So... how do you feel about Trustafarians ?

[cbelt3]

Having just sat through an estate planning discussion... are you aware of how HUGE the estate tax actually is ?

55% Federal. Each state has their own. This is high... very high.. many countries have estate taxes, but the US's is very high comparatively. Many countries do not.

Any family that owns a business of significant value (> $5M) would have to mortgage or sell it outright in order to 'keep it in the family', unless they do significant estate tax planning.

Which has the effect of moving the tax income from governments to local tax lawyers and financial planners.

Blech.

I know. the "family Farm" argument.... I have a friend whose father recently died. When his mother dies, they will probably have to sell the family farm. They own 5,000 acres north of Columbus, Ohio. Value of that acreage approaches $40M. Acreage slowly accumulated over his grandfather and father's lifetimes.

I know, single point example, but it's not all Mega AgriBusiness out there.

[mattkime]

sorry, i don't have a terrible amount of sympathy for people that need to do financial planning for assets $5M+

[$tevie]

This is one of those situations that irritates the hell out of me. Why eliminate the inheritance tax altogether because of issues like land? Isn't it pretty simple to rewrite the laws to exclude assets such as that which would have to be sold to pay the tax? I'm tired of hearing about family farms as a reason why someone like Paris Hilton should not pay inheritance tax.

[hal]

I have no problem with the existence of trustafarians or the inheritance taxes.

[Acer]

.

[JoeH]

cbelt3 wrote:
Having just sat through an estate planning discussion... are you aware of how HUGE the estate tax actually is ?

55% Federal. Each state has their own. This is high... very high.. many countries have estate taxes, but the US's is very high comparatively. Many countries do not.

Any family that owns a business of significant value (> $5M) would have to mortgage or sell it outright in order to 'keep it in the family', unless they do significant estate tax planning.

Which has the effect of moving the tax income from governments to local tax lawyers and financial planners.

Blech.

I know. the "family Farm" argument.... I have a friend whose father recently died. When his mother dies, they will probably have to sell the family farm. They own 5,000 acres north of Columbus, Ohio. Value of that acreage approaches $40M. Acreage slowly accumulated over his grandfather and father's lifetimes.

I know, single point example, but it's not all Mega AgriBusiness out there.

55% starting in 2013 unless a new bill changes the rate. Currently 35% for persons dying this year. As you mention, the first $5 million is not taxed. There are other means to arrange transfer of assets to later generations that can keep them out of the taxable estate as well, that is what having a good estate plan is all about.

[mattkime]

hah, so it really is $5M.

pity the 1%! pity the 1%!

[Dennis S]

Can't a (relatively) few bucks to a lawyer get you out of the inheritance tax if done soon enough?

I have a friend whose dad wouldn't leave the kids any money because he earned his and they should earn theirs.

Who was it who said, "Leave them enough to do anything they want to, but not so much they won't want to do anything."?

[Bill in NC]

The article seems to say that the trust was funded by Romney's after-tax dollars.

And that Mitt is currently paying the taxes so the trust assets can accumulate.

After his death the kids still pay income tax from trust earnings, since it is a pass-through entity.

In their case trust income will probably be from investments, so they'd likely be taxed mostly at the long-term capital gains rate (15% this year, but rising to 24% in 2014)

If instead the trust held commercial buildings that were rented the kids would pay at ordinary income rates.

Plus any state taxes based on where they reside.

Ted King wrote:
like the Romney children - is that they could live off of their trust fund money without paying any federal taxes at all. That's just flat out wrong.

[the_poochies]

I though that this post was gonna be about hipsters.