruthie and giving the coin collection to little Bobby.
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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1037 on: February 17, 2017, 11:40:38 PM »
Can we please get this thread back on the original subject? Could you start a new thread for the political and tax discussions?

Thanks.

I'll own this. It looks like it was me that took the thread in a different direction. Quite honestly, it was a few posts before I realized this conversation was even in this thread. Sorry about that.

I will steer the conversation back to the original thread while still tying in to my runaway post.

I am the executor for my father. We differ politically, but we still have mutual respect for each others position. There is no way either of us will change each others mind. He has never really played by the rules, he believes they are for other people, not him. I am very much a play by the rules kind of person.

He would rather I remove worth from his estate than leave it in his estate to be taxed. I will not, and I keep telling him I will not. It is a crime, and his money is not worth going to jail for. I am not naive, I know it happens, a LOT. Even little things like "take the silverware so Aunt Ruth doesn't get it", or "remove the coin collection from the house when I die" kind of instructions happen all the time. I will not play that game. It does lead to some very interesting conversations, but fewer and fewer of them as time moves on. I guess not really true drama, but it sure could have been, with a potential prison story to boot.

What he's proposing is not illegal. He's within his rights to dispose of what he owns before dying.

Not before he dies. He wants me to remove items after his death, and not claim these items as belonging to the estate. I should have phrased that better.

Maybe not worth the cost of updating a will... but it really seems like it would be easier to just specify things like that.  My Mom's/Dad's wills had some line in it (paraphrasing and IANAL) "I reserve the right to attach a list of stuff and designate whom it should go to."  They never created the list... but it seems like they were thinking ahead on giving away the silver to someone other than Aunt Ruthie and giving the coin collection to little Bobby.

I am really explaining this poorly. He was requesting that I embezzle funds from his estate in order to keep the value of his estate below taxable amounts. If I give Bobby the $12,000,000 coin collection like he wants, but do not claim that as belonging to the estate, that is a crime the executor is committing, and I would be risking prison time just to give away stuff. The value of the collection in this example is simply for emphasis.

zolotiyeruki

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1038 on: February 18, 2017, 05:42:03 AM »
I am really explaining this poorly. He was requesting that I embezzle funds from his estate in order to keep the value of his estate below taxable amounts. If I give Bobby the $12,000,000 coin collection like he wants, but do not claim that as belonging to the estate, that is a crime the executor is committing, and I would be risking prison time just to give away stuff. The value of the collection in this example is simply for emphasis.
Aren't there ways around this, like a trust of some sort?  I'm not an estate lawyer, just curious.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1039 on: February 18, 2017, 07:55:18 PM »
I am really explaining this poorly. He was requesting that I embezzle funds from his estate in order to keep the value of his estate below taxable amounts. If I give Bobby the $12,000,000 coin collection like he wants, but do not claim that as belonging to the estate, that is a crime the executor is committing, and I would be risking prison time just to give away stuff. The value of the collection in this example is simply for emphasis.
Aren't there ways around this, like a trust of some sort?  I'm not an estate lawyer, just curious.

I imagine he could give it away before he dies - that would sidestep the issue neatly.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1040 on: February 19, 2017, 07:29:48 AM »
I am really explaining this poorly. He was requesting that I embezzle funds from his estate in order to keep the value of his estate below taxable amounts. If I give Bobby the $12,000,000 coin collection like he wants, but do not claim that as belonging to the estate, that is a crime the executor is committing, and I would be risking prison time just to give away stuff. The value of the collection in this example is simply for emphasis.
Aren't there ways around this, like a trust of some sort?  I'm not an estate lawyer, just curious.

I imagine he could give it away before he dies - that would sidestep the issue neatly.
If he were to give it away, it would still be subject to the $14k per year per person limit right?

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1041 on: February 19, 2017, 07:42:51 AM »
How would you respond to the following document found in your dad's desk:

A to-do list that says, "Remember to return the coin collection I gave to Bobby."

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1042 on: February 19, 2017, 10:47:15 AM »
I am really explaining this poorly. He was requesting that I embezzle funds from his estate in order to keep the value of his estate below taxable amounts. If I give Bobby the $12,000,000 coin collection like he wants, but do not claim that as belonging to the estate, that is a crime the executor is committing, and I would be risking prison time just to give away stuff. The value of the collection in this example is simply for emphasis.
Aren't there ways around this, like a trust of some sort?  I'm not an estate lawyer, just curious.

I imagine he could give it away before he dies - that would sidestep the issue neatly.
If he were to give it away, it would still be subject to the $14k per year per person limit right?

