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BTW, even though I said no more replies. I'd like to point out that an adopted infant and an orphaned infant raised by guardians can quite analogous. In both instances, the infant is too young at the time of death to experience the grief of an older child, and the place of the biological parent could be replaced by surrogates.
SFWoman & FAB,
We're getting into estate planning here and I'm not an expert in this area. So what I'm about to say might not be entirely accurate.
I think the main reason so few actually end up paying the "death tax" is a combination of good estate planning and favorable asset transfer laws.
In addition to the estate transfer exemption, there's also a lifetime gift tax exemption of $1mm for each giftor. Also, the estate tax exemption of $2mm is for each person, and since most wealthy estates are built up by a couple. Realistically at the end, the exemption is $6mm when all is accounted for.
Another thing is that each person is allowed to gift any person $12k (this number changes quite often) every year without that counting toward your lifetime limit and without gift taxes. So you and your husband can gift each of your children $24k a year tax free. Many wealthy families start doing this very early on in a child's life.
There are, of course, other ways to decrease taxes. But the basic items I just listed would suffice for most families.
Peter P
2007 Feb 8, 9:02am
And who will make that reasonable guess? I would hope not the same people who have been making reasonable guesses (which all turn out to be worng) as of late.
Someone must do the work. They need to do a good job. Even so, there will be mistakes. If the mistakes are reasonable, they should be seen as acceptable.
We cannot avoid that simply because of a few failures.
But you did give the impression (IMO) that the little girl was doomed to a life of misery and despair since she had lost her mother.
I didn't intend to give that impression, so sorry if I came across as such. Time heals a lot of sorrows. But not having the sorrow is even better.
But yes, let's move onto estate taxes and generation skipping transfers...
Peter P
2007 Feb 8, 9:03am
Please refrain from attacking any person. We do NOT want to expose patrick to any sort of liability.
PS - please don't hold this too much against me, but I am more of a Hobbesian Benthamnite than a Kantian...
Peter P,
I am quite unlikely to ever attack anyone, except annoymously while blogging, and then not too much.
SQT,
I never wished death on ANS and I wasn't trying to say good riddance in my original statement. Mostly, I was clumsily looking for a silver lining to the end of her trainwreck of a life.
Peter P
2007 Feb 8, 9:09am
I am quite unlikely to ever attack anyone, except annoymously while blogging, and then not too much.
Perhaps I am just paranoid. I only attack unnamed groups and archetypes. :)
Careful, you never know what vegetarians and open space advocates are capable of.
SFWoman said:
I am fiscally conservative, but am still going to call an estate tax an estate tax. It simply doesn’t tax death, so calling it a ‘death tax’ seems rather Rovian.
Wikipedia has a nice explanation:
The term was popularized in a famous memorandum written by Republican pollster Frank Luntz. He recommended that the party use the term "death tax" when referring to the estate tax, writing that the term "death tax" "kindled voter resentment in a way that 'inheritance tax' and 'estate tax' do not"
MtViewRenter said:
So you and your husband can gift each of your children $24k a year tax free.
Don't forget to do this with appreciated stock. Then the little ones can sell in 2008-10 and get the gains tax free. (see Anthony's post above).
Don’t forget to do this with appreciated stock. Then the little ones can sell in 2008-10 and get the gains tax free. (see Anthony’s post above).
Interesting. What is they already own the stock ?
MtViewRenter Says:
> We’re getting into estate planning here and I’m not an
> expert in this area. So what I’m about to say might
> not be entirely accurate.
> I think the main reason so few actually end up paying
> the “death tax†is a combination of good estate planning
> and favorable asset transfer laws.
Most Americans don’t pay the “death tax†because their net worth never comes even close to the exemption.
The majority of Americans that actually pay the tax have estates that are just above the exemption and can often get below the cap with some gifting or other simple tax strategies.
A very small number of Americans with huge estates (who pay tax attorneys more than the typical American family takes home every year) are able to avoid the tax using more complex tax strategies.
P.S. I like to call it the death tax since it really is a tax after death where the government takes half of every penny (over the exemption) that you were able to save with the government already taking over half of every penny that most people make in taxes and fess including, but not limited to: federal income taxes, state income taxes, social security taxes, gas taxes, phone taxes, road taxes, hotel taxes, sales taxes, liquor taxes, tobacco taxes, motor vehicle taxes, drivers license fee, fishing license fee, hunting license fee, brokers license fee, park fees, road fees, tire disposal fees, bridge tolls…
FAB,
Once you get over the hurdle of income tax and SSI/Medicare contributions, the take is significantly smaller. For the extremely wealthy, who don't pay much income taxes, quite a bit will be in long term capital gains, taxed at a much lower rate than 50%.
MtView,
The $12K gift allowance is something that you do not have to be wealthy to take advantage of. My husband and I started to do this for a fund when our first was born. My brother started it when his kids were first born as well. It just seems like a smart way to start building up money for a child.
SFWoman,
No, you don't have to be wealthy. Was just illustrating the point that it's another tool used for estate planning.
We've been putting some money away for our son since he was born, but it's not going to be anywhere close to the max of $24k a year. On the other hand, if one's finances is capable of doing the max, that person has to be pretty darn well off.
Peter P Says:
> Yes, you definitely want at least 1 gig of RAM.
> What kind of memory stick do you have?
I’ve got 4gig SD cards in my Treo and Digital camera (that I got for under $100 and you can now get on eBay for under $50) since the first version of Windows came out the rule has been buy as much RAM as you can afford that will fit in the computer for best performance (I think I paid $600 less than 12 years ago to upgrade a Toshiba laptop from 4 mb to 8 mb, that is mb not gb)…
> New thread : life and times of Anna Nicole Smith
Then SP Says:
> Please, in the name of allah, No.
With Anna Nichole dead and a new guy every day claiming to be the father of her child the media has totally forgot about the Gavin Newsom.
I never did understand the fascination with Ana Nichole, but then again I’ve always been attracted to girls like the one on the link below (I was at the party, but I’m not in any of the photos and I was just reminded how hot this brunette was when I bought up the link late last week and was clicking through it to show someone a photo of the NY Old Money WASP that a friend of ours from undergrad married a couple years ago):
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Inspired by Rainman18 (from Ben Jones' blog):
Expect real estate prices to decline in the coming year
Redlandsdailyfacts.com
posted 02/06/2007
Attention everyone:
"When put into perspective of a 10-year pattern, the downturn should have been expected based on the huge run up since 2002."
"...No reason to panic if you purchased your home for the quiet peaceful enjoyment of it" (vs. appreciation)
"Only the speculators and flippers ...are in any trouble at all."
"...and the last ones that purchased in 2005-2006..."
"The rest of us just need to continue to enjoy our homes, unless we were using it as an automatic teller machine."
Crickets: (Chirp chirp, Chirp chirp...)
#housing