Who would friggin' know unless it was referenced on insurance documents and there was a big investigation? I'm not feeling the urge to tell the gov't every last detail about my things. Of course this urge isn't important b/c I don't have anything of value to worry about. ;)

I can only imagine that in the well-moneyed families that things are quietly moved from generation to generation all the time.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1043 on: February 19, 2017, 10:51:11 AM »
I am really explaining this poorly. He was requesting that I embezzle funds from his estate in order to keep the value of his estate below taxable amounts. If I give Bobby the $12,000,000 coin collection like he wants, but do not claim that as belonging to the estate, that is a crime the executor is committing, and I would be risking prison time just to give away stuff. The value of the collection in this example is simply for emphasis.
Aren't there ways around this, like a trust of some sort?  I'm not an estate lawyer, just curious.

I imagine he could give it away before he dies - that would sidestep the issue neatly.
If he were to give it away, it would still be subject to the $14k per year per person limit right?

Who would friggin' know unless it was referenced on insurance documents and there was a big investigation? I'm not feeling the urge to tell the gov't every last detail about my things. Of course this urge isn't important b/c I don't have anything of value to worry about. ;)

I can only imagine that in the well-moneyed families that things are quietly moved from generation to generation all the time.

Let's not promote tax fraud, please.
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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1044 on: February 19, 2017, 11:35:08 AM »
I am really explaining this poorly. He was requesting that I embezzle funds from his estate in order to keep the value of his estate below taxable amounts. If I give Bobby the $12,000,000 coin collection like he wants, but do not claim that as belonging to the estate, that is a crime the executor is committing, and I would be risking prison time just to give away stuff. The value of the collection in this example is simply for emphasis.
Aren't there ways around this, like a trust of some sort?  I'm not an estate lawyer, just curious.

I imagine he could give it away before he dies - that would sidestep the issue neatly.
If he were to give it away, it would still be subject to the $14k per year per person limit right?

Who would friggin' know unless it was referenced on insurance documents and there was a big investigation? I'm not feeling the urge to tell the gov't every last detail about my things. Of course this urge isn't important b/c I don't have anything of value to worry about. ;)

I can only imagine that in the well-moneyed families that things are quietly moved from generation to generation all the time.

And every time it's done, everyone involved is committing a crime.  So, yeah.

radram

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1045 on: February 19, 2017, 04:03:22 PM »
How would you respond to the following document found in your dad's desk:

A to-do list that says, "Remember to return the coin collection I gave to Bobby."

I would do whatever the estate attorney and accountant say to do with it. I would think in this particular example, they would advise to list it as an asset in the estate, and do with it whatever the will/ trust instructions say to do. No way a piece of paper in a drawer would super seed these documents.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1046 on: February 20, 2017, 07:14:21 AM »
The coin collection would be problematic if it were being insured as a rider to the deceased's home owner's policy. Now it's documented, even has an assessed value, and ought to be taxed (subject to the exemption, of course).

Or, you could put that collection within a trust.

radram

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1047 on: February 21, 2017, 06:20:48 AM »
The coin collection would be problematic if it were being insured as a rider to the deceased's home owner's policy. Now it's documented, even has an assessed value, and ought to be taxed (subject to the exemption, of course).

Or, you could put that collection within a trust.

Why would documentation be a problem? Everything owned by a person should be taxed upon death, subject to the exemption, under current rules. That is why my I posted my story to begin with.


The collection placed within a trust makes good sense. Defined beneficiary policy, and of course the trust would be subject to taxation above the exemption amount.

After AGAIN hijacking this thread inadvertently, I will now ask that this thread be put back on topic. I apologize again.

Stories anyone? PLEASE?

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1048 on: February 27, 2017, 05:09:04 AM »
Happy to oblige @Radram 🙂

I like this thread because inheritances bring the best and worst out of functional and dysfunctional families.

The good: my mum's side, her parents bought 3 different lots for 3 children so each child would equally share in property; close friends: they've bought land over 2 lots for their 2 kids.

Lesson: I'm seeing a pattern here.

The bad: my mum's relationship with my dad made her confide in me she's only leaving $5,000 to him which is a big FU for the hell he's put her through. The probs: he will contest it once he realises the paltry amount.

Lesson: Mum, please don't die before dad; be FI so don't have to deal with the consequential shit.

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1049 on: February 27, 2017, 08:50:34 AM »
While I like Sydney's plan of buying 1 lot for each child, it sure seems like a "sticky" way to save portions of the estate for your descendants. What if a child wants to move? What if they redistrict one of the lots so that the school quality causes the value to change drastically